09 May 9.05.2016 Mortgages at risk
9.05.2016 Mortgages at risk
Financial Services Authority said it will pay stricter attention to the interest only vehicles. Irresponsible lending continues inflating housing market bubble. Such mortgages were made popular prior to 2008. This is a type of lending where capital payments are excluded from the start of the term affording the borrower only the low interest rates payments. This results in a lot of people taking on large expensive houses without paying much attention to the fact that the capital repayment was still required at the end of the term. In essence, anyone in UK can afford to live in an expensive house for over 30 years and at the end of the term simply default or walk away. This was one of the factors behind the house price drive and such practice was clamped by FSA following the 2008 fiasco. Today FSA is still struggling to tame the lenders operating in this sector.