'Recession Plague' is still out there looking for victims
Founder Martin Greensted explains: "The recession plague has killed off self-certified mortgages. It's now trying hard to cripple first time buyer mortgages, and it's got fast-track mortgages in its sights. Moreover, it has spotted another set of potential victims - the 'interest only' mortgages. And what do all these 'victims' have in common? They are very useful indeed for people at certain stages in their lives who want to live in their own homes, and who need the mortgage market to help them.” A key question to ask is whatever has happened to trust? There is no doubt the financial market has had an enormous shock. But as Greensted states, "...why take it out on those poor couples who need its help, the very people for whom it exists?” The Recession Plague is in essence Recession Mistrust.The standard mortgage is called a repayment mortgage, and every month the borrower pays interest on the money borrowed and pays back a little bit of the capital. Gradually reducing the money owed will ultimately lead to completely paying off the mortgage. But incomes do not always follow the same pattern as housing needs and expenditure. In the early days, pay is low – often building up with age and experience. Many people then get together in couples and may double their income but maintain the same mortgage. Then maybe a family arrives – and often they halve the income and up go the expenses, growing as the children get older. The children then leave home. Now we might have income at the highest level achievable and much lower costs. The final stage is retirement and many enter this stage asset rich but income poor. 'Interest only' mortgages are a fantastic way of giving some flexibility to couples to manage their finances throughout the many varied stages of life. They can plan their capital repayments to suit their budget. With the help of an adviser, they can decide what to do; it is all part of a life plan to get them to where they want to be. Now Recession Plague has them in its sights too. Such mortgages are now much more difficult to secure, in some cases impossible. Why? Do people really need protecting from themselves? It's their life, and throughout life they make hundreds of decisions - many of them far more difficult than this. If they want 'interest only' mortgages then they should be able to have them, in all 'thought out' circumstances. Let's bring back trust and see off this terrible malaise. For a free consultation or mortgage check click here or call 01892 834371
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