Recapitalised banks 'cherry picking' applications.

The only banks that are truly ‘open for business’ are those that have received state funding, and this is on both sides of the book.

On the deposit side Anglo are paying market leading rates, they are now fully nationalised, and because their new owners have the deepest pockets the ‘better banks’ who didn’t need a state sponsored bailout cannot compete.

On the lending front only two banks are actively engaged in lending at somewhat regular levels, and they too were saved by the taxpayer (because that is where the state get their money from). However, rather than being the ‘saviours’ of the banking sector they are merely taking the best of applications and opting for the cream of the crop, any ‘increase’ in lending is as much down to artificially low margins on rates (state sponsored), and gaining customers that would have gone elsewhere in an operational market (because if every other bank is unable to obtain state funding to lend with then they have to lose customers to those that did …

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Recapitalised banks ‘cherry picking’ applications.

The only banks that are truly ‘open for business’ are those that have received state funding, and this is on both sides of the book.

On the deposit side Anglo are paying market leading rates, they are now fully nationalised, and because their new owners have the deepest pockets the ‘better banks’ who didn’t need a state sponsored bailout cannot compete.

On the lending front only two banks are actively engaged in lending at somewhat regular levels, and they too were saved by the taxpayer (because that is where the state get their money from). However, rather than being the ‘saviours’ of the banking sector they are merely taking the best of applications and opting for the cream of the crop, any ‘increase’ in lending is as much down to artificially low margins on rates (state sponsored), and gaining customers that would have gone elsewhere in an operational market (because if every other bank is unable to obtain state funding to lend with then they have to lose customers to those that did …

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Am I eligible for a mortgage? How do you know?

We are often asked by clients if they would be eligible for a mortgage, the questions tend to be ‘could I get a mortgage?’ and if so ‘what is the maximum mortgage I can get?’ or how they should ‘go about applying for a mortgage to see how much we can borrow’. All of these are valid concerns and in the current market there are several factors which favour buyers.

When we talk about property and mortgages we tend to avoid the use of the word ‘affordability’ and it is important to understand that affordability is banking talk for ‘how much debt can we put you in’. The way that affordability is calculated is by looking at rates and then looking at property prices, because prices have come down and rates are doing the same the ‘affordability’ has increased, however, it is the underlying price of property that we urge our clients to focus on because rates change and market cycle interpretation using things like affordability are impressive …

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