News: FSA to cap mortgage borrowing

toonfish

koexelek wrote: »

The lenders will certainly give that the thumbs up.

Will mean most first time buyers won't even need to bother applying

it's a complete nonsense - we were limited to 3.5x salary when we bought out first house but the interest rate was 9%, so an identical loan today would cost probably 15-20% of the payments we paid at the time

koexelek

Errata wrote: »

Overtime, bonus and commission aren't guaranteed, which is why some people come unstuck if they've relied on them to pay the mortgage.

You have a point, but if you were in the sort of job where you were expected to earn commission and/or do overtime, and you were just surviving on just your basic, the chances are you would soon lose your job anyway .

Another point, it's ok to be smug and say what a great idea it is if it does not effect you personally.
For example, our current mortgage is 1.5 times joint income and about 40% loan to value, so it isn't going to worry me.
But I know when my kids grow up, they are going to struggle to buy anything at three times income.

LuFog_2

Does anyone know when this will be put into action if it goes through? I'm hoping I manage to sell my house and move on first...

TheGreatBear

the turner review was published today and there is no mention of restricting income multiples, or 100% mortgages for that matter.

so no need to panic

LuFog_2

If it has been published today, does that mean it could come into force very soon?

TheGreatBear

the issues raised are not discussed by the FSA until September, so any new direction they wish to take will probably not be in force for another year minimum!

Regards

LuFog_2

Cheers Great Bear! That really puts my mind at ease, just as long as I sell in time :-))