How Strict Bank Regulations Keep the Home Rental Market Alive
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Although most people out there dream of owning a home (or two), there are many reasons why fewer and fewer of them are able to make this a reality nowadays - with one of the most common reasons being stringent banking regulations surrounding private home loans. Below are some ways in which bank rules and regulations are ensuring that the rental market remains extremely active.
#1 – Not Everyone Qualifies for a Mortgage
The reality is that not everyone qualifies for a traditional mortgage, and as time goes on, stricter bank regulations could reduce the amount of home owners even further. In most cases, people don’t qualify for mortgages because they aren’t able to secure permanent employment or they may have a poor credit score as a result of being blacklisted for unpaid bills in years gone by. This doesn’t alter the fact that they will still need somewhere to live though; however, they will have to rent accommodation until such time as they can qualify for a mortgage.
#2 – Paperwork may not be Worth the Hassle for Some People
Applying for a bad credit mortgage in Hamilton will require a substantial amount of paperwork to be submitted to a bank, private lending institution or mortgage broker. This can prove to be an administrative nightmare, especially in cases where documents are mislaid or when an applicant is not able to furnish as much information as is needed. Many people also think that it is not worth their while to go through this process, especially if they know that they may move within the next few years.
#3 – Not Everyone Can Afford to Buy a Home
Regardless of how affordable bad credit mortgages may seem to some people, not everyone has the means to cover the cost of a mortgage payment as well as the associated admin fees that need to be paid when a home is purchased. Many jobs nowadays simply don’t pay enough for people to buy their own homes, which results in them making use of the rental market in the area that they want to live in.
#4 – Job Loss can lead to Property Loss
Strict banking regulations stipulate that mortgages have to be paid on time every month to avoid repossession or foreclosure of a property - very few banks are willing to grant extensions on these terms. However, in cases where a buyer has lost their job, they may not always be able to adhere to these terms and conditions, which usually results in them having to forfeit their home and rent a place to stay until they can get back on their feet again.
If you would like to find out more about obtaining a second mortgage in Hamilton or you are considering purchasing a home for the first time, but have a bad credit score, contact us today to see how we may be able to assist you. We provide a range of bad credit mortgages that may be suitable for your particular financial situation.