Approved mortgages and house prices fall
The British Bankers Association reported that the number of approved mortgages fell to an eight month low last month. Almost simultaneously it was announced that houses prices had dropped for the first time in 10 months. This does not auger well for those still looking to obtain a mortgage to buy a property.
Banks are there to make a profit. In a falling market it is just a matter of mathematics as to whether a mortgage should be given or not. In the old days a bank or building society would lend up to 100% of the value of the property; in a rising market this was acceptable because the bank, in the event the buyer could not repay their mortgage, would make a profit on the deal when they repossessed it. However in a falling market the opposite happens and the bank stands to make a loss if the buyer could no longer repay their mortgage and the house was repossessed.
After a short period of upward movement, house prices now appear to be taking a dip and therefore the banks are nervous of this falling market. It seems that mortgages are still a limited commodity and may be so for some time to come.
Mortgages, and in particular good mortgage deals, are now becoming increasingly difficult to obtain. Only those with very high deposits can take advantage of the limited packages being offered so it may be some time yet before the financial markets are confident that the house prices have found their level.
Mortgage protection insurance protects against loss of earnings or sickness so it is always worth considering a good mortgage protection insurance as offered by Antinsurance.
