This was mainly because the lending criteria of banks and other financial intuitions were very different from what they are now. Many people who may not necessary have brought a home were encouraged to do so with offers of cheap interest rates and one hundred percent mortgages.
If you didn?t have a deposit for your home that was not a problem, nor was it a problem if you wanted a little extra cash for doing up your house once you had brought it. Lenders were happy to lend money to a larger range of people in all different kinds of financial situations, until it all turned sour. Some people who had been enticed to take out mortgages by mortgage lead generation companies, began to find it more difficult to meet the monthly repayments when inter
est rates started to rise. Many people ended up missing payments and ultimately losing their home which meant that mortgages lenders were missing their money. As interest rates rose it also became more expensive for mortgage lenders to borrow the money themselves from the financial markets and so they began to tighten the criteria of who they were prepared to lend money to. This criterion has now narrowed significantly with hardly any lenders now offering 100% or 110% mortgages deals and fewer lenders offering 90% deals than there were previously.
For the banks and financial institutions finding the right people to lend money to is essential. Whilst they do not want to stop lending altogether they are no longer prepared to lend to people they deem high risk. Mortgage lead generation companies offer a service to mortgage providers in that they source people who meet the criteria and had their details over to the mortgage providers to determine if they are happy to offer them the money. Lead generation companies often supplied details to both the mortgage lenders and to mortgage brokers. Now this partnership is a difficult one to manage. The UK housing market is in a state of turmoil and there are less people looking for a mortgage than previously. This reduction in clients for brokers means they may have to rely more on lead generation in order to make an income. In addition many of the banks and financial institutions are moving away from brokers and prefer to deal with applications for mortgages directly themselves. This means that lead generation companies need to work harder to find the people who meet the stringent criteria of the banks, as they do not have the mix and match search facilitate that the brokers do. It seems that the need for lead generation companies is still there, even in this difficult market. However in this current climate finding people who want to buy and meet the bank's criteria is a difficult task.
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