Before the recent credit crunch there were more than 44,000 different products and lending deals listed on the mortgage advisors' sourcing system Trigold.
This has now dropped to below 6,000, though this is obviously a floating flexible figure, it is an indication of the once vibrant and dynamic mortgage market that existed before.
This is very bad news for the UK home owner or first time buyer. The deals left are mainly very conservative high street products which only cater for some of the population, so how about of the rest? The existing deals are also more expensive than before. Having potentially higher rates, fees and less favourable terms. In summary inferior products than before.
The vast spectrum of products before and higher number of lenders allowed competition to potentially create many superior deals than there are now. Unfortunately is potentially looks as though this situation will worsen and last for some time.
The UK is in a situation where many US specialist lenders have now withdrawn their products leaving many home-owners unable to re mortgage to other lenders' products. Also home values have dropped about 10% in one year and still falling. And lenders have pulled deals with high loan to values. Many property-owners had before been able to re-mortgage consolidate credit cards and expensive loans or capital raise.
This means many mortgagees are left at the mercy of their existing lenders who in some cases are only offering a very expensive standard variable rate and often not allowing to capital raise. Millions of borrows are coming out of low fixed rates from a few years before to now only high rates with high fees.
It was announced recently that America’s two largest mortgage lenders Freddie Mac and Fanny Mae who hold about half of all the US mortgages are to be nationalised. The government taking over these lenders would mean more stability to the housing market not just in the US but this will have a positive effect to the UK lenders and property market as well. Just before the take over the stock markets were tumbling badly down. On news of the government action the trading markets give a positive response.
Perhaps this could be a lesson for the British government to move away from being reactive and to instead become more proactive and doing something positive to boost the UK falling house market.
The latest casualty from the crunch is Lehman Brothers a large American investment bank similar to Bear Sterns who were over taken recently by JP Morgan. Lehmans have taken on a lot of bad credit sub-prime mortgages and has lost billions in the last two quarters. So stock prices have fallen sharply again leaving the real fear that share prices could became worthless and the bank go bust. Which is infact what happened as Bank of America and Barclays were not interested in a take over.
The US Federal reserve cannot afford to allow a major bank to go under but there comes a stage where bail outs will not be possible. The government feels that banking is the under pinning to a capitalist society and there must be confident in this sector as it will effect the whole economy including the UK mortgage market.
Having said that there will be no rescue package from the Fed as there was for Freddie Mac and Fanny Mae. The money available is not endless. AIG insurers and Merrill Lynch seem to be negotiating for rescue take over's or massive bridging finance.
Your Guitar Progression
When it comes to learning such new skills patience will be your guide. It is important to progress slowly one step at a time though we all want it now without the effort so it is very easy to get frustrated which will take away your concentration.
Musicians' Tips
When practicing try and be disciplined about your time, ideally one hour a day minimum.
Guitar School Tips
There is an old saying if you don't use it you will loose it. That is very true for improving your electric guitar playing. So get in to a routine that will insure regular guitar practice.
