Game over for the bears???

lynzpower

Work collegues missus - Mortgage Advisor - says that no building society/bank would entertain someone who wants to borrow 70% from them and 30% from this stupid govt scheme...AS THE 30% or whatever percentage WILL BE REGARDED AS A DEBT, INTEREST FREE OR NOT IT IS STILL A DEBT - NOT A DEPOSIT - AND WILL BE COUNTED AS PART OF YOUR OUTGOINGS!

Excellent, I had this pondering myself today at work.

Would lenders lend using this scheme?

Wonder if our freinds at northern rock are in cahoots over this? That will certainly pull us all out of the doldrums wont it?!!? :wall:

Please mortgage brokers, come forth and tell us what you know about this....

dopester

lynzpower wrote: »

Excellent, I had this pondering myself today at work.

Would lenders lend using this scheme?

Yeah I can see the banks giving their full approval. Such complexity in the market.

Dear Bank,

I really want a house in Rough Street for £175,000.

You'll be glad to hear that I won't need that much money because I get 25% shared equity, and a free 5 year 30% government loan, so really just need you to pony up the rest.

I'm sure I'll be able to make the repayments because even though we've moved to a 4-day week and had a pay-cut at work, I'm sure it is just a blip and if necessary I'll get a new job easily enough for more money. Although rest assured, if I can't, you can be third in the queue to get your money back come repossession.

Cheerio
Daniel

HammersFan

I don;t see these measures as making much difference at all. However, more and more we look to be heading towards a big lowering of interest rates (inflation pressures seem to be easing). Much as the BoE remit is labelled as being about lowering inflation, you can bet they are getting pressure to start cutting (especially after the US cut hard and quick and looks like it may have staved off a recession - for now). IMO getting a decent deposit ready to go to take advantage of good low fixed rates early next year might not be a bad position to be in (even for the bears).

dopester

HammersFan wrote: »

I don;t see these measures as making much difference at all. However, more and more we look to be heading towards a big lowering of interest rates (inflation pressures seem to be easing). Much as the BoE remit is labelled as being about lowering inflation, you can bet they are getting pressure to start cutting (especially after the US cut hard and quick and looks like it may have staved off a recession - for now). IMO getting a decent deposit ready to go to take advantage of good low fixed rates early next year might not be a bad position to be in (even for the bears).

So you think that if BoE cut interest rates than banks and building societies will suddenly want to lend money again, and cut their mortgage rates too.

Yes, I'm sure they will suddenly waive the dock-off deposits they now require, forget about much higher qualification criteria on borrowers, and just lend free and easy again.

More likely it will get ever harder and expensive to borrow for all but the very best credit risks, until house prices have crashed and even for years after that until a sustained and clear recovery comes in to play.

meanmachine_2

Dan: wrote: »

I tend to agree. Can't see any of these measures doing anything whatsoever.

Im more pleased to see mortgage rates still falling - RBS have gone down today I believe.

For once, Dan, I agree with you.

However, have rates fallen for those with 5 or 10% deposit? I suspect not.

Unless and until the government can magic a 1TRILLION securitisation market out of their backsides, nothing will send house prices back to 2007 levels - at least not for a few years.

(That won't stop the Daily Express tomorrow insisting: HOUSE PRICES TO BOOM AGAIN)

HammersFan

dopester wrote: »

So you think that if BoE cut interest rates than banks and building societies will suddenly want to lend money again, and cut their mortgage rates too.

Yes, I'm sure they will suddenly waive the dock-off deposits they now require, forget about much higher qualification criteria on borrowers, and just lend free and easy again.

More likely it will get ever harder and expensive to borrow for all but the very best credit risks, until house prices have crashed and even for years after that until a sustained and clear recovery comes in to play.

We aren't ever going to agree...but I'd point you in he direction of the bit in my post about having a decent deposit ready. I think the BoE will go as low as 3.5% and with a 10% deposit there will be fixes at around 4 and bit percent. This is conjecture of course, but I base it on what is on offer in the market now, with BoE rates at 5%. To be fair, there are plenty of people for who the figures will start to make sense again with long-term fix at <5%, even near today's prices.

I think it will be worth watching if BTL rates falls as much (which I doubt) but if they get near 5% then that might set that ball rolling again. Also by the middle of next year there are going to be lots of people who have been sitting on their hands for a couple of years (see low volumes). This means that the buyer without a deposit is going to be more rare than when the market was really revving.

Dan:_4

HammersFan wrote: »

I don;t see these measures as making much difference at all. However, more and more we look to be heading towards a big lowering of interest rates (inflation pressures seem to be easing). Much as the BoE remit is labelled as being about lowering inflation, you can bet they are getting pressure to start cutting (especially after the US cut hard and quick and looks like it may have staved off a recession - for now). IMO getting a decent deposit ready to go to take advantage of good low fixed rates early next year might not be a bad position to be in (even for the bears).

IMHO I think Interest rates will stay on hold until at least the of the year. BoE are in a tough position. If they lower them they will get !!!!!! for acting outside their remit of controling inflation. If they raise them they will be blamed for destroying the economy. What to do????

I do think they will come down late 2008/early 2009 and so will mortgage rates but not to previous lows.

Dan:_4

meanmachine wrote: »

.

However, have rates fallen for those with 5 or 10% deposit? I suspect not.

Only if you are an existing customer. I think the 95% LTV came down from 6.39% to 6.29%. And if you manage to get into the 90% LTV Range they are now 6.09%.

meanmachine wrote: »

.Unless and until the government can magic a 1TRILLION securitisation market out of their backsides, nothing will send house prices back to 2007 levels - at least not for a few years.

Agreed.

mr.broderick

Dan: wrote: »

Following today's news of Stamp Duty cuts, Government deposits and mortgage debt bailouts is it game over for all the bears who were looking forward to a significant house price crash?

I actually think this is a fair question. I have noticed a hell of a lot of the resident bears making an appearance today, i sense any positive news has them on tenterhooks and they rush to their laptops to see the reaction on mse and maybe they begin to wonder if they will ever buy. I have noticed mortgate rates creeping down over the last couple of months, i believe we are back to last summers levels now. I still firmly believe the recovery is on the horizon...You heard it first here....Mr.B.;)

Markyt

lynzpower wrote: »

Please mortgage brokers, come forth and tell us what you know about this....

Its just a variant of the open market homebuy scheme, as far as I know. Lender is first in the queue if / when it goes to repo, the 30% is put up by the govmint (or at least guaranteed by them), if the house is sold the lender gets first dibs on the money and whats left goes back to the gov, assuming there is a surplus - if not, the gov takes the hit.