Despite benefits sprung from Nationwide’s price cuts on 44 fixed and tracker rate mortgage products, the cost decrease will not be enough to create a market recovery.
Louise Cumming, head of moneysupermarket.com said the move was a positive step but will, however, not have a significant impact.
According to the price comparison site, Nationwide is not among their top 10 mortgage deals.
“Nationwide's new rates, while competitively priced aren't market leading. And the pricing restructure doesn't help alleviate the problems facing those with small deposits - the best deals are still restricted to borrowers with significant equity in their homes,” she said.
Ms Cumming states Nationwide should lower their loan to value rate if the market is to make a full revival.
Currently, the lender requires 40 per cent down to qualify for its lowest rates, rendering those only able to make small deposits facing difficulty investing in a home.
Nationwide has, however, made a constructive change by including a booking fee upfront to secure a product. Though minimal at £99, it could prove to be mutually beneficial.
“Nationwide obviously wants some commitment that borrowers will see the application through to completion - if borrowers have to pay upfront, they are less likely to drop out part-way through the process,” Ms Cumming continued.
“As well as being costly for lenders if applicants drop out at the last minute, it could also be dangerous for consumers: many don't appreciate the damage multiple applications can have on their credit profiles.”
With credit scores a heavily weighted tool during the current financial crisis, even small efforts can make a difference.
http://www.myfinances.co.uk/news/mortgages/fixed-rate-mortgage/fixed-rate-mortgage/nationwide-mortgage-cuts-only-a-first-step-$1316328.htm
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With this recent situation, few people in UK may not consider buying a house these days or applying for a mortgage.
Saturday, August 8, 2009
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