100% Mortgages

SplanK

i am saying yes.... as the problem was not with 100% mortgages themselves... it was the high LTV mortgages with lending to people with no so great credit ratings that caused issues when things went south. As long as banks remember this then it should not be a problem... for people with iffy credit ratings - then they should have a lower LTV!

AbbieCadabra

friend of mine recently completed on a new house that had a 100% mortgage arranged via the builders with yorkshire bank. they reserved the property last July & moved in in Feb, the 100% offer was withdrawn before they all sold but i can't remember when.

i don't know whether to class them as 'lucky' or not in getting a 100% mortgage?! i can't see them ever getting their money back on the property as it's in a bit of a rough area, but what do i know!

Homersimpson

The 100% mortgage was and always will be a bad idea. The banks take money borrowed from other banks and from depositors and lend it out on a house where they would not recover there money if they had to reposess and sell quickly. Thats a bad business plan in anyones book unless you can acurately predict the market - which we can all now see that they can't given the current situation.

If you can't even save up 5% of your house purchase then why should the banks take the risk (or in deed the tax payer as we will be the ones bailing the economy out again).

Sorry if it sounds harsh and i'm not trying to offend anyone honestly but you would have to be a complete idiot to think that 100% mortgages would ever be a good idea for the economy as a whole.

Raggs_2

Although I'd love the idea of getting a 100% mortgage when I look to buy a house, I can see that they are a bad idea for the most part. The deposit is more than just a safety net for the bank if it all goes tits up straight away, it's also an indication that you have access to money from non-credit sources, which with all the extra bills associated with owning a house as opposed to renting, is a very good sign.

If achieved through savings, it also suggests that you may have some sort of contingency plan if you lose your job or similar. And over a 25-30 year period, it's only reasonable to assume that some period of unemployment may occur.

I'd love it if I could get one (assuming within affordability), but dislike the idea in general, and feel making even a 5% deposit necessary serves many purposes.

laurel7172

Having got deeply into negative equity with a 100% mortgage in 1989, I do feel as if I've pretty much seen it all before.

And if we didn't learn then, why would we learn now?

bodgerx

laurel7172 wrote: »

Having got deeply into negative equity with a 100% mortgage in 1989, I do feel as if I've pretty much seen it all before.

And if we didn't learn then, why would we learn now?

As far as legislation goes, I think a law which states limits on income multiples should come in soon. Say 4x 1st applicant + 1.5x 2nd max.

Homersimpson

bodgerx wrote: »

As far as legislation goes, I think a law which states limits on income multiples should come in soon. Say 4x 1st applicant + 1.5x 2nd max.

I completely agree that they should set limits but I know that they wont as it will limit house price inflation and may cause a drop in the short term.

On this basis a single person on 30k would be able to borrow 120k + a 10% deposit would give a maximum of 132k. Around by me that won't by a nice three bed semi and you would struggle with a two bed in a nice area.

iB1

They will be back - we never learn.

I reckon that we'll have general availability of 95% mortgages by 2012 and 100% mortgages by 2017.

Just a complete guess. I'll check back in 7 years to see if I'm right :rotfl:

weehev

i think they should return to 95%, therefore it gives ftb's and those wanting to move more of a chance. i got my first mortgage in 2007 - it was 101%!!! just before the market crashed, now before people judge me, i had £10,000 deposit, however the house needed renovated and the advisor told me to use the money for that instead. fortunately my partner and I have secure jobs!

poppysarah

new_home_owner wrote: »

If your in a steady job with a stable income and can afford the repayments then its not a problem,

Learning to save up for things really should be a part of any big financial decision. Rushing in because you can is often a BAD idea.

Save. It doesn't physically hurt.