Lloyd's TSB 'Lend a Hand' - New FTB 95% mortgage product

A_trifle_cheap

Yes, I'm seriously considering this mortgage and I only just joined the forum for this particular reason.

I went to Lloyds TSB yesterday for a mortgage approval in principle, but was told the interest on my lend a hand's money would be 4% on £25'000 equalling a £1'000 a year.

I'm just worried about how I can plan to "buy that share back" as the advisor put it. I've gone for a 30 year pay back and assume I either think about selling after the fixed period for a quick buck or squirrel away what I can until 2012.
Hope I'm not high jacking the thread by asking, but how would you pay it back?

Phill_555

A_trifle_cheap wrote: »

Yes, I'm seriously considering this mortgage and I only just joined the forum for this particular reason.

I went to Lloyds TSB yesterday for a mortgage approval in principle, but was told the interest on my lend a hand's money would be 4% on £25'000 equalling a £1'000 a year.

I'm just worried about how I can plan to "buy that share back" as the advisor put it. I've gone for a 30 year pay back and assume I either think about selling after the fixed period for a quick buck or squirrel away what I can until 2012.
Hope I'm not high jacking the thread by asking, but how would you pay it back?

I'm looking into the possibility of doing one of these with the aid of my parents. You don't have to pay your lenders back trifle, they just withdraw their savings, leaving you with what ever equity you have built up by 3.5 years worth of repayments and the amount your house has increased in value.

Sure, you will probably have a LTV % of above 75 but it should be lower than 90 (as I feel we are near or at the bottom of the market right now) and you will no longer be (penalised as) a FTBer, and your mortgage rate reverts to Lloyds' SVR.

lowtidesurf

Just went to get a lend a hand scheme from lloyds, Got accepted and a mortgage in principle. but then after making an offer they turned around and told us that on a new build property on any lloyds mortgage they would require a 20% deposit. They advertise that you only need a 5% deposit but its only on old houses. And they didnt know there products, Very unimpressed. Stay clear if you ask me

homehunter

Save up as much as you can and put down a nice big deposit - I hated the waiting but we've finally had an offer accepted on a house and are just going through the process as first time buyers. If your mum and dad are willing to loan you some money, then all the better, but I wouldn't tie it up in a bank in any way, it seems very complicated to me.

We saved £31500, and my mum and dad have loaned us a further £10k at a 'very reasonable interest rate' - meaning we can put down at least a 20% deposit with about £4k left over for all the fees etc. No stamp duty which helps a lot, I admit.

I never wanted to borrow from parents, but this economic climate has made it virtually impossible. Plus, the money being lent is not accruing interest so they felt it was just as well to use it to help us out, then have us pay it back gradually as savings rates improve. I wanted to own as much of the new house as possible, one reason being that I wanted to avoid negative equity (though I hope to stay in this house a long time!)

Good luck, we'll get there

digsy8

I applied for this mortgage yesterday, and even though I've got a 27590 salary, my parents offereing to put 20% into savings with Lloyds, a decent credit history ( a few grand on a credit card but paying it off and never missed a payment - I check my credit report regularly), but I got told i wasn't eligible for this type of mortgage, even though they initially approved my loan amount of £100,000 mortgage, the computer said no!

The mortgage advisor and the branch manager couldn't explain why I got rejected, as they thought I looked good on paper.... but suprise suprise they then offered me a 75% mortgage with a 5.29% interest rate! And asked if my parents would be willing to give me the 20% as a gift, which they can't afford to do.

I think it's ridiculous that a bank can't explain why you have been rejected for a certain type of mortgage but they offer you another one. To be honest I feel like it's a gimmick to get you in the door, and they probably only have a few of these mortgages available.

morg_monster

That's very interesting! We're going into our branch on Saturday to try and get an AIP for this product. It's ideal for us really. We have about a 12% deposit of our own and my parents have offered to loan us the rest. They are happy to loan us the money but like yours can't gift it outright which means we would have to factor into monthly payments back to dad into our budget.
So anyway this was a was a great option for us, not having to make a mortgage payment and a dad payment each month, I hope we have better luck than you (sorry!).
I wonder if they have a lower salary multiple with this product than with their other mortgages; i don't immediately see why they would though.

skiTTish

digsy8 wrote: »

I applied for this mortgage yesterday, and even though I've got a 27590 salary, my parents offereing to put 20% into savings with Lloyds, a decent credit history ( a few grand on a credit card but paying it off and never missed a payment - I check my credit report regularly), but I got told i wasn't eligible for this type of mortgage, even though they initially approved my loan amount of £100,000 mortgage, the computer said no!

The mortgage advisor and the branch manager couldn't explain why I got rejected, as they thought I looked good on paper.... but suprise suprise they then offered me a 75% mortgage with a 5.29% interest rate! And asked if my parents would be willing to give me the 20% as a gift, which they can't afford to do.

I think it's ridiculous that a bank can't explain why you have been rejected for a certain type of mortgage but they offer you another one. To be honest I feel like it's a gimmick to get you in the door, and they probably only have a few of these mortgages available.

The EXACT same thing happened to us ,we were given an AIP then 'oh surprise ,can you not get your parent to lend you the money because you have been turned down and we dont know why '
I told them yes but if we lent the money for the deposit then we would go elsewhere for the mortgage ..
The phone rang within 3 mins of me saying that and putting the phone down - suddenly the computer had said yes ,we could have the Lend-a -hand mortgage and they couldn't explain what happened ??!
Hmmmmm sounds like they are all trying to pull a fast one !!
I reckon there is probably more in it for the in house advisers ,in the way of commission ,if they flog the standard ,high deposit mortgage as opposed to the lend a hand product !
Everything has gone through now and we are now homeowners and making payments on our Lend a hand mortgage

Phill_555

Congrats SkiTTIsh! Seems worrying that they are trying to push people into their standard mortgages. These sorts of naughty practices are common-place when it comes to financial services products unfortunately :mad: with advisers out to line their own pockets or that of the company, to the expense of customers

leveller2911

People need to get some perspective here. Have some self respect and save a larger deposit.

House prices will NOT go up much if any in the next 3-5 years. The reason being banks are not gonna lend stupid ratios to earnings and as such FTB,s will need larger deposits.
Too many people seem to think they will "miss the boat" its rubbish if you look at the hard facts.
House prices were way over valued and there is a correction going on.They may go up 0.9% in October but i,ll bet that doesn't last.

Facts are: Banks won't lend stupid ratios, people are worried about jobs and taxes will rise so House values are Not gonna rise much at all, your not gonna miss the boat..................

Do it the old fashioned way, work hard and save a larger deposit....


EDIT: For the benefit of B0rker..........The above statement is my opinion and should be seen as such and No I don't have a crystal ball.

b0rker

leveller2911 doesn't know whether house prices will go up or down in the next 3-5 years any more than they know the lottery numbers for next weekend.

The facts are that house prices HAVE risen for the past 6 months in the UK.

leveller2911 does not own a crystal ball. The kind of crystal ball that would be required to come on a forum such as this and offer such definitive financial advice.

No one should really be predicting an entirely uncertain future with such certainty like that on here.

It is very very risky and potentially very very harmful.