18.06.08 by Andrew Montlake

History, Tradition and Mortgages

History and tradition play a massive part in the British way of life. We are all rightly proud of our heritage. When we look back in time events become clearer and history can be used to guide our futures. What history will tell us about the current financial crises we are in remains to be seen, but we can hazard a guess.

The first is that this represents a fundamental change in the financial industry. Easy borrowing and cheap credit has disappeared almost overnight, and we have stepped back in time to when lenders only want quality applicants. Those with good credit scores, a decent deposit or good equity levels, and who are not looking to stretch their income, should still find they have a choice of products available to them. OK, so it may not be as cheap as it was a few years ago, but historically speaking we are still at low levels.

Several years ago many would have sold themselves, their grandmothers and even their souls to grab a rate at 6% rather than a variable rate at 12% !

In recent weeks, the press has also been awash with reports about the demise of large loan lending, claiming that lenders have significantly cut back the amounts they are prepared to offer borrowers. The message coming out of the media is that anyone after a sizeable loan can, well, sing for it. As ever, however, the truth is very different and big loans are still available.

It is all about knowing where to look and who to deal with. As the high street lenders have retreated to the sanctuary of loans up to £500,000, those bastions of British heritage the private banks have emerged strong from out of the shadows. They were always there of course, quietly doing their own thing and refusing to get dragged in to the easy money culture, and they are reaping the rewards now.

The same is true with mortgage brokers. Over the past few years many have sprung up promising this, that and more than a smattering of the other. As times get tougher it is the brand names and the more established brokerages who will survive. They have seen the market change before, and use their years of experience and contacts to continually negotiate with lenders to obtain the best terms for their clients.

It is the time to reflect on our heritage and traditions, to learn from the past, and to deal with those institutions with history on their side.

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