95% LTV Mortgages On The Way Back
More positive news. I regularly search for news on the property market and BBC seems to give a good supply of well written articles. I can sort of see why we pay our licence fee!
Anyway I read this article today:
http://news.bbc.co.uk/1/hi/business/8211204.stm
Seems like lending is up. However it could go ballistic if prices bottom out. If you read 2/3rds of the way down the article it starts to talk about 90% residential mortgages could come back if the large lenders think prices are bottoming out.
This means their risk is lowered if prices are rising as in the event of default they hope the LTV will be lower than 90% immediately after repossession.
So this is a waiting game.
When that 90% product comes out from either Lloyds, RBS, Northern Rock, Halifax or Nationwide they will get bombarded by hungry borrowers who all want to own their own home (kind of understandable right?). Then the rest of the banks will follow within months probably weeks.
Also 5% gifted deposits are acceptable to most lenders and then suddenly the first time buyer needs only 5%. This will mean effective 95% residential mortgages. Can you imagine what will happen to prices?
So now I think it is simple to predict the boom. All you need to do is check all the major lender’s websites for their rates till you see a 90% residential that comes out that is below 5%. Then BINGO. The boom will start and will gather pace very quickly.
Foget the normal lulls of the property market leading up to Christmas. If a lender brings out a 90% in Autumn then estate agents will be busy without a doubt.
So if you want to get in before the boom and make some very quick returns I suggest you take a look in to the UK property market as a whole and see if you can find some quick wins!
Here is to property investing AND trading!
Article Courtesy of Ajay Ahuja & The BBC
