Lenders and brokers say fix your mortgage

mbga9pgf

There isnt if you have the collateral to back the risk. But why should banks lend to people that in all probability will default on their mortgages? I agree with you, that once the dust settles, banks will be more willing to lend, but only for those with deposits and net assets. Which, bearing in mind how deeply in debt we are, is a fair way off for some.

I think the appalling way that businesses are being treated by the banks needs sorting out. There is anecdotal evidence to suggest UK banks are focusing the majority of their lending abroad now, where rates are higher. So, UK taxpayer gets to pay for increased lending abroad. They are like cancer at times. Then again, unintended consequences and all that...

I would say in the mortgage market the issues for the banks are as follows:

Lenders ability to repay loan. - does the lender have enough collateral to cover costs of reposession?

Falling values - I dont think it is any doubt as to how far the banks are expectin prices to fall - hence the unattractive mortgage deals below 25% LTV.

Really2

mbga9pgf wrote: »

There isnt if you have the collateral to back the risk. But why should banks lend to people that in all probability will default on their mortgages? I agree with you, that once the dust settles, banks will be more willing to lend, but only for those with deposits and net assets. Which, bearing in mind how deeply in debt we are, is a fair way off for some.

I think the appalling way that businesses are being treated by the banks needs sorting out. There is anecdotal evidence to suggest UK banks are focusing the majority of their lending abroad now, where rates are higher. So, UK taxpayer gets to pay for increased lending abroad. They are like cancer at times. Then again, unintended consequences and all that...

I would say in the mortgage market the issues for the banks are as follows:

Lenders ability to repay loan. - does the lender have enough collateral to cover costs of reposession?

Falling values - I dont think it is any doubt as to how far the banks are expectin prices to fall - hence the unattractive mortgage deals below 25% LTV.

I agree on that (buts lets not agree to much:))

Ian_Griffiths_Halifax

mbga9pgf wrote: »

so you honestly think 125% IO, self-cert and 100% mortgages at 6X single salary will return, for those with a good salary?

Are you soft in the head?

There's never been any 125% IO mortgages.

Self Cert never went away.

100% mortgages are still available but are now known as Homebuy.

chucky

Ian_Griffiths_Halifax wrote: »

There's never been any 125% IO mortgages.

Self Cert never went away.

100% mortgages are still available but are now known as Homebuy.

thanks for clearing this up

someone has been on www.housepricecrash.com for too long.

Ian_Griffiths_Halifax

In my opinion, the Base Rate is likely to drop further, but there is a little less likelyhood of it dropping to 0% now as the last rate drop was only 0.5%. If the Government/BoE wanted us to see further significant reductions, then they'd have dropped it by 1%. Just my opinion.

I've been advising client to go for a 5 year Fixed rate for years. I have some clients, but only a few, on 10 year Fixed rates, and I have only a handful on 15 year Fixed rates. I have NO clients out of a client bank of over 5,000 on 25 year Fixed rates. To some degree this is down to not needing one, but also I'd advise against it as life can chuck so many changes at you that you can't really plan so far ahead and the penalties are usually so high that it wouldn't be worth taking the risk.

5 year Fixed rates are usually decent value as you only have the set up cost once for the 5 year term, whereas you'd incur costs 3 times if you took 2 year deals. If you take 2 year Fee Free deals each time, you will get a higher interst rate to pay for the costs.

mbga9pgf

There's never been any 125% IO mortgages. - No, sorry you are right, they only went as far as 100% :eek::eek::eek:

Self Cert never went away. - Yep, and do you want to show me a single Self-cert at affordable and comparable Interest rates?

100% mortgages are still available but are now known as Homebuy. - same as above.

The products may exist, but you would have to be extremely stupid or in a very special set of circumstances to make it worthwhile.

Ian_Griffiths_Halifax

Gorgeous_George wrote: »

I have a lifetime tracker at +0.74% making it 2.24% at the moment.

I think the base rate will fall further over the next few months - possibly to 0%.

I don't think base rates will rise above 2% for 5 years or above 5% for ten years (my opinion - always subject to change).

So come on then Mr Building Society/Bank, tempt me to switch mortgage products.

It'll change. Trust me, I'm a Broker. Mwahahahahaha, mwahahahaha, mwahahahaha (repeat to fade)

Ian_Griffiths_Halifax

mbga9pgf wrote: »

There's never been any 125% IO mortgages. - No, sorry you are right, they only went as far as 100% :eek::eek::eek:

Self Cert never went away. - Yep, and do you want to show me a single Self-cert at affordable and comparable Interest rates?

100% mortgages are still available but are now known as Homebuy. - same as above.

The products may exist, but you would have to be extremely stupid or in a very special set of circumstances to make it worthwhile.

I didn't say the rates were affordable or at a comparable interest rate, I just pointed out that you were wrong!

Just to please you though, a quick search of a Self Cert Mortgage borrowing £160,000 on a £200,000 property brought up a 5 year Fixed with Bank of Scotland at 5.99%. That's not bad if somebody needs a 5 year Fixed Rate on a Self Cert mortgage!

Oh, and the 125% mortgages only went up to 95% secured, not 100%.

mbga9pgf

Ian_Griffiths_Halifax wrote: »

Oh, and the 125% mortgages only went up to 95% secured, not 100%.

But that wasnt a problem, as there were plenty of developers willing to lend you the 5% as part of the offer...

Ian_Griffiths_Halifax

GDB2222 wrote: »

Mortgage brokers love 2-3 year fixed rates. That means the customer has to come back to them in a 2-3 years time and that means more fees. repeat business is the best business.

Fixing long-term => financial security for the borrower. It may not be the cheapest deal, but it's the least risky in most situations.

Most brokers will only advise on a 2-3 year Fixed rate if the product is right for the client, not for the fees involved. As you only need to rip somebody off once and the word will spread far quicker than if you got them the best deal on the planet.