Eventhough increasing the interest mortgages rates, people still like it

April 22, 08 by admin

Although much publicity has been given to the effect that higher interest rates on mortgages will have for homeowners this is not the only area of rising demand that these consumers will face, it has been claimed. Many people are starting to ask why they are unable to obtain a mortgage; it is not just those who have an adverse credit history who are being affected. So why are mortgage lenders so unwilling will to let people borrow their money?

These lenders are finding it extremely hard to borrow money themselves or at least at a worthwhile interest rate. Despite the governments of the UK and USA slashing interest rates the market is showing no signs of picking up. It is as if there is some kind of stalemate taking place. Many of the mortgages lenders have been reluctant to pass on these interest rate reductions with the majority of them even increasing the interest rates on their fixed rate mortgages.

Governments around the world are trying to find a solution to this stalemate, they need to find a way to get the whole lending business moving again. Financial experts are saying that there is a house price crisis, with prices likely to fall in a major way over the next couple of years. I personally believe that the fundamentals are fine but that the credit crunch and the affect that it is having is making it virtually impossible to buy and sell houses. There is likely to be some more bad news to come but within a couple of years the housing market will start to boom as people start to be able to borrow money again.