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Secured Loans And Remortgages Are Against Methods Of Debt Consolidation
4:02 PM
For the three years of the recession the secured loans industry was in a state of deep depressioin as were the mortgage and remortgage sectors.
The
cause of the recession was, as is a well known fact, caused to a great
extent by the reckless lending practices of banks and buildindg
societies who liberally advanced loans both to private individuals and
companies who simply could not afford to repay the debt.
As a result,lending criteria was tightened up to such an extent that many who were eligible for secured loans and remortgages no longer were able to obtain the finance that they needed especially for debt consolidation.
The
tighter criteria affected the self employed in particular as self
declarations were no longer accetped when applying for a secured loan
or a remortgage,
and as a result many self employed were deprived of obtaining the
remortgage or the secured loan that they so badly required for debt
consolidation.
Before the credit crunch,one of the most popular
uses for secured loans was for debt consolidation, and remortgages were
also often used for the purpose of debt consolidation.
The
tightening of lending criteria ruled out many self employed remortgage
and secured loan prospective borrowers who could not fully prove their
income as lenders asked for two years full accounts.
It is
unlikely that self cerrt. income will ever return to the remortgage and
mortgage sectors as they are out lawed by the FSA but there is a
renewed glimmer of hope in this aspect in the secured loans sector with
the return to the market of a secured loan lender.
Link Loans
who stopped trading in secured homeowner loans during the recession
with the refusal of their backers, Barclays Bank. to renew their
funding are now back offering secured loans.
They grant secured loans at 75% LTV to employed applicants and at 70% for those who are self employed.
The
good news for the self employed is that it is acceptable to be self
employed for only six months, and as such the income is to some extend
self certified. However, the income must be backed up with a business
invoice or similar in addition to three months bank statements being
required.
As such these secured loans are not pure self
certifications, although it is all a sign that homeowner loans are
witnessing some sign of improvement. In addition to this self
certification plan Link are accepting some level of bad credit.
Other news of an improvement in the industry is the announcement that G.E. are reducing their interest rates.
As
such remortgages and secured loans are looking all set to once again
become the best methods of debt consolidation just as they.once were.
