1 Comment January 14th, 2010

What low home loans have to do with the housing market?

TuTu asked:


Read news (http://www.busrep.co.za/index.php?fSectionId=565&fArticleId=5049467) yesterday that UK home loans hit eight-year low. And stated that it came as a further evidence of sluggish lending activity in the UK as banks tighten criteria and consumers feel the recession.

So can I conclude that the bank’s action is somehow rendering consumers to be pessimistic? Also, does it mean that it is hampering the housing market?

And there’s something I don’t understand why can’t we treat the low loans as good signs that people are now not that rely on banks?

I’m not so good in analysing the market and hope someone can help.

Thank you.

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One Response to “What low home loans have to do with the housing market?”

  1. Caroline Says:
    January 16th, 2010 at 8:51 pm

    The best part about a bad credit home loan is that it provides a good opportunity to people who have a poor credit score and makes it possible for them to secure loans and own a house. By making regular payments on time, your credit score can improve which can even help you to choose refinancing schemes with lower monthly repayments. However, on the downside if you have a bad credit rating, you may be required to pay a higher rate of interest as compared to people who have excellent credit ratings.

    If you have poor credit, the amount of money which is to be repaid every month also increases which can put increasing burden on you as a borrower. As a result, a home buyer with poor credit may have to opt for a cheaper and affordable home to reduce the debt burden and sacrifice his or her personal desire of owning a lavish and expensive home.