Nationwide to Offer 125% Mortgages

Generali

Graham_Devon wrote: »

Lets not forget. It makes no difference to Nationwide whether their customer has 20k debt via negative equity on House A or 20k extra owed to them on House B.

All they are doing, is making more money from the negative equity, by turning it into a debt, and then charging a higher rate for the privilege, but also, getting them to borrow 160k again (for example).

Currently, Nationwide cannot make money on that 20k negative equity. If they swallow it on behalf of their existing customer, it turns a non income generating 20k negative equity hole into a debt which they can charge on.

If they default, it makes no difference to nationwide which way they default, as nationwide would still be 20k down either way. So nice little money earner for Nationwide.

Actually it's better than that for Nationwide - they make customers put extra cash into the deal if they want to move and get to charge a higher interest rate.

System

Graham_Devon wrote: »

Do what again?

Not sure if you are picking up my back of a fag packet type examples and seriously want me to sit here working out interest, 5% deposit, moving fee's etc, JUST to make an example?

If that's what your trying to tell me I should do if I want to back up the sound reasoning for a product, forget it!

What on EARTH is wrong with you bulls lately? Back up a product that you are also saying is good and you STILL need to find something to thank each other about.

:rotfl:You really are becoming a bitter little individual, I was responding to GG's proper example but it appears your post appeared at the same time, so why don't you put your toys away and pop that dummy back in

Nice rant though.

Edit: I've edited GG's post in for you. You can apologise some other time.

Graham_Devon

Generali wrote: »

Actually it's better than that for Nationwide - they make customers put extra cash into the deal if they want to move and get to charge a higher interest rate.

Yer, and what I didn't mention is they now get to loan on the new home, with a 5% buffer before that person is back in Neg Eq.

Joeskeppi wrote: »

:rotfl:You really are becoming a bitter little individual, I was responding to GG's proper example but it appears your post appeared at the same time, so why don't you put your toys away and pop that dummy back in

Nice rant though.

Edit: I've edited GG's post in for you. You can apologise some other time.

Poop! Ok, fair enough, I apologise....and not even begrudgingly

System

Graham_Devon wrote: »

Poop! Ok, fair enough, I apologise....and not even begrudgingly

Aww come on, I've got a whole afternoon to kill while some reports run, post some abuse back or something!

Graham_Devon

LOL when wrong, I'll admit I'm wrong

Harry_Powell

Graham_Devon wrote: »

LOL when wrong, I'll admit I'm wrong

You must do a lot of 'admitting'

LittleMissAspie

It's a good idea. After all, it doesn't matter to the bank, or the economy, or the mortgage-owner which house they owe the money on.

It also said on the BBC that Nationwide would do a test to see if the customer could still afford the loan at rates of up to 10%. Very sensible. Should happen for ALL mortgages.

Graham_Devon

Harry_Powell wrote: »

You must do a lot of 'admitting'

LOL. I won't admit I'm wrong when things are spun, which is usually the case

Cat695

Generali wrote: »

Actually it's better than that for Nationwide - they make customers put extra cash into the deal if they want to move and get to charge a higher interest rate.

#

So in simple terms this is for really stupid people thinking they are getting a good deal....because no one has to actually move house....I mean its unlikely you will die if you don't move house because of space

I can understand for a Job but unless there is a very good reason I think you would be very foolish to take on this amount of debt just because you want/need more space bigger garden....garage etc.

Thrugelmir

Heyman wrote: »

But the rate on the deal is about 7-8% which is very much at the upper-end of current Mortgage rates. So it's likely that the person in question would be paying a lot more each month even if they didn't take any more debt.

Not surprised that they don't expect a lot of take-up on this deal.

What's the alternative?

They could sell the house and rent. But would still be left with a debt to repay?

Maybe will also focus people into making every effort to pay down their debt.