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Scheme to Guarantee Mortgages


7/27/2009 1:06:38 PM
The treasury is considering plans to underwrite risky mortgages. This would really help first time home buyers with only small deposits to buy a home.Since the credit crunch began to take hold lenders such as banks and other financial institutions have adopted a much tougher criteria for lending. They are asking borrowers to provide a 25 to 30 percent deposit before they will lend them any money. Because of the high deposit needed it is no surprise that the number of first time buy loans dropped from 100,000 a quarter last year to 30,000 a quarter this year. The government is now looking into a scheme used in Canada.They are hoping that this will encourage banks and other lenders to step up their lending.The programme used in Canada require all mortgages secured with a deposit of 20 percent or less to be insured by the government or private insurers. This gives banks the confidence to lend. As a result of this scheme being used in Canada, their housing market has withstood the pressures of the global financial crisis better than most.


Written by Skye Maidstone of Loan Machine Secured Loans
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. LOANS SECURED ON YOUR HOME.