GMAC SVR trap!

Wutang_2

I still can't quite work out where the 'trap' is....I thought a trap was something you didnt see coming?

Conrad

Bigboss

GMAC have a more risky client base than Nationwide and other traditional lenders, so it follows the investors behind GMAC funding require a higher return to compensate for higher risk, and higher deliquency levels.
NOTHING will alter this.

Buy to let is a business. Any business person needs to understand all the risks and features of a new business, and that includes looking at the long term funding rate.
If you wanted a low rate long term you should have looked at lenders such as Building Societies that have a track record lower than GMACs.

thebigboss_2

_Andy_ wrote: »

No, and I don't work in financial services (any more). Not being 'hard' at all, I just think some people need to accept that when you agree to a contract that involves going onto an SVR that has no guarantes that it will rise or fall in line with BOE BR then it's no good complaining when you go on to said SVR.

Ultimately any lender is there to make profit.

Until the public has to bail them out because all they thought about was their profit. I think the payback for the taxpayer, you, me, should be passed on cuts across the board as we bailed them out. Why don't you work in financial services anymore Andy?

Conrad

GMAC last time I checked is an American backed lender, so UK Tax interventions arent relevant.

thebigboss_2

Wutang wrote: »

I still can't quite work out where the 'trap' is....I thought a trap was something you didnt see coming?

Now you're going to tell me you saw ALL this coming Wutang.........you must be rich!

A trap is something you can't get out of.

thebigboss_2

Conrad wrote: »

GMAC last time I checked is an American backed lender, so UK Tax interventions arent relevant.

GMAC-RFC is the UK finance arm of General Motors. It is a UK listed company.

TighterThanTwoCoatsOfPain

thebigboss wrote: »

Now you're going to tell me you saw ALL this coming Wutang.........you must be rich!

lol, are you joking? This time last year SVRs we mid mid to late 7%!

6.99% isnt a large SVR by any standard... larger than some are now, yes, "large" - no.

Why can people never see (or remember) beyond the end of their nose!

luckyfool

thebigboss wrote: »

Until the public has to bail them out because all they thought about was their profit. I think the payback for the taxpayer, you, me, should be passed on cuts across the board as we bailed them out. Why don't you work in financial services anymore Andy?

Gmac aren't lending new mortgages in the UK anymore, and are not a high street bank. The likelihood of them being bailed out (at least in the UK) is vanishingly small.

dunstonh

however I would like to point out that the government intervened in favour of the banks with taxpayers money.

So what? That has nothing to do with the interest rate being set.

As Conrad mentioned GMAC tended to be a high risk lender. High risk lenders would have higher margins to cover the higher risk.

I think the payback for the taxpayer, you, me, should be passed on cuts across the board as we bailed them out.

You mean you want taxpayers to subsidise your investments? Even those of a lender that has nothing to do with HMG?

6.99% isnt a large SVR by any standard... larger than some are now, yes, "large" - no.

Yep. Anything less than about 7.5% is below the long term average.

thebigboss_2

I agree with all the pro lender comments, let's hear it for the lenders and their profits, their robust morals, their integrity, their commitment to social justice etc.

Being a business and doing what is right are NOT mutually exclusive. All I'm trying to get people to think about is why the government pressured SOME lenders to pass on the full cut and not others. I still pay my BTL mortgages, they are a long term investment that will dip every now and then. Lets stick to the issue. Why some and not others?