Mortgage terms 'getting tougher'

The lending criteria of a number of top mortgage providers have been tightened in the last month, figures have shown.

MoneyFacts.co.uk, the personal finance website, revealed that 11 lenders had cut their loan-to-value (LTV) ratios since December.

This means borrowers are being asked to come up with larger deposits or reduce their expectations.

"Since the beginning of December 11th mortgage lenders have reduced the maximum loan to value they offer on some or all of their mortgage range," said David Knight, mortgage analyst at Moneyfacts.co.uk.

"This is an understandable about turn from the lending strategies we have witnessed over the last five years or so, when lenders pushed LTVs to highs of 130 per cent, with 95 per cent products considered the norm."
 
The liquidity squeeze has made life difficult for mortgage providers, prompting many to tighten their lending requirements.


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