Categorized | Finance and Mortgage

Increase in Overdue Mortgage Loans

Increase in Overdue Mortgage Loans
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Records have shown a sharp increase in the number of loans overdue. Experts have attributed this to the high number of new clients coming in to the market to buy new homes and also a continuous increase in interest rates.

The past few years have seen a rise in interest rates, especially in the wake of the financial crises that have hit many countries. Though the effects are subsiding, experts have predicted that, the increase will continue as most of the financial institutions are yet to fully recover from the crisis.  A survey conducted by the Australian Economic Outlook predicts a further rise in overdue loans for some more time.

These factors are scaring away new home buyers as they are pushed to the sidelines. They need to be putting off their purchase as they constantly need to adjust their budgets to be able to accommodate frequent price increases. Home developers constantly increase their prices as prices of building materials are on the increase each day.

Coupled with unemployment and wage cuts, many people are unable to keep with the fulfillment of their obligations when it comes to paying off their loans. Jobs are cut every now and then and affected employees find it difficult to raise money for their upkeep, let alone pay loans.

A little increase in home purchases by first time buyers was recorded during the time of bail-out of some of the financial institutions by government.

Experts however say that this is not likely to affect real estate industry profits in any way.

 

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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