Councils want power to offer mortgages

baileysbattlebus

seven-day-weekend wrote: »

Some friends of ours had a 95% fixed rate Council mortgage too which helped them to buy their first home.

We couldn't get a mortgage at all in 1976 because our house was over 100 years old. (Just an ordinary mid-terrace house). In the end, after an interview with an IFA and Staffordshire Building Society, we were able to borrow 75% of the asking price PLUS had to have an indemnity to assure the lender of their money if all went pear shaped.

They didn't give them out like sweets in those days.

Ah yes - the price of the house £3,000 of which we were allowed to have on mortgage £2750.

We lived in this house until 2004 when we went to Spain and now our son lives in it.

I can't believe that anyone would even WANT 125% mortgage, let alone lenders being daft enough to grant them.

My sister had a mortgage retention on her first house (old terrace), house was £3000, they had initially a £300 deposit but the building society withheld about £500 (which they had to find themselves to buy the house) for a year because they said there was some work that needed to be done and they would withhold the money until it was completed. They completed the work but didn't need the retention in the end.

So it was really a lot tougher to get the money to buy somewhere.

seven-day-weekend

We had various additions to our mortgage to renovate the house; they were strict about what you used it for and they never let us have 0 or negative equity (not that we would have gone anywhere near that in any case).

brightonman123

the auction thing could be a good idea, for larger organisations..

harryhound

baileysbattlebus wrote: »

I have no objection to councils offering mortgages - they did when I was younger - the fixed rate my parent's friends got was higher than the variable rate at the time - which was why people thought they were mad. But the rate was fixed for 25 years. Mortgage borrowing was from limited sources then - building societies and some times councils and the criteria for being accepted by either was strict.

Also, there wasn't the bottomless money pit that happened when the banks were able to offer mortgages and not just loans. The building societies were deregulated in 1981, by Mrs Thatcher, allowing banks and other institutions to provide mortgages.

When mortgages were provided by a building society each branch had an amount of money to lend each month, once it was gone it was gone. They had fairly strict lending criteria based on income and savings and it was backed by household savings - they had to have the money to lend.

When deregulation happened the banks and financial instutions fell over themselves to give people mortgages.

100% mortgages appeared and they didn't have to have the money to lend the money could come from a number of sources like short term money market funds etc.

Lending ratios changed from the traditonal 3x. +1, I remember in the mid 1980's being offered 4.5 times salary. We didn't take it, we bought a cheaper house.

In the 50's about 30% of people owned their homes by the mid 90's it was nearly 70% and now I think the figure just tops 80%.

Easy money and a buying frenzy. Hey Ho!

Banks insurance companies and private individuals all used to grant mortgages BUT they were very cautious as a mortgage is a classic example of the dangerous "borrow short lend long" trap.
My dad got a mortgage in 1956 from an insurance company, the choice was 4 1/4 variable or 4 3/4 fixed. He took the fixed option.on a massive 3,000 loan:D

justpurchased

harryhound wrote: »

My dad got a mortgage in 1956 from an insurance company, the choice was 4 1/4 variable or 4 3/4 fixed. He took the fixed option.on a massive 3,000 loan:D

In 56 that was massive. average wage £8-£10 Per week:eek:(i believe dont hold me to it) £380-£480 PA.

neverdespairgirl

justpurchased wrote: »

In 56 that was massive. average wage £8-£10 Per week:eek:(i believe dont hold me to it) £380-£480 PA.

In 2006, £3000 0s 0d from 1956 was worth:

£1,780.41 using the retail price index
£54,338.09 using the GDP deflator
£133,527.87 using the average earnings
£157,619.42 using the per capita GDP
£186,575.65 using the share of GDP

justpurchased

neverdespairgirl wrote: »

In 2006, £3000 0s 0d from 1956 was worth:

£1,780.41 using the retail price index
£54,338.09 using the GDP deflator
£133,527.87 using the average earnings
£157,619.42 using the per capita GDP
£186,575.65 using the share of GDP

Well the last house i purchased was purchased for around £3000 that was new 1968! And that would not be a starter home. Different areas i guess.

harryhound

OK try and win the prize.
The house was much in its original state but delapidated, when sold by his widow's executor (me!) in 2005.

Your mission is to guess what it sold for.

Harry

BTW it was a 75% mortgage.

justpurchased

Guess £500K'ish

I would say aroud £300k+ if it was in my locality,

Edit If I do win a prize can it go to charity.

neverdespairgirl

Which house is that, then?