Credit Crisis

Northern Rock

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The UK has been greatly effected by the US credit crisis which started in 2007. Originally some US lenders where allowing many very high risk cases to complete. Such criteria included dangerously high loan to value mortgages, with self certification and adverse credit history. Since some commentators have stated this was an inevitable disaster just waiting to happen.

Many lenders were allowing these potentially problematic cases through because property was increasing in value rapidly and the mortgage book was then being sold on for sercuitization in banks hedge funds. Since many banks have lost millions in profits which has made some stock markets fall.

Many UK adverse lenders are US based and have beginning in 2008 in some cases completely removed all of the high risk lending product. Alternatively if products have not been withdrawn then many have had criteria dampened down to reduce their risk. Examples of this include reducing end of term age, pulling high loan to value especially 125% and 100%, no employed self certificate, higher deposits required, less heavy adverse credit, increased completion and application fees.
Also the actual product rates may be higher and many cases are being rejected due to nervous underwriting. The effect of lenders pulling product means their profits margins may be greatly reduced so they are looking for ways to increase profits for example higher interest rates.

The following APR relates to the above products only. THE OVERALL COST FOR COMPARISON IS :- 8.9% APR The actual rate available will depend upon your circumstances ask for a personalised illustration.