Telegraph: Bring Back 100% Mortgages--Best Way to Wealth

Jonbvn

Yet more discrimination as "FIRST-TIME BUYERS 'EXCLUDED FROM FERRARI MARKET"

"The government really has to get to grips with this," said a BRIFOC spokesman. "Why should hard working young people be denied such an extravagant status symbol? Owning a brand new Ferrari is a right, not a priviledge."

chucky

Generali wrote: »

I'd be perfectly happy to see 100% mortgages offered by any bank which didn't have an implicit or explicit Government guarantee, that is to say they and their creditors take on 100% of the risk.

If you want a Government underwriting of the system then buyers should bring something to the table, say a 5% deposit with MIG or 20% without.

i've never seen a problem with 100% mortgages however i see the problem of the quality of the underwriting of these mortgages

blueboy43

HAMISH_MCTAVISH wrote: »

And so it begins.....

Mark my words, the backlash against discriminatory lending practices requiring stupidly high deposits that only the rich can afford, and blocking access to homeownership for the masses, is going to get ever louder.

The Personal Finance Editor of the Torygraph states it clearly, and no doubt Conservative HQ is listening closely. I would be amazed if we don't see 100% mortgages return with acceptable rates within the lifetime of this next parliament.

We are not a nation of renters, by choice. The UK mentality is to buy, buy, buy, and this will never change. Anyone dreaming of the Tories making lending harder, or raising the costs of ownership, or in any way discouraging HPI, is going to be very disappointed indeed.

When the BoE "mortgage special liquidity scheme" ends in January 2011 where is the money for lending going to come from ?

Its only £185 billion, perhaps the tax payer could chip in.

Generali

chucky wrote: »

i've never seen a problem with 100% mortgages however i see the problem of the quality of the underwriting of these mortgages

If you need a 100% mortgage then you're likely to be a pretty marginal borrower.

Also you're likely to be young and maybe a little naive so perhaps overpaying for the property (and property valuation for mortgage lending purposes seems to be an inexact science).

If you have some money in the deal it sharpens the mind, demonstrates solvency and reduces lender's risk.

DaddyBear

Generali wrote: »

If you need a 100% mortgage then you're likely to be a pretty marginal borrower.

Also you're likely to be young and maybe a little naive so perhaps overpaying for the property (and property valuation for mortgage lending purposes seems to be an inexact science).

If you have some money in the deal it sharpens the mind, demonstrates solvency and reduces lender's risk.

Nail on the head.

Unfortunately in Labour's new Britian moral hazard has gone out of the window.

Everyone must have the what they want today even if they can't afford it tomorrow. It's the right thing to do.

abaxas

[QUOTE=DaddyBear;30229111_It's_the_right_thing_to_do.[/QUOTE]

* for hardworking families

chucky

Generali wrote: »

If you need a 100% mortgage then you're likely to be a pretty marginal borrower.

Also you're likely to be young and maybe a little naive so perhaps overpaying for the property (and property valuation for mortgage lending purposes seems to be an inexact science).

If you have some money in the deal it sharpens the mind, demonstrates solvency and reduces lender's risk.

to add to that - 100% mortgages are 'good' for people who are starting off in their careers and will be progressively earning more money in the future.

so for example in year 1 the mortgage may be 50% of income but by year 5 it could be 25%.

they would probably suit a graduate for example

Charterhouse

chucky wrote: »

i've never seen a problem with 100% mortgages however i see the problem of the quality of the underwriting of these mortgages

Err that is the problem. The problem of the quality of the underwriting is the LTV. Good underwriting = low LTV.

Do you have any idea how exotic the risk profile of a 100% LTV interest only mortgage is?

chucky

Charterhouse wrote: »

Err that is the problem. The problem of the quality of the underwriting is the LTV. Good underwriting = low LTV.

Do you have any idea how exotic the risk profile of a 100% LTV interest only mortgage is?

maybe before the Battle of Agincourt it did but times have moved since then - we're in 2010 now

don't you think that mortgage underwriting is determind by affordability, credit history, other debt commitments and even work experience too?

Charterhouse

chucky wrote: »

maybe before the Battle of Agincourt it did but times have moved since then - we're in 2010 now

don't you think that affordability has anything to do with it?

If your affordability is that great, use it to save a deposit. It's not complicated is it? If you can apparently afford a 500k mortgage then you can rustle up a 10% deposit in no time at all...