Is the Credit Crunch affecting Self Cert Mortgage lending?

Aug. 28, 2008 - PRLog -- The credit crunch has meant that we are all feeling the pinch.  Mortgages are especially under fire and lending criteria has been stepped up and many mortgages offering large amounts of credit have been taken off the market.

Self cert mortgages have been affected quite a bit by the credit crunch, so much so that there are fewer lenders on the market

The reason that there are fewer self cert mortgage lenders is not that there is a problem with self cert lending, but that those offering self cert mortgages have been exposed to the sub-prime market.  This has lead to a significant number of specialist lenders leaving the UK market or closing down that area altogether.
(http://www.clickngomortgages.co.uk/self-certified-mortgage-deals.asp)

Self cert mortgage criteria has also tightened across the market, so now only the most competitive rates are available to those with a deposit of 25% or more.  Even with a deposit of 25% you will still pay a mortgage rate of around 7.5%.

A typical 25 year repayment mortgages of around £200,000 your monthly repayments would be £1,477.

There is a very competitive rate which gives 5.99% but is only available to those who have a 50% deposit and comes with a 2.5% arrangement fee, so if the mortgage is £200,000 you will pay £5,000.

For those who do not have 25% or more to put down, which when looking at the average price of a UK home is around £40, 000 or more, there are still a few deals where 80-85% are available.  So as long as you have 15-20% to put down, you can get a larger self cert mortgage.

Without a sizable deposit you will not be able to get a self cert mortgage in the current market.  If you have bought in the last couple of years and do not have at least 15% equity in your current property, then many will not be able to switch to a new product, but will have to go with your lender’s standard variable rate.  The standard rate is often more expensive too.

The key to getting a good self cert mortgage deal now is to seek a mortgage advisor who has access to the whole of the market and is going to be able to find the right self cert mortgage deal for you.
(http://www.clickngomortgages.co.uk/self-certified-mortgag...)