Gordon Brown to bar 100pc mortgages

circuit

Gorgeous_George wrote: »

I think married applicants should be allowed 100% mortgages and those just 'living together' should be limited to 90%. The Government should replace stamp duty with a 0.5% tax on mortgages based on the average outstanding balance each year. Maybe lift it to 0.75% for those who are not married.

Discriminating against people with alternative religious beliefs, or those who don't have the money to get married before buying a home? Good luck with that!

MarkyMarkD

What tosh, circuit.

What religious beliefs prevent getting married?

And you can get married for next to nothing. You don't need to spend £20,000 on it, just because daft people do.

Dan_1976

He needs to ban 100% plus and the use of unsecured to get around it!

MarkyMarkD

But the 125% NR Together deal was just formalising a situation which many lenders were into anyway ... having customers with mortgages, personal loans, and maybe overdrafts all at the same time.

There's nothing worse about having them all in one place, compared to having the same amount of debt simply spread between different lenders.

RobertoMoir

MarkyMarkD wrote: »

Stamp duty is part of the reason that people need to borrow silly percentages of their property's value. Getting rid of stamp duty - even for a limited period - would help, whereas getting rid of 100% mortgages which nobody is offering, will not. Typical Gordo gesture politics.

He is presumably forgetting - deliberately - that the 125% products were structured as 95% secured mortgages plus 30% unsecured personal loans, so wouldn't be prevented by a ban on 100% mortgages in any case. Ooops!

If by "presumably forgetting" you mean "grandstanding to try and win the votes of people who don't understand the subject, while carefully avoiding actually fixing the real problem" then yeah, that sounds like the last few years of nulabour policy alright.

Time2Go_25

There's no reason for 100% mortgages to be banned and why should they, there's nothing wrong with them if they are affordable. Affordability is the key, which is worse:

1) I earn 100000 and want to buy a property at 200000 at 100% or

2) I earn 20000 and want to buy a property at 200000 with a 80000 deposit so LTV of 60%.

As a lender I'd take person 1 every-time.

jamesd

100% and higher mortgages are fine for appropriate borrowers. Just consider someone with lots of money in a stocks and shares ISA who is using that as the repayment vehicle. Forcing sale of the repayment vehicle to increase the deposit wouldn't make sense - it would make their position worse. Same for pension mortgages, where higher pension contributions are the way to go, not higher deposits.

udydudy

Dan_1976 wrote: »

He needs to ban 100% plus and the use of unsecured to get around it!

Have to disagree.Why not keep the responsibility on the lender/banker!!!. Why were the lenders, the FSA and others when caution and credit rating was disregarded? I guess every one including politicians were enjoying their champagne since they had helped fuel the boom and could increse their bonuses or shout from the top of the highest mountains that the boom-bust cycle had finally been taken care of.

Why did the lenders not analyze the credit risks that they were taking? I am totally against banning either mortgage or personal loan. Debt, as this site has shown can be used successfully to work for you.

Why should one pay a debt if he or she can earn more elsewhere. Which would mean keeping the debt?
today so many mortgagees may have mortgages at sub1%(trackers with below base rates) and savings earn even now 3-4%. me and OH have used this succesfully to build a savings at 6+% fixed in ISAs for 4 years(now 3 years more) with our mortgage below 1%.Whats wrong with that. We used debt to subscribe to ISAs in the year we bought our house as we could not afford to save that year as all our no ISA savings went to putting up a deposit.(less than 90% LTV)

The biggest flaw with the credit analysis is that they should be taking into account the savings and the debt into account. because a regular savings pattern over a longer period of time would highlight a persons financial habits.

These savings also help in terms of if one of us were to lose our jobs we can always dip into these savings to tide us over the next year or more paying our mortgage and credit cards without having to use the benefits system or defaulting.

Responsible lending and borrowing should be promoted nad that is not going to be possible just by banning 100% mortgages or personal loans.

Dan_1976

udydudy wrote: »

Have to disagree.Why not keep the responsibility on the lender/banker!!!. Why were the lenders, the FSA and others when caution and credit rating was disregarded? I guess every one including politicians were enjoying their champagne since they had helped fuel the boom and could increse their bonuses or shout from the top of the highest mountains that the boom-bust cycle had finally been taken care of.

Why did the lenders not analyze the credit risks that they were taking? I am totally against banning either mortgage or personal loan. Debt, as this site has shown can be used successfully to work for you.

Why should one pay a debt if he or she can earn more elsewhere. Which would mean keeping the debt?
today so many mortgagees may have mortgages at sub1%(trackers with below base rates) and savings earn even now 3-4%. me and OH have used this succesfully to build a savings at 6+% fixed in ISAs for 4 years(now 3 years more) with our mortgage below 1%.Whats wrong with that. We used debt to subscribe to ISAs in the year we bought our house as we could not afford to save that year as all our no ISA savings went to putting up a deposit.(less than 90% LTV)

The biggest flaw with the credit analysis is that they should be taking into account the savings and the debt into account. because a regular savings pattern over a longer period of time would highlight a persons financial habits.

These savings also help in terms of if one of us were to lose our jobs we can always dip into these savings to tide us over the next year or more paying our mortgage and credit cards without having to use the benefits system or defaulting.

Responsible lending and borrowing should be promoted nad that is not going to be possible just by banning 100% mortgages or personal loans.

We have become a short cut society. Why save or work harder when you can stick it on a credit card or borrow without deposits. 100% mortgages come with higher rates and I am guessing they have not been lowered like the 60-80% mortgages over the last 6 months.

House prices will come to down to match lending potential, this is why the FSA asked or told lenders to underwrite assuming a 40% drop in house prices. The first time buyer can then get on the market with a smaller deposit making it easier and more prudent.

Forget about the bankers and credit analysis, they got it wrong and now we have to pick up the bits and make some hard choices.

We can longer live like posh and becks on credit. How many people do you know over say 55 or 60 that have never had a credit card and never had debt other than a mortgage? Ask the same for 30-40 middle england!

Its simple we have to change our culture!

Sorry went off at a funny angle there!

paul4788

This is all tosh. There hasnt been a 100% mortgage around for some time which in itself is a problem. The best you can hope for is 90% and even then the rates are lousy.

The problem is if you brought a house 2 years ago @ 90% loan to value it is now probably over 100% loan to value.

Just shows you what that the people who should know whats going on actually have no idea whats happening.