Government Allow you to Borrow up to 95% of Your Homes Value
To be fair there are probably a number of different factors that are stopping you from being able to sell your home. Of course it’s obvious to say that the general state of the economic climate isn’t doing anyone any favours but why? and what do we need to improve?
A lack of Buyers causes a Supply and Demand Problem
Well, the main reason why nothing is moving is the fact that the lenders are simply not lending. back in the day almost anyone could attain finance to purchase a property, be it if you were self employed, had a criminal record or just even didn’t have a deposit. Nowadays times are very much different not only are the banks super selective as to who can borrow, they also preferring to sit on their current debts rather than lend. This is of course causing a severe lack of buyers and with many more sellers being forced to sell their home this is creating a real supply and demand problem. According to recent figures mortgage approvals are down this April 2012 by 20% when compared to the same time last year so it doesn’t appear that things are heading in the right direction. Basically until buyers can attain finance this lack of demand coupled with an over supply is going to keep prices suppressed.
Homes which are Poorly Built
Other than the general economy you may wish to consider that your home itself could be to blame. Certain homes which are wooden or concrete built are likely to not achieve any lending and you will need some kind of cash buyer to sell these houses in the current market. Also, if your property is in a high rise block any buyer will also probably struggle to attain finance. The banks are currently being very choosy and sometimes they may reject a loan against your home purely due to it’s location. This is because the banks are being so cautious about holding too much debt in one location that they quite often hit their quota for that area and may reject a buyers application purely for that reason.
Government Announce 95% Mortgages
When looking towards the future it has recently become apparent the the government themselves may prevent you from selling your home. This may be for a few different reasons. Firstly, they are currently offering some very good first time buyer deals on new build properties, whereby a buyer can purchase with just a 5% deposit which is reminiscent of the good old days when you could borrow 95% of the market value of your home. In doing so this could prevent existing homes from being sold to the very important first time buyer market. Also, the word on the street is that interest only mortgages may be banned. As crazy as it seems this is because they have recently realised that people who purchased years ago with this type a product are now coming to the end of their term without paying off the original loan and are now being forced to sell their property fast. For people in this position this could be very bad news as if you do reach the end of your term then penalty fees and super high interest rates may apply and this could force you to default and face repossession.
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