Edgware, United Kingdom (PressExposure) July 07, 2011 -- Tough mortgage rules mean more pressure on first time applicants.
According to leading thinktank, Institute for Public Policy Research (IPPR), banks should continue to apply strict lending rules, to prevent house prices rising too fast in the future. They said the four instances of excessive house price inflation (known as bubbles) in the last 40 years, had caused widespread damage to the economy. The IPPR says banks should not lend more than 90% of a property's value, while people should not be able to borrow more than 3.5 times their income. In the thinktank's opinion, easier mortgage lending rules created the most recent boom in house prices, which saw property values triple between 1996 and 2006.
The group warned that although the country has a long-term under-supply of housing, cheap credit is making the property market volatile, and that people's love of house price inflation was bad for the economy. It urged the Government and the Financial Services Authority to recommend these caps on mortgage lending based on the value of a property and the borrower's salary, as part of its Mortgage Market Review. It also wants the deposits that lenders require for buy-to-let properties to be increased, so that the rental income covers mortgage repayments. The IPPR says economic policy should aim for moderate increases in house prices, rather than the runaway house price inflation which is damaging in the long run.
Were the IPPR's views to come into practice, it would of course make it very difficult for anyone on the average salary or below, and particularly first-time buyers, to get an appropriate mortgage, though what they could buy with the mortgage would depend very much on what part of the country they lived. In addition, lenders do not have a wide range of mortgages available at the moment anyway.
So if someone is looking for a mortgage for the first time, or looking to re-mortgage, it pays to make sure there are no hitches in the process. They can take steps towards a more positive outcome for their application by reviewing their credit report with Credit Rating Matters. Here they can see what lenders can see, check for any errors and also keep an eye on identity theft - that is, people using someone's personal details to open bogus accounts or make unauthorised transactions.
By checking your credit report before you apply for a mortgage, with http://www.creditratingmatters.co.uk - you can also learn what different elements are held in a credit report. Credit Rating Matters is a membership programme which provides access to your credit report and credit score. These credit tools are provided by the credit reference agency Callcredit limited, and may provide an insight into anyone's financial positioning in the eyes of lenders.
Each application made for credit leaves what's known as a 'footprint' on a person's credit report. Having too many of these can show a history of refusal and this will not look good to your prospective lender. So by first assessing your finances and reviewing your credit report at Credit Rating Matters, to ensure there are no anomalies, you could put yourself in a better position when making a mortgage application.
Membership with Credit Rating Matters provides unlimited access to ones credit report and score, so anyone can monitor their financial position. Once details are successfully verified, people can view their credit report from Callcredit as often as they like. The report will update periodically and reflect changes in financial activity. At http://www.creditratingmatters.co.uk you will be able to try the membership first, and cancel if, ultimately, you feel the service is not right for you.
To learn more about credit reporting and how to keep your identity safe please visit http://www.creditratingmatters.co.uk for full product details, credit information and identity theft hints.
Credit Rating Matters is an online membership programme, which gives you access to your credit information held by one of the UK's leading credit reference agency. Credit Rating Matters is a membership programme and monthly membership fees are payable after any free promotional free period has come to an end.