Post-Christmas queue for credit seekers forecasted
Posted 2007-11-30
Weathering the current credit storm for individuals seeking personal loans or mortgages may hinge on their swiftness to act before Christmas.
With the fallout of the credit crunch in full force, many lenders have lost their incentive to hand out credit too freely, making mortgages and personal loans trickier to secure.
After GE Money,
Personal finance analyst at Moneyfacts.co.uk, Esther James said, “Such a large reduction in just the last month is worrying. With no signs of rate rises slowing, it’s a rather unsettled market. The credit crunch is showing its strength in the personal loan market.”
She further advised that anyone desiring a personal loan should “act sooner rather than later.”
“With less choice, a more cautious lending strategy and the impending decision on payment protection insurance sure to shake up the market, the 2008 loan market could look very different.”
Mortgage market lenders are not only tightening their reins but are also making people wait longer to secure their deals.
“The credit crunch means that even the balance sheet lenders who have funds available are in no hurry to price themselves into popularity because it could bury them in business and ruin their service levels,” stated Katie Tucker, Technical Manager at mortgage broker John Charcol.
Currently, The Woolwich not only has a one-hour queue for update calls, but also a one week waiting period to even review new applications – meaning sliding into what space remains under the pre-Christmas umbrella, may be imperative.
Ms. Tucker further offered, “It is vital borrowers allow extra time for applications, the temptation to delay applying until after Christmas may cost remortgage customers an unexpected month on a nasty high rate if they revert to their lender’s [standard variable rates] SVRs while they are waiting.”
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