The 125 per cent mortgage is dead says National Homebuyers
There are no more 125 per cent mortgage available in the UK, potentially leading to financial difficulties for many.
[UKPRwire, Mon Mar 03 2008] According to Moneyfacts, the final 125 per cent mortgage has been pulled from the market as the global credit crunch continues to have an effect.
Birmingham Midshires has followed the lead of other lenders and taken its 125 per cent mortgage deal off the market.
It follows the decision by other lenders to do the same last week but many people could now be at risk of financial difficulties.
Problems are likely to come about when people already on 125 per cent mortgages come to remortgage and cannot find a similar deal.
"It seems no one is prepared to stand out from the crowd in the current environment and accept the additional risk a 125 per cent mortgage poses," said Denise Harvey from Moneyfacts.
"While property prices were increasing, the risk was one that a number of lenders were prepared to take, but following on from the credit crunch and with property prices expected to remain stagnant or decline throughout 2008 these mortgages are no longer on the menu," she added.
Fast property sale expert Julian King comments, "People in financial difficulty should consider a mortgage rescue scheme like Sell and Rent Back.
"The solution allows the homeowner to sell their property for up to its real market value and remain living in their home as a tenant.
"We need to be cautious that not all Sell and Rent Back agreements will achieve the consumer full market value for their property, so the homeowner must ensure they use a reputable national company and gather as much information as possible before entering any agreement."
Mr King is a diretor of National Homebuyers, the UK's leading quick property sale company. He is also a founder of APBA [Approved Property Buyers Association] which is calling for regulation of the quick sale and Sell and Rent Back industries.