Mortgage Loans example essay topic
"Thanks to that, state banks would be able to offer more attractive interest rates on rouble denominated mortgages, although they already are ahead of everyone else. Still, requirements for potential mortgage takers are to stay rigid". In the first months of the financial downturn, the Russian mortgage market nearly collapsed, as many banks stopped giving loans to many people, while others sharply raised interest rates. "Last year, an increase in interest rates on mortgage loans and total refusal by the majority o banks to provide mortgage loans resulted in a decline of mortgage deals and property deals in general", Igor Roganovich, director of the elite property department at Knight Frank, told The Moscow News, adding that the proportion of house purchases involving a mortgage dwindled to five per cent in the summer of 2009, compared to about one third at the end of 2008's third quarter. According to Roganovich, the upmarket segment was hit most.
"In a situation of uncertainty on the labour market, many potential buyers of business class property - mostly hired executives - weren't willing to sign long-term mortgage contracts", he said. "Also, when property prices went up rapidly, like in 2006, when the increase was 60%, mortgage loans were economically viable, as the increase in prices surpassed interest payments. Since the crisis the situation changed. 55.
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