A number of Lenders will be offering a range of contractor mortgage deals to struggling first-time buyer in the coming months – but they will make them harder to get.
The Bank of England announce that a number of high street lenders were planning to introduce more innovative deals on high loan-to-value contractor mortgages – those where borrowers, like most first-time buyers, have smaller deposits.
But lenders also stated that the credit scoring criteria for granting high loan-to-value mortgages would be tightened. One of the main reasons for this is due to the impact of tighter wholesale funding conditions and the impact of the Eurozone financial crisis.
Many lenders are concerned about the economic outlook, future availability of funds and the possibility of falling house prices.
Recent statistics showed that more and more first time buyers are finding themselves trapped in the rental sector. However, those contractors that kept an eye on their credit score and who have a 10% deposit can now look forward to getting on the property ladder.
