FSA Rejects LTV/LTI Mortgage Caps......

NeilYoung

Won't this lead to more people lying on their mortgage application?

Banks can't verify someone's disposable income, there's nothing to stop people lying about how much the spend on food, drink, clothes, gadgets etc. thus giving a false disposable income.

Or maybe that's what the banks want...

HAMISH_MCTAVISH

NeilYoung wrote: »

Won't this lead to more people lying on their mortgage application?

Banks can't verify someone's disposable income, there's nothing to stop people lying about how much the spend on food, drink, clothes, gadgets etc. thus giving a false disposable income.

Or maybe that's what the banks want...

And that, Ladies and Gentlemen, was the sound of a penny dropping....;)

skap7309

HAMISH_MCTAVISH wrote: »

Game on.

That was the last great hope of the bears.

Ermmmm. No not really. I for one knew the above was not possible and never gave it a thought. Plently more things that can keep prices going down for years to come.

1) Mortgage starvation - in Aug 07 FTBers had a choice of 20,000 loans, this figure is now 1195. For re-mortgaging - 30,000, now 2283.
2) IRs will have to go up eventually, if rates are alredy at over 5% fixed on a 0.5% rate - what will happen in the future?
3) The deadly combination of pay cuts, job losses and rising taxation means people wont have a great deal left at the end of the month to pay a mammoth mortgage.

I'll stick with these as good enough reasons to be confident a 'massive' boom will not return for possibly decades. The banks have had a serious scare and they are still very worried about lending to a large majority.

skap7309

ad9898 wrote: »

On the flip side and having read many of the OP's posts on HPC he's just the sort of person that you wouldn't pi$$ on if they were on fire. If this is the way board is going to end up, with the reject trolls from HPC then it will sink out of sight.

I have noticed these types come and go - i really think behind the mask is the type of person who feature on 'Property Snakes and Ladders' shows. Thought they could make a fast buck and jumped on the BTL waggon FAR too late / bought what they thought was a bargain at the height of the boom / got sucked into the media bullsh*t and bought recently thinking it was the shortest crash in history, after the biggest boom in history.

Green, envy and jealousy are suitable words that spring to mind.

IveSeenTheLight

skap7309 wrote: »

2) IRs will have to go up eventually, if rates are alredy at over 5% fixed on a 0.5% rate - what will happen in the future?

as the gap grew between IR and fixed rates as they fell, it is likely they will close again as rates rise.

As an example, will a lender be competative if BoE base rates are 6% and the lenders fixed rates are 11%?

The lenders have increased fixed rates because we all know they will rise, probably to around their long term average of 5-6%

It really would be foolish for lendersto offer very low fixed rates, when we all know come time IR's will rise.

HAMISH_MCTAVISH

IveSeenTheLight wrote: »

as the gap grew between IR and fixed rates as they fell, it is likely they will close again as rates rise.

As an example, will a lender be competative if BoE base rates are 6% and the lenders fixed rates are 11%?

The lenders have increased fixed rates because we all know they will rise, probably to around their long term average of 5-6%

It really would be foolish for lendersto offer very low fixed rates, when we all know come time IR's will rise.

Bank margins will decrease as base rates rise. The only way base rates will rise is if the economy recovers. The only way that will happen is when more normal lending resumes. And the resumption of more normal lending will spur competition in the market, reducing margins.

Simples.

Graham_Devon

HAMISH_MCTAVISH wrote: »

And that, Ladies and Gentlemen, was the sound of a penny dropping....;)

Was it?

Oh, it's just when you said about the last great hope of the bears, I didnt realise you were talking about an increase of people lying on the application!

I thought you simply had got yourself way to excited about the LTV mortgage stuff without thinking of the consequences.

wolvoman

HAMISH_MCTAVISH wrote: »

Bank margins will decrease as base rates rise. The only way base rates will rise is if the economy recovers. The only way that will happen is when more normal lending resumes. And the resumption of more normal lending will spur competition in the market, reducing margins.

Simples.

Amongst all the other guff you've spouted, that is actually a pretty accurate statement.

kingkano

NeilYoung wrote: »

Won't this lead to more people lying on their mortgage application?

Banks can't verify someone's disposable income, there's nothing to stop people lying about how much the spend on food, drink, clothes, gadgets etc. thus giving a false disposable income.

Or maybe that's what the banks want...

This would be true if only they asked you and used your figures for affordability. Mostly they seem to have their own figures for cost of living which actually sucks if you're really a MSE and don't spend ridiculous money on stuff you don't need. Because their affordability figures will still say you do

I most definitely prefer affordability to 'income multiples'. But it does need to be more stringent than it has in the past I guess.

digipeep

Ah I see the HPC troll Hamish has found his/her way to MSE.