The Mail on Sunday and Sunday Telegraph both reported this weekend on recent figures released by the FSA revealing that, since the credit crunch began, almost 300,000 borrowers have switched their mortgage from Repayment to Interest only due to arrears or other financial problems. Lenders have tightened up on criteria for interest-only mortgages in recent months, with many now limiting borrowing to 75% loan-to-value, a change which could leave many unable to move or remortgage. Borrowers are advised to switch back to repayment as soon as possible in order to avoid problems later on. The subject of stricter criteria was also taken up by the Independent on Sunday in an article which looked at the increasing number of borrowers being turned down for a mortgage for relatively minor credit indiscretions. Experts suggested that, as a result, demand is growing for ‘near prime’ deals, and highlighted some of smaller lenders who are now providing solutions for people who require a more flexible approach to underwriting. The ‘Rent Generation’ is another hot topic for discussion at the moment, and the Mail on Sunday and Sunday Express reported on the subsequent boom in the Buy-to-Let market as potential First Time Buyers continue to struggle. The Guardian revealed however that for those still looking to get onto that elusive ladder, there are now 31 deals available to 95% LTV, a significant increase from just 6 in 2009. In other news, the Financial Times advised UK households to prepare strategies for managing their mortgage and savings account at a time of impending rate rises, while the Sunday Times discussed recent figures from Morgan Stanley which suggested that a double dip in house prices could trap 1.3 million homeowners in negative equity. Experts advised those who can to improve their position by overpaying while rates are low.
What the papers say- 21st and 22nd May 2011