House prices down to at least 115K... Thans FSA! 3X here we come!

b0rker

Graham_Devon wrote: »

Like I said, it's nice to think these things could be done, but they are just not practical. That don't mean I'm a marxist or a plonker. It's just pretty damn impossible to carry out what people are actually suggesting.

Yes it does. I demand a witch hunt. I will ensure that you are blacklisted and that you can never get credit again in my fair Britain.

I would come out with more hyperbole but I have a sore shoulder and it is a bit difficult to type right now.

Graham_Devon

lostinrates wrote: »

But this is fine: use the mulitple as a starting point, and then only revert to the more cmplicated and obviously more expensive to applicant...methods for people wanting some thing 'not norm'. Expect to show a pattern of spend/earning for three years perhaps.

Some people don't change much. We don't. Thats a contributary for why climing an inane 'property ladder' isnt really ofany interest to us.

Thank you for a well reasoned responce though

Surely this though, is one of the reasons self cert exists? (or did, not sure if its gone).

If it's different from the norm, self certify.

The fact these self certificate mortgages have had so much trouble when it comes to people unable to pay though, surely shows these kind of schemes simply do not work. not everyone on a self cert has gone down, but a larger percentage than traditional have....which has a knock on effect to ALL of us.

lostinrates

Graham_Devon wrote: »

Surely this though, is one of the reasons self cert exists? (or did, not sure if its gone).

If it's different from the norm, self certify.

I have to admit ignorance of self certs. I believed self certwas a (flawed) model suited to the self employed and abused by the self employed et al not a model designed to assess affordabilty out sid ethe nomal guage, but rather to indicate selfemploeyed/outside normal employment income was sufficient. Indeed, if it were as you suggest, I'm surprised its popularity during a time of lending when ''normal'' mortgages offered large multiples.

Graham_Devon

lostinrates wrote: »

I have to admit ignorance of self certs. I believed self certwas a (flawed) model suited to the self employed and abused by the self employed et al not a model designed to assess affordabilty out sid ethe nomal guage. Indeed, if it were, I'm surprised its popularity during a time of lending when ''normal'' mortgages offered large multiples.

It wasn't solely aimed at self employed. It could be used by anyone (so long as eligible) who wanted something that you couldnt get through normal policies. Employed / self employed, don't matter.

So it worked for self employed, as they couldnt show books, but they said they could afford it. I know an employed couple on a self cert, as the bank wouldnt lend them enough for the house they wanted.

It's exactly what is being said now. "I can afford it, why shouldn't we have 5x lending tailores personally to me".

Well, so long as self certs are still around (I dont know), you can, just self certify. It's going to be a slightly higher rate, but thats what you get for having something tailored. If they are not around, then we are simply asking for a return to the massively dodgy self certificate mortgage.

lostinrates

Graham_Devon wrote: »

It wasn't solely aimed at self employed. It could be used by anyone (so long as eligible) who wanted something that you couldnt get through normal policies. Employed / self employed, don't matter.

So it worked for self employed, as they couldnt show books, but they said they could afford it.

It's exactly what is being said now. "I can afford it, why shouldn't we have 5x lending tailores personally to me".

Well, so long as self certs are still around (I dont know), you can, just self certify. It's going to be a slightly higher rate, but thats what you get for having something tailored. If they are not around, then we are simply asking for a return to the massively dodgy self certificate mortgage.

re not for self employed...yep, thats why I said ''et al''

Surely if this is the case these mortgages will be similarly 'disallowed' on the multiple equation.

To be clear, I am not proposing people lie or mislead as to income, but rather that affordabilty within that income is considered.

e.g. lets say, , for arguments sake, I earn £10k a month, £120k per year and we are in a stable market...put HPC/HPI aside for a moment.

If I have a multiple of three I can spend £360k on a house plus my deposit. TBH, putting in the context of SE housing, in particular lets say London housing, a very, very nice wage doesn't stretch so far. And yet on £10k per month I could out a fairly sizable portion, indeed a bigger propeortion of my income than, lets say, someone earning quater of that, of my ernings into mortgage payments, even after retirment planning, ISA investment, and having some fun.

Graham_Devon

lostinrates wrote: »

re not for self employed...yep, thats why I said ''et al''

Surely if this is the case these mortgages will be similarly 'disallowed' on the multiple equation.

To be clear, I am not proposing people lie or mislead as to income, but rather that affordabilty within that income is considered.

e.g. lets say, , for arguments sake, I earn £10k a month, £120k per year after tax. and we are in a stable market...put HPC/HPI aside for a moment.

