Mortgage woes: the worst may be yet to come
31/07/08 09:36 AM
THE International
Monetary Fund has warned the world to look out. It
says the financial crisis that began in the US
mortgage market is spreading deeper into other
countries and other forms of debt - and countries
that rely on foreign borrowing are vulnerable.
As the Australian stockmarket fell heavily for the third day in a row and the National Australia Bank reported that business confidence is at its lowest level since the 1991 recession, the IMF warned that falling house prices could lead to widespread losses in Western countries.
In a terse three-page update to its April report, Global Financial Stability, the IMF did not mention Australia. But it warned that global investors had become wary about where they park their money and were demanding higher premiums to lend to countries with current account deficits higher than 5% of GDP.
Australia's deficit is 6.25% of GDP, and its banks are already paying steeply higher premiums on global and Australian markets, which they pass on to home buyers and other lenders through frequent rate rises.
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As the Australian stockmarket fell heavily for the third day in a row and the National Australia Bank reported that business confidence is at its lowest level since the 1991 recession, the IMF warned that falling house prices could lead to widespread losses in Western countries.
In a terse three-page update to its April report, Global Financial Stability, the IMF did not mention Australia. But it warned that global investors had become wary about where they park their money and were demanding higher premiums to lend to countries with current account deficits higher than 5% of GDP.
Australia's deficit is 6.25% of GDP, and its banks are already paying steeply higher premiums on global and Australian markets, which they pass on to home buyers and other lenders through frequent rate rises.
Click here for full story
Footnote: Get yourself pre-approved for a home loan in just 60 seconds using My Home Loan Approvals exclusive software. It’s FREE, FAST and it can be ANONYMOUS. Be sure to check out the fantastic range of Home Loan Calculators. Answer those questions:- “How much can I borrow” and “What will my repayments be”. Fast Home Loan approvals are possible even home loans for people with bad credit.