FSA review confirms NO RESTRICTIONS on Loan To Value/Income...

StevieJ

Cleaver wrote: »

True, but I would argue that it's irresponsible of banks to lend a 100% mortgage on the basis of "I've got a load of cash in a bank account if I need it, honestly guv." Even if you prove that you have that money at the time, what's to say that you don't buy a speedboat within two days of getting the house?

As I said, I can see the risks to the bank.

mbga9pgf

The FSA Can say whatever they like. All you need to do is look at current value mortgages and see what LTV you require see that the banks realise that they were D*ckheads during the boom.

Entertainer

HAMISH_MCTAVISH wrote: »

Ahhh, carol, so predictable.

I do hope you get past this bitter and angry phase soon.

Hopefully it's just the hormones talking, because I'd hate to see you getting desperate like all the bears over on hpc....

Terribly undignified.;)

And whilst I agree the stakes are high, as with most things in life, there are winners and losers, and the hpc junkie gamblers are the clear losers now.

The reality is a lot of people gambled on delaying purchase in the misguided hope of a big crash, when they should have been prudent and bought as young as possible back when mortgages were more affordable than today.

Prices fell, but most of these gamblers are now locked out of the market by high deposit requirements and high rates for FTB's.

Now both prices and rents are heading up, there is almost no prospect of any further meaningful falls, and the gamblers have lost.

By the time FTB rates and LTV's lower to where they were at back in 2007, prices will be massively higher again.

It's a lose/lose scenario for the reckless hpc junkies, who thought they could count on a crash to get a cheaper house at the expense of the prudent people who bought young and estabished themselves on the property ladder.

And after hearing endless posts from bears relishing in the prospective downfall of millions of decent people who just got on with life and bought a place to live, you'll just have to accept that we are more than entitled to feel a certain sense of schadenfreude about the whole thing. :rolleyes:

Tell me Mctavish, what is the limit to this lending? Would 7x salary LTI multiple be alright by you? Would house prices at 7x average earnings be fine?

If you keep nominal interest rates low enough everyone can have JulieQ mortgages and just juggle their debt and hope that inflation erodes some of it over 25 years. Where does it stop? Tell me.

Dan:_4

Cat695 wrote: »

Erm people you have got to agree this is surely a bad thing......mental just mental

This ain't bad or mental. It will help FTBers.

Entertainer

StevieJ wrote: »

Could someone explain to me why a 100% mortgage is (in principle) bad for the borrower (providing non-punitive rate) I can see the risks for the bank. If you had bought in 1995 with a 100% mortgage it would have been far less risky than 1997 with a 75% mortgage. BTW I had a 100% mortgage when I first bought a house and never noticed any problems.

I'm guessing you meant 2007. The biggest risk is the inflated price of the asset. If you bought in the mid 90's with a 100% mortgage the risk was very low to both you and the bank because house prices were so cheap. If the worst came to the worst and you lost your job, you could let it out at a 10%+ rental yield compared to interest rates of 6%. So yes, it's true, an 80% mortgage was a bigger risk in 2007.

abaxas

Dan: wrote: »

This ain't bad or mental. It will help FTBers.

!!!!!!!!!

Helping is does not mean the action is useful to society or in any way 'good'.

Dan:_4

abaxas wrote: »

!!!!!!!!!

Helping is does not mean the action is useful to society or in any way 'good'.

It dosen't matter what you think anyway. Salary mutiple lending was dead years ago. Affordability, debt to income ratio, credit history is what lenders are interested in these days.

carolt

Dan: wrote: »

This ain't bad or mental. It will help FTBers.

How are FTB's helped by rising prices?

Dan:_4

carolt wrote: »

How are FTB's helped by rising prices?

How will capping mortage lending at 3 or 3.5 times salary help FTB's?

baby_boomer

edgey88 wrote: »

Hooray common sense prevails

You mean that the government is happy to back anything - however foolish in the long term - that will prop up the housing market between now and the General Election, and damn the consequences .

BTW no-one particularly wants to help FTBs either before or after the election. They're young and they tend to vote less than homeowners.

Rising house prices = UK population feelgood factor = a major reason that New Labour won comfortably in 2005 in spite of the Iraq War and Student Fee legislation.

Gordon is desperate for a housing recovery he can point to as "evidence" of his successful stewardship of the economy (his only serious election card).
Cameron's main voters are already homeowners.