The 125% Remortgage and Mortgage is Back [mortgageprotectiontips.blogspot.com]
The economic crisis which has affected the majority of U.K. residents has been the most serious in living memory. It has left many people unemployed and this has lead to many families being rendered homeless as a result of losing their jobs and making it impossible to meet their mortgage payment.
To help improve this situation the Government introduced the lowest ever Bank Of England base rate of only 0.05%. Lending and borrowing is a basic requirement of a healthy economy, and the low base lending rate, it was hoped, would encourage borrowing and lending, and lead to banks and building societies granting mortgages, remortgages and loans at a low rate of interest.
It would make a mortgage and remortgage more affordable and kick start the economy. It has not worked out like this. The writer of this article has been involved in the secured loan and remortgage industry for twenty five years and in all this time has rarely seen the secured loan rates as high as they are now.
The remortgage and mortgage rates did appear low this year so far. In particular, if you were on a tracker mortgage or remortgage which of course tracks The Bank Of England base rate, your payment would be very favourable. With the Bank Of England announcing last week that the low base rate was still being held, those with a tracker are in a good position.However, the Government must be very disappointed to observe that RBS which is 70% taxpayer owned withdrew a number of their better mortgage and remortgage products at the end of last week. The Woolwch has raised it's two and five year fixed remortgage and mortgage rates by a substantial 0.06%. One building society which is trying to help existing customers is The Nationwide.
It may be helping it's customers to some extent, but it is reintroducing one of the lending practices which precipitated the current economic crisis. This reintroduced product is the return of the 125% mortgage.It is not such an extensive product as the 125% plan for remortgages, mortgages, and secured loans that existed until recently. What the Nationwide has introduced is available to existing customers only. If a homeowner is living in a property which now has negative equity, providing they have a 5% deposit, The Nationwide will grant a mortgage of up to 30% of the new property value.This will be of great benefit to homeowners who want to move not only as a caprice, but have to move out of necessity, through having to move because of work commitments, etc. It may be of benefit to such homeowners, but it is reintroducing one of the reasons why The Northern Rock collapsed, and is now 100% state owned. Hopefully other bad lending practices which caused a great deal of the credit crunch will not be similarly reintroduced.
Find More The 125% Remortgage and Mortgage is Back ArticlesQuestion by Dan: Are there any 125% mortgage programs available? I am well aware of the downside to the 125% mortgage programs. However, I do not intend to move and having bought my house just before the fall of the market, I find that I currently owe at least 100%, and possibly more than what my home is valued. I would like to refinance at a lower rate but can't do that without putting down a great deal of money (which I don't have)....so....are there any lenders offering the once plentiful 125% mortgages? Best answer for Are there any 125% mortgage programs available?:
Answer by My Take on It
That train left the station over 2 years ago.
Answer by FLRealtorCB
Unfortunately not. You may be able to find a 105% loan under the new Obama plan,however 125% loans do not exist anymore and were a large reason why we are in the state we are now. You will not be able to refinance your loan if you owe more than its worth.
Answer by doodoo27
There isn't any 125% mortage programs.but there are programs that you can leverage your money.sounds like you should checkout the mortage fast track program.http://pureassetinvestments.com/
Answer by OldJimmy
Afraid you are stuck, my friend. However, if you have a good payment record with your mortgage lender, I would contact them and ask if they are offering rate modification programs for their good customers. If they do, they will lower your rate (not quite as low as current market, but close and probably better than what you have), leave the maturity date where it is, and only charge a 300-500 fee for the whole thing. A lot cheaper than refinancing, no pesky appraisal to deal with, no cash to fix the LTV, etc.
Answer by potato_head30
Hi Dan, I agree with other people that these mortgages will be hard to come by nowadays. Along with this, a mortgage company offering "high risk" loans (which this would fall under since there is no equity to cushion their fall, should you default) are bound to be charging a whopping interest rate to account for this. It makes the idea of refinancing your current loan seem a waste of time. Lower interest rates are usually only offered to "safe" buyers.
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