Money Tips Daily By Charles Kelly, Former Ifa And Author Of Yes, Money Can Buy You Happiness.

Prior to the 2008 financial crash lenders were routinely giving out 100% and even 125% mortgages, self-certification mortgages with no income checks and up to 10 times income multiples. This all changed after 2008 when several lenders went bust and the government had to bail out High Street banks in the UK such as Lloyds and RBS, which owned NatWest. But it was not 100% or even self-certification mortgages that got lenders into trouble. Lenders such as northern rock decided to expand into commercial lending which was outside of their experience and comfort zone. Subprime lending, or giving mortgages to people with poor credit history, previous arrears and even bankruptcy, also cause massive problems for American investment banks who sold derivatives of these products as triple AAA security. The vast majority of the actual loans were still being paid in the UK. Lenders also branched out into buying up estate agencies and other businesses which was a big mistake since they paid far too much for these businesses