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How things have changed: Deposit mortgages in 2009 compared with now

Just before the world entered recession in 2008, home owners found that getting a mortgage was a simple, straight forward affair. Deposits were rarely needed, and many banks offered borrowers 125% mortgages which included enough extra money to cover moving costs, stamp duty and other charges associated with buying property that weren't directly connected to the cost of the house itself.

The reason for this, despite how crazy it looks to us right now, was that housing looked to be a solid investment. Prices were increasing continually and there didn't look to be an end in sight. Banks thought that getting their money back would be no problem, so they were more than happy to continue giving mortgages despite the fact that they knew the risks involved.

But unfortunately things didn't turn out quite as everyone expected. The price of houses has dropped almost 12% since January 2008, and the banks have taken huge hits, meaning that they needed to introduce much tighter lending guidelines.

In 2009, more than 25% of all mortgages were only available to buyers who could stump up a 40% cash deposit - a far cry from the scenario just a year earlier. On top of that, the numbers of mortgages on offer from lending institutions had totally collapsed, with a 33% fall in numbers in little over a year.

So how are things looking today compared to the high deposit mortgages of 2009? Well, they've improved a little. The vast majority of mortgage deals available at the moment are in the 15% and 25% deposit range, with far fewer making up the 40% side section of previous years.

However, this doesn't tell the whole story. The best mortgage deals on the table are still the 40% ones. They offer far superior terms for the borrower, as they represent much less of a risk to the lender.

If you're looking to enter the housing market right now, it's very important that you speak to an experienced expert who can offer you all the impartial advice you need. Don't jump straight in; you may regret it in a few years.

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