Mortgages - only risk-free need apply

[BoyRacer]

Mortgages - only risk-free need apply - Simon Carswell -> irishtimes.com/newspaper/pro … 44621.html

There are effectively only three lenders left providing mortgages – and most are lending only to highly credit-worthy first-time buyers and trader-uppers

IN JUST four years the mortgage market has been turned on its head. Gone are the speculative purchasers and buy-to-let borrowers. Now the country’s banks and building societies are largely only lending to borrowers who are buying their first home or trading up or down in the market.

In early 2008 first-time buyers and mover-purchasers accounted for 40 per cent of the market; figures published by the Irish Banking Federation (IBF) last week showed that three out of every four mortgages (in value terms) provided in the second quarter of this year were to borrowers purchasing a home.

In the same period buy-to-let mortgages fell from almost 20 per cent of the market to just 3.8 per cent.

The reason for this is a sharp fall in both demand and the number of people seeking to buy property in a depressed market and a desire among the remaining lenders to lend only to purchasers who have a large deposit, stable income and intend to live in the property for several years.

**The market is also substantially smaller. In 2006 – the year marking the peak of the mortgage and property markets – just shy of €40 billion in mortgages were drawn down. Given the current level of activity, the market will be doing well to pass the €6 billion mark this year.
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