Even the English are not impervious to housing market woes. There is good news, however - the outlook for the mortgage market is looking sunnier in the United Kingdom. Mortgage products are becoming more available at increasingly lower rates. Home sales are increasing as a result.
Moneyfacts, a UK-based financial information provider, recently came out with a new report showing that the real estate market in England is beginning to thaw. Homebuyers are now able to more readily find affordable mortgages and mortgage products.
In England, there are very few mortgages that offer 0 -5 percent deposits. Those without deposit funds are hard pressed to be able to afford a house let alone a mortgage with interest. However, a drop in housing prices in February and the new mortgage deals coming out make for a good time to buy for those in the market.
Currently, there are 1,798 mortgage deals that require a 0-40 percent deposit or down payment. Banks are steadily loosening credit criteria and mortgage rate averages continue to fall. For most cases, however, a 25 percent deposit is common.
Although state-funded banks are not as competitive as analysts thought they would be, many banks are still cutting mortgage rates. For instance, RBS, Lloyds, Northern Rock and Cheltenham & Gloucester have all reduced mortgage rates in recent weeks by as much as 0.5 percent.
The U.S. Housing Market Still Needs Help
In the United States, the real estate sector is still reeling from the credit crisis that made the earth stand still. Many major metropolitan areas are besieged by foreclosures and homeowners who are delinquent on mortgage payments.
The Federal Reserve has attempted to fix the problem by keeping mortgage rates artificially low, which worked in 2009, but many homeowners remain ineligible to refinance or modify the loans. This creates a difficult situation for homeowners who simply have run out of options.
The government has dumped a $100 billion into home saving programs including refinancing and loan modification programs. What’s more government is even tempting homeowners to move out for cash. The current fear is that with the number of foreclosures across the nation increasing, economic recovery continues to be a long way off.
Mortgage rates may soon rise, however come the end of March when the Fed stop buying mortgage-backed securities. The program to buy $1.25 trillion worth of securities helped keep rates low and contain the credit crisis.
The result of an increase in mortgage rates and it impact on mortgages and the real estate market at large could mean further recession or a quicker recovery. However, all odds point toward a long recovery to come.
Written by Lani Shadduck
HULIQ.com
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
