Keep 100% mortgages?

Really2

Graham surely this is a credit driven recession.

To stop things like this happening again the risk as to be put on the borrower not the lender.

Anything 100% or more relives the borrow of risk and off loads it on to another borrower or saver.

It is fairly irrelevent on if it was the future or now as another recession will hapen and house prices will fall again.

stevetodd

Graham_Devon wrote: »

As I have already stated a couple of times.

This is thinking ahead. Not neccesarily for now.

Well the FSA is currently considering both LTV and salary multipliers in the context of the economic cycle. So in the time of the early years of a rising market from the bottom of the market, they may well not be applying too many restrictions on LTV (and mulitipliers) and if they do apply any restrictions at all, it is likley to be when the market starts too overheat.

Graham_Devon

Really2 wrote: »

Graham surely this is a credit driven recession.

To stop things like this happening again the risk as to be put on the borrower not the lender.

Anything 100% or more relives the borrow of risk and off loads it on to another borrower or saver.

It is fairly irrelevent on if it was the future or now as another recession will hapen and house prices will fall again.

It's not irrelevant at the moment. Yes house prices will fall in the future, but this is why this is only a capital repayment mortgage, with a lot of restrictions attached.

People only seem to have picked up on the 100% part, and not looked at the limits and restrictions?

It's only thoughts, so your welcome to input your thoughts. Just yesterday you were advocating no cap on lending multiples, which also holds risk. Every single mortgage holds risk.

JonnyBravo

Graham_Devon wrote: »

Seems we either have all or nothing at the moment. Gone from 125% 5-6x salary etc, to 90% deposit and high rates if your lucky.

Just trying to think ahead, find some middle ground and look for a sensible mortgage which works for the populace, but also the banks.

Eh?

You're just comparing it to the recent past and to rates available now with more deposit ie smaller LTV.
You can get 90% mortgages with 6.xx% rates easily enough if your credit rating etc are ok.
You mean that looks bad compared to a 3.99% rate for 60% LTV which you can now get.

But it (the 6.xx% rate) doesn't look at all expensive when you compare it to
historical norms of the last 30 years.


Is it the fact that those who have saved can get better rates that is bugging you?
You can't bemoan the system which got us here (which you regularly do) and then try and get part of it back in without expecting rules to be bent and headaches to occur again.

stevetodd

Graham_Devon wrote: »

It's not irrelevant at the moment. Yes house prices will fall in the future, but this is why this is only a capital repayment mortgage, with a lot of restrictions attached.

People only seem to have picked up on the 100% part, and not looked at the limits and restrictions?

It's only thoughts, so your welcome to input your thoughts. Just yesterday you were advocating no cap on lending multiples, which also holds risk.

It might be workable if the repayments were a bit more than normal (or perhaps slightly escalated annually), but that would obviously make an expensive mortgage even more expensive (in terms of affordability rather than value I mean)

Really2

Graham_Devon wrote: »

It's not irrelevant at the moment. Yes house prices will fall in the future, but this is why this is only a capital repayment mortgage, with a lot of restrictions attached.

People only seem to have picked up on the 100% part, and not looked at the limits and restrictions?

It's only thoughts, so your welcome to input your thoughts. Just yesterday you were advocating no cap on lending multiples, which also holds risk. Every single mortgage holds risk.

Graham,

OK this crash ends, A person in your sceme buys house for £100K

Losses job after a year and in that time house prices have droped 18%

So he as paid off around £1K capital but the house will most probably sell on the open market at a 20% loss or at auction at 30-40% loss

Can you not see a familier problem there.

JonnyBravo

Graham_Devon wrote: »

It's not irrelevant at the moment. Yes house prices will fall in the future, but this is why this is only a capital repayment mortgage, with a lot of restrictions attached.

People only seem to have picked up on the 100% part, and not looked at the limits and restrictions?

It's only thoughts, so your welcome to input your thoughts. Just yesterday you were advocating no cap on lending multiples, which also holds risk. Every single mortgage holds risk.

Agreed every mortgage holds risk.

On a 5 year fix and 25 year period you are looking at only paying 11ish% over the first 5 years though.
I'd say the deposit offers much greater protection and reduction of risk than your suggested limits and restrictions.

Graham_Devon

JonnyBravo wrote: »

Eh?

You're just comparing it to the recent past and to rates available now with more deposit ie smaller LTV.
You can get 90% mortgages with 6.xx% rates easily enough if your credit rating etc are ok.
You mean that looks bad compared to a 3.99% rate for 60% LTV which you can now get.

But it (the 6.xx% rate) doesn't look at all expensive when you compare it to
historical norms of the last 30 years.


Is it the fact that those who have saved can get better rates that is bugging you?
You can't bemoan the system which got us here (which you regularly do) and then try and get part of it back in without expecting rules to be bent and headaches to occur again.

Nothing is bugging me. I already have a 90% mortgage.

I'm looking for solutions and thoughts, rather than spending days here arguing about whos right and wrong and whos implied what.

The mortgage I have proposed and asked people to change around, just for discussion has a 6% rate anyway, so I don't quite get what you are trying to say I have stated about the bugging me thing.

I'm looking solely at the point of deposits being hard to save, especially in areas of high prices, and looking to try and discuss some sort of solution in these cases, to allow people to buy a home.

Graham_Devon

Really2 wrote: »

Graham,

OK this crash ends, A person in your sceme buys house for £100K

Losses job after a year and in that time house prices have droped 18%

So he as paid off around £1K capital but the house will most probably sell on the open market at a 20% loss or at auction at 30-40% loss

Can you not see a familier problem there.

Yes I can see that problem.

But again, you are looking passed the whole salary multiplier that restricts that person and allows them to have fixed monthly, lower payments (only 3-4x the wage) which will allow them to save (if they wish), as their mortgage payment won't be crippling them.

If they lose their job, they lose their job, anyone can lose their job.

The point with this mortgage is that it has allowed them, if they so wish to, to have saved a pot of money. They have also put 2k in, which could be used to pay the mortgage for 3 months, they could have mortgage payment protection should they so wish (anyone can have this).

With lower monthly payments, because of the salary multiple restriction, they should have more left over, meaning they should have been able to plan ahead a little, like we all should.

Seeing as you are finding so many problems with my thoughts, what are yours, to combat your extreme scenario above (which no matter which way I turned, I simply could not state yes, theres a risk there). How would you personally alienate that risk that you gave me.

Really2

Graham_Devon wrote: »

Yes I can see that problem.

But again, you are looking passed the whole salary multiplier that restricts that person and allows them to have fixed monthly, lower payments (only 3-4x the wage) which will allow them to save (if they wish), as their mortgage payment won't be crippling them.

If they lose their job, they lose their job, anyone can lose their job.

The point with this mortgage is that it has allowed them, if they so wish to, to have saved a pot of money. They have also put 2k in, which could be used to pay the mortgage for 3 months, they could have mortgage payment protection should they so wish (anyone can have this).

With lower monthly payments, because of the salary multiple restriction, they should have more left over, meaning they should have been able to plan ahead a little, like we all should.

Graham

So we restrict muliples so in reality people can prepare for the future! (Is that not what an afordability multiple does)

If they can't save a deposit it seems about a likely as the queen runing down the road naked with a dafodile held in the crack of her @ss that they will save for the future.:)



Face it Graham it's a duff idea.

Giving people a disposable income (doubt they would have a disposible income as they can't save a deposit) does not mean they will save.

Would you like to inforce a saving amount also?