3 times salary! How ridiculous!

Wig

I would go further.

I think 3x salary is perfect and for two people buying together 3x + 1x is as far as I would go.

But I would also add, that 75% LTV should be the maximum loan amount.

And I would also change it so that if a borrower defaults on the loan, that the house becomes the ONLY means for the lender to recover their losses. So a borrower whose house is reposessed can walk away with no debt relating to the mortgage, no matter how little the property is then sold for.

These 3 measures will bring stability and reasonable growth into the housing market. and we won't return to the crazy situation we have had for the last 30 - 40 years

poppysarah

Wig wrote: »

And I would also change it so that if a borrower defaults on the loan, that the house becomes the ONLY means for the lender to recover their losses. So a borrower whose house is reposessed can walk away with no debt relating to the mortgage, no matter how little the property is then sold for.

So that would mean NO MEW ever.

barnaby-bear

Wig wrote: »

I would go further.

I think 3x salary is perfect and for two people buying together 3x + 1x is as far as I would go.

But I would also add, that 75% LTV should be the maximum loan amount.

And I would also change it so that if a borrower defaults on the loan, that the house becomes the ONLY means for the lender to recover their losses. So a borrower whose house is reposessed can walk away with no debt relating to the mortgage, no matter how little the property is then sold for.

These 3 measures will bring stability and reasonable growth into the housing market. and we won't return to the crazy situation we have had for the last 30 - 40 years

So someone's fraud, irresponsibility, lack of budgetting, bad luck, relationship breakdown has to be paid for through others savings, and pension funds.....

Wig

barnaby-bear wrote: »

So someone's fraud, irresponsibility, lack of budgetting, bad luck, relationship breakdown has to be paid for through others savings, and pension funds.....

No, because the Lender, knows they will have to pick up the tab, if the borrower defaults. So they will do PROPER tests and lend responsibly, to people who can repay the loan. Plus the max LTV 75% will protect the lender aswell.

poppysarah

Wig wrote: »

No, because the Lender, knows they will have to pick up the tab, if the borrower defaults. So they will do PROPER tests and lend responsibly, to people who can repay the loan. Plus the max LTV 75% will protect the lender aswell.

That's true. If you lend less on a property then you're more likely to recover the money on it.
You could build in rules about deliberate damage/lack of insurance etc

poppysarah

Would it be a step too far to ask couple to undergo relationship counselling interviews too before committing to a mortgage?

I suspect everyone should undergo "mortgage and householder responsibilities 101" before getting a mortgage application form too though

GrammarGirl

poppysarah wrote: »

Would it be a step too far to ask couple to undergo relationship counselling interviews too before committing to a mortgage?

I suspect everyone should undergo "mortgage and householder responsibilities 101" before getting a mortgage application form too though

Maybe not counselling but I think couples should DEFINITELY live together for a considerable stretch of time before buying a place together. My friend is currently buying with her boyfriend. Both are 23, have never lived away from home or with each other and he has 80% of the deposit. Dangerous situation, in my opinion.

lostinrates

GrammarGirl wrote: »

Maybe not counselling but I think couples should DEFINITELY live together for a considerable stretch of time before buying a place together. My friend is currently buying with her boyfriend. Both are 23, have never lived away from home or with each other and he has 80% of the deposit. Dangerous situation, in my opinion.

I think this a good practical point for young people, but older people, people already homeowners in their own right getting together...maybe as a result of failed marriage etc...I don't see how its practical throughout a chain. I think in cases like this, people have freedom to choose. A greater concern, IMHO, is lack of affordability-and where default is an issue- rather than individual instances of, well, lack of prudence in personal lives.

GrammarGirl

lostinrates wrote: »

I think this a good practical point for young people, but older people, people already homeowners in their own right getting together...maybe as a result of failed marriage etc...I don't see how its practical throughout a chain. I think in cases like this, people have freedom to choose. A greater concern, IMHO, is lack of affordability-and where default is an issue- rather than individual instances of, well, lack of prudence in personal lives.

Ah yes, sorry I did mean younger couples! I think once a person has been through the processes of buying a house, they are well aware of the stress that comes with it. Also, experience of living with another person or even just living alone will prepare them for buying a house and living with a new partner.

For someone to go from secure, cosseted living with their parents to the frightening world of house buying seems madness to me! And what if they don't get on? What if she absolutely cannot live with his bad habits? If they'd rented she would know for sure.

lostinrates

GrammarGirl wrote: »

Ah yes, sorry I did mean younger couples! I think once a person has been through the processes of buying a house, they are well aware of the stress that comes with it. Also, experience of living with another person or even just living alone will prepare them for buying a house and living with a new partner.

For someone to go from secure, cosseted living with their parents to the frightening world of house buying seems madness to me! And what if they don't get on? What if she absolutely cannot live with his bad habits? If they'd rented she would know for sure.

I accept your point, but again, I don'tthink its practical. One could equally say older divorced couples already have shown they are prepared to separate and thats a risk I absolutely agree with you on a human level ; but I think this would be un comfortable progression into personal rather than financial life. People would also circumnavigate it very easily. 'I'm buying it as a joint purchase with 'my friend'' is a likely way.