As we all know we are in the midst of a huge credit crisis and the main reason this has been caused is because of the banks. Over the last five years banks were giving mortgages to families and individuals that just could not afford them and missing payments. This has all led to the demise of the banks and businesses that were relying on them failing too.
I have always said that if you have not got the money to buy something, them simply do not buy it ans wait until you are in a better position? I mean lending huge amounts of money. So this is ultimatley why banks need to sit down and think about who they give their cash too.
I have noted down a few situations where the banks should not be giving money too.
1) People that are on small salaries, what the banks are not taking into account is the fact that people have a lot more monthly expenses then just a mortgage. They have travel costs, food costs, bills and much more that have to be taken into account. So someone that is earning 30k in my view should not be borrowing huge amounts for a home.
2) How long have they been in their work place? There are a huge amount of people in the world that just hate working and end up getting sacked from every job they get. These people then make up their minds to look for a job after a year and as soon as they find one they think they are rich and rush out to get a mortgage and other financial commitments. And to be honest noone really tells them any different, the banks seem to agree with them by handing over money.
3) A very important aspect that the banks should look at is the lifestyle of every individual. How many times have gambling addicts got given a mortgage and car and then blow there monthly repayments on playing online poker or roulette. Addicts just will not stop so lending them money would be a huge no no.