Keep 100% mortgages?

Graham_Devon

Really2 wrote: »

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?

Again, extremes.

I have already stated a lot of people already pay their rent bang on and never miss a payment, just can't save up say 20k (its a huge amount) while renting and paying out to live and eat.

Having a fixed rate means they pay (for instance) £500 per month. As with EVERY mortgage, that £500 gets less and less each year, due to wage inflation. This in turn, makes them better and better off each year.

This in turn, like with any mortgage, means they are paying less in relative terms than when they started the mortgage.

Maybe it is duff. But with the extremes given as examples by yourself, every mortgage, every personal loan would be duff.

It seems to me you are making out that anyone who takes such a mortgage would be an incompetent fool not able to manage themselves. Yet these people are managing themselves fine now in rentals. Again, it's an extreme you are applying, and I'm not sure why?

JonnyBravo

Graham_Devon wrote: »

Again, extremes.

I have already stated a lot of people already pay their rent bang on and never miss a payment, just can't save up say 20k (its a huge amount) while renting and paying out to live and eat.

Having a fixed rate means they pay (for instance) £500 per month. As with EVERY mortgage, that £500 gets less and less each year, due to wage inflation. This in turn, makes them better and better off each year.

This in turn, like with any mortgage, means they are paying less in relative terms than when they started the mortgage.

Maybe it is duff. But with the extremes given as examples by yourself, every mortgage, every personal loan would be duff.

It seems to me you are making out that anyone who takes such a mortgage would be an incompetent fool not able to manage themselves. Yet these people are managing themselves fine now in rentals. Again, it's an extreme you are applying, and I'm not sure why?

But you too are applying an extreme by talking about all these people who can't save.
Where were they in the past? Answer - They knew there was no alternative and lo and behold they manged to save. What has actually happened is too many people have got used to not having to save and are now caught out that they need to go back to a frugal lifestyle to save up for a deposit.

Tough. It's sensible and about time we returned to it.

Really2

Graham_Devon wrote: »

It seems to me you are making out that anyone who takes such a mortgage would be an incompetent fool not able to manage themselves. Yet these people are managing themselves fine now in rentals. Again, it's an extreme you are applying, and I'm not sure why?

I am not saying they are fools I am saying if they can't afford to save for a deposit they can not afford to buy a house.

Buying a house should be more expensive than renting, you are paying for a rent free retirement.

Sorry it's harsh but some will never be able to afford to buy a house never mind the multiple.

It was homes for all at what ever your wage at 100% that started all this off.

Graham_Devon

Stupid proposals then.

JonnyBravo

Graham_Devon wrote: »

Stupid proposals then.

:rotfl:


Good man

Really2

Graham_Devon wrote: »

Stupid proposals then.

I don't know mate it is more than the FSA have done in the last 7 years:)

I think if you tweeked it for deposit and multiple.

5% = 3X Salary (2.5X joint)
10% = 3.5 X Salary (3X Joint)
25% = 4 X Salray (3.5 X Joint)
50% = 4.5 X Salary (4 X Joint)

But as ever I would say you would still need stringent afordability tests. The above are pointless if they have a mountain of personal debt.

You have to start somewhere but I do not think 100% was the right starting point:)

Graham_Devon

I was looking for input, not to just be told it's duff really, but can't really be bothered anymore, it's gone too far.

We all seem to just be bickering, yesterday I was wronged by the same people for saying people should save deposits if they want more than the 3.5x income the FSA may have imposed, and told I was stupid. Today told it's stupid this way.

I'm not quite sure what people want, which is why i came up with this and looked for suggestions.

I really would like to discuss, from a middle of the road starting point, which is why I asked for your input on the examples you were giving me, but it seems it's easier to just back down (this ins't a pop!!!) and I'm still learning about this board!

But I really am left wondering how I can be wrong every which way I turn with the same people using extremes to prove I'm wrong.

Just the other day, I was told my sugestion was wrong as house prices only had another 5% to fall and they were bottoming out. Today I'm wrong (by the same people) based on examples of house prices falling much further, or indeed, just falling in a couple of decades!

Everyone can be wrong if people consistently change the goal posts to use any factor to prove you are wrong, but that doesnt really help anything.

I guess what we have achieved, is found that no product will suit everyone and no mortgage product has 0% risk.

Really2

No one as said you are stupid.

What have I wrote above.

I think the point is on extremes graham, once extremes are accepted they can become norms.

So when planing something which as gone so wrong you have to plan for the extremes.
In the end of the day sub-prim lending was an extreme 4 years ago.

chucky

Really2 wrote: »

I don't know mate it is more than the FSA have done in the last 7 years:)

I think if you tweeked it for deposit and multiple.

5% = 3X Salary (2.5X joint)
10% = 3.5 X Salary (3X Joint)
25% = 4 X Salray (3.5 X Joint)
50% = 4.5 X Salary (4 X Joint)

But as ever I would say you would still need stringent afordability tests. The above are pointless if they have a mountain of personal debt.

halifax sort of do something like this, found out from a recent appplication
They credit score you first then their is a correlation between your LTV and the amount they lend.
For example an A credit score could give you 4.8 X salary at 50%/60% - i went for 3.8.

Really2

chucky wrote: »

halifax sort of do something like this, found out from a recent appplication
They credit score you first then their is a correlation between your LTV and the amount they lend.
For example an A credit score could give you 4.8 X salary at 50%/60% - i went for 3.8.

I think that is fairly sound because I think

1) The borrow should be able to decided a certain amount of their own risk (A bank will not know your future worth but you may)
2) A bank should always cover there risk. So a 4.5X salary may be a risky multiple lending only 50% of the asset value disolves the risk to the bank.