Changes in the Home Loan Market since 2006 – taux hypothecaire
By Mark Steed
It is clear to anyone who has a home loan or who even just reads about the financial news, that drastic shifts have occurred in the mortgage market- taux hypothecaire.
As an almost “perfect storm” of mortgage related factors converged on the economy, harried homeowners have felt the brunt of lower housing values, rising rates and a severe credit crunch - taux hypothecaire.
Taux hypothecaire - As with any market, continually escalating prices create a bubble and prices have to eventually top out and start to come down, so the booming days of real estate values were bound to come to an end. But many homeowners who used these soaring values to borrow on easy credit terms, even with poor credit ratings, were bound to be caught in a trap as the prices came down.
These so-called “sub-prime” mortgages could not withstand tumbling prices and rising interest rates – taux hypothecaire. Many people with poor credit ratings could barely afford their mortgages (taux hypothecaire) to begin with, and then when the values of their homes started to fall as the rate on their mortgages adjusted upwards, the only option open would be to try to refinance. However, credit lending was tightening as more and more of these homeowners faced the same dilemma – taux hypothecaire. A real domino effect took over.
Foreclosures on these sub-prime loans were inevitable, further pushing prices down by increasing the supply of homes on the real estate market – taux hypothecaire. The fact that only the worst of the loans were the guilty parties, responsible for 60% of the loans even though they only made up 20% of the loan market, did not encourage banks to loosen. Indeed, two states alone, Florida and California, were responsible(taux hypothecaire) for 36% of the foreclosures nationwide.
Nevertheless, lenders have pulled in the reins on lending across the board, and potential borrowers are not able to get easy terms or borrow with poor credit ratings any longer – taux hypothecaire.
What is the outcome of this? It’s a return (taux hypothecaire) to “normal”. Some people may regret that the time of easy credit and low down payments (taux hypothecaire) are gone, however.
Today, only good credit risks are being considered for mortgages (taux hypothecaire), and a reasonable down payment is being required.
For those buyers who can meet the new conditions, the real estate market can be a very attractive one, because (taux hypothecaire) interest rates are holding at historically low prices and there are some really good values in the market.
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