If I have a multiple of three I can spend £360k on a house plus my deposit. TBH, putting in the context of SE housing, in particular lets say London housing, a very, very nice wage doesn't stretch so far. And yet on £10k per month I could out a fairly sizable portion, indeed a bigger propeortion of my income than, lets say, someone earning quater of that, of my ernings into mortgage payments, even after retirment planning, ISA investment, and having some fun.

Yep, again see what you are saying.

My view then, would be to say either buy a place within that 360k bracket, then save, or rent for one year, and build up a 50k deposit.

Thing is. When it's 3.5x earnings, that 360k will buy a HELL of a lot more than what 360k does at todays inflated prices. So the issue won't be the same.

piggeh

lostinrates wrote: »

I didn't see this but my reply to Chucky in the post below yours answers this I think?

I read your view and agree really, the multiplier isn't the be all and end all. Ultimately it will never be. Banks will always work out new ways to get round any limitations and then through, ahem, 'financial advice', people will be told about these new loopholes which will allow them to go beyond 3x multiplier.

What we really need is legislation that will ensure the banks lend responsibly in every transaction, not just ones where they get tied down to ratios or multipliers. They could be tied down to a multiplier of 3 yet debtors could still go and blow £50k elsewhere and end up in trouble. I know the 3x multiplier is traditionally a 'safe level of lending' but then previously we have never had so much credit card and loan debt.

How would you get banks lending (socially) responsibly again is really the bigger question - maybe if we give them more information about peoples' circumstances, they could make more informed decisions? How about if credit scoring was standardised? How about if we nationalised the banks? Maybe we should ban those companies that make up fake wage slips?

I think maybe looking at multipliers is pretty narrow-minded, the problems are obviously far more reaching. this is especially so when banks buy subprime debt from other countries.

Having said that I still think a 3x multiplier is a step in the right direction personally speaking

I do think also that wanting to extend yourself beyond 3x multipliers is maybe a sign of the 'want it now' attitude that shouldn't really be encouraged. It's like the FTB arguments stating people should work their way up - if this is so then these people could also work their way up by saving a bigger deposit.

lostinrates

Graham_Devon wrote: »

Yep, again see what you are saying.

My view then, would be to say either buy a place within that 360k bracket, then save, or rent for one year, and build up a 50k deposit.

Thing is. When it's 3.5x earnings, that 360k will buy a HELL of a lot more than what 360k does at todays inflated prices. So the issue won't be the same.

No, I'm obviously not expressing myself clearly, I apologise, I have a problem with clarity. CAn I come back later on this, because I'm having trouble typing and being clear ATM? You're not answering the question I'm trying to ask.

Graham_Devon

lostinrates wrote: »

No, I'm obviously not expressing myself clearly, I apologise, I have a problem with clarity. CAn I come back later on this, because I'm having trouble typing and being clear ATM? You're not answering the question I'm trying to ask.

Hey, if it's a difficult one, I'm gonna spin it anyway

lostinrates

piggeh wrote: »

I read your view and agree really, the multiplier isn't the be all and end all. Ultimately it will never be. Banks will always work out new ways to get round any limitations and then through, ahem, 'financial advice', people will be told about these new loopholes which will allow them to go beyond 3x multiplier.

What we really need is legislation that will ensure the banks lend responsibly in every transaction, not just ones where they get tied down to ratios or multipliers. They could be tied down to a multiplier of 3 yet debtors could still go and blow £50k elsewhere and end up in trouble. I know the 3x multiplier is traditionally a 'safe level of lending' but then previously we have never had so much credit card and loan debt.

How would you get banks lending (socially) responsibly again is really the bigger question - maybe if we give them more information about peoples' circumstances, they could make more informed decisions? How about if credit scoring was standardised? How about if we nationalised the banks? Maybe we should ban those companies that make up fake wage slips?

I think maybe looking at multipliers is pretty narrow-minded, the problems are obviously far more reaching. this is especially so when banks buy subprime debt from other countries.

Having said that I still think a 3x multiplier is a step in the right direction personally speaking

I do think also that wanting to extend yourself beyond 3x multipliers is maybe a sign of the 'want it now' attitude that shouldn't really be encouraged. It's like the FTB arguments stating people should work their way up - if this is so then these people could also work their way up by saving a bigger deposit.

I think this is more true in a standard urban/suburban environment. I think my example of oursituation, with a 6 figure deposit shows some savings commitment, personally!