Do I need a deposit to buy a house?

When a lender evaluates whether to grant you a mortgage to buy a house they look at your risk profile.

This involves looking at your

• incomings & outgoings
• other debts
• your ability to put down a deposit

The last one has become increasingly important since the start of the Credit Crunch. The reason is that lenders have less money to lend and are taking fewer risks and therefore are more choosy who to lend to.

So the answer to the question is yes.

A good independent financial or mortgage adviser can give you more information.
Remember to ask "are you whole of market or do you only have products from 1 provider?"

Posted by Sean Wilson, Independent Financial Adviser, Swindon, Wiltshire.

Bank of England "gives" banks £50 billion.

Yesterday the Bank of England announced it would give UK banks £50 billion in exchange for mortgage backed securities.

It was a move designed to put more money into the financial markets.

However it is somewhat of a u-turn for the Bank of England & its governor Mervyn King who denied it would not do anything liek this a few moths ago. The bank has basically bought assets that nobody else wanted on the financial markets.

It should be noted that the big 5 banks made profits of £30 billion in the last year despite making some rather large mistakes.

100% Mortgages Withdrawn

Abbey became the final large lender to withdraw 100% mortgages this week.

Prior to the credit crunch, borrowers were able to borrow up to 125% of the property value. Like other riskier types of borrowings such as sub-prime mortgages, product providers have removed these loans from their books.

it will casuse probelems for 2 types of lenders

1 First time buyers who don't have a deposit.
2 Buyers who took out 100% mortgages in the good times and now won't be able to get a new remortgage deal especially those on interst only mortgages. Their mortgages are likely to increase considerably.