Mortgages Uncovered

Now a quarter of all Jersey residents who have a mortgage are facing a very uncertain future due to the sudden announcement that a leading lender is closing down.

The major mortgage lender in Jersey, known as Jersey Home Loans has a mortgage lending book which is estimated to be worth around £1 billion, has suddenly revealed that it will not be offering any new loans in the Island again. The first to be hit immediately are those who were offered new mortgages by Jersey Home Loans because it is highly likely that these offers will now be withdrawn which could leave some finding that their dream home is still only a dream.

Those people who already have mortgages could be left with very little choice other than to foot the huge cost of having to quickly swap lenders due to Jersey Home Loans only offering higher interest rates. Under the law of the Island of Jersey, lenders have to honour their contracts with their borrowers; therefore, if one of their customers has signed into a 25 year contract term, as an example, the lender is not legally allowed to renege on that agreement.

The parent company of Jersey Home Loans’ known as Kent Reliance has said that they had taken the di9fficult decision to completely shut the doors to any new customers which was most down to the harsh effects of the current credit crunch and they have also blamed the States for disallowing Jersey residents in using their savings products.