Although many had hoped that falling home values would help new buyers, they are quickly finding that it is nearly impossible to get a fixed rate mortgage. With all the bad news about variable mortgages, fixed rate mortgages have become newly popular, but they are now quite difficult to get. Those that can get an approval are finding that the closing costs for their fixed rate mortgage are prohibitive, especially when they go higher than 1000 pounds, which is quite common right now. Interest rates on fixed rate mortgages are also much higher than they were a year ago and may go even higher.Sean Hanning at Standard and Poor’s stated, “The difference today is that borrowers are not being helped by rising house prices as they have been in recent years. In previous years, homebuyers in difficulty could find another lender to refinance the mortgage. It could mean that now more homes wind up in repossession.” ”Our forecast for 2008, although it remains unchanged from what we said last October, is far more arrears and possessions than we saw last year,” said CML spokesperson Bernard Clarke. “Given market circumstances that is not surprising, but we don’t see it as being as bad as some other commentators are predicting.”
Related reading: Home Mortgage
Comment on this article