New product to the market - possible help for people who cannot borrow enough?

siliconbits

Since the price of houses is going up always, then it might be a very good deal. Also, I assume that Morgan Stanley will grab a share of the equity only when you will remortgage or if you sell the house. BTW, I looked on their website and it seems that they are quite shy about it. Found no link re. flexishare. Anyone knows where I can find a phone number or a link.

Xbigman

siliconbits wrote:

Since the price of houses is going up always, ...

Dangerous assumption.
Regards




X

stphnstevey

Sounds like this is a Mortgage company blinding people with complex numbers in order for them to cash in on the house price rise by taking a % of your profit, with you taking all the risk. Great if your the Mortgage Company.

homer_j_3

in all fairness. This product is a unique one and doesnt sit agianst anything out there. It is not trying to compete with anything.

I think that if the situation is right (and that is the important part of this sentence) then this product could be a great help.

The product is unique and is only available through brokers due to the fact that it has to be recommended. It is not suitable for everybody and that is why they do not have a public website for people to view

nrsql

Not sure I get this
deposit = 5k (5%)
convetional mortgage = 80k (80%)
low fixed rate = 15k (15%)

200k -100k (difference between original value and current value) = 100k
100k x 15%(low fixed rate % of original value) = 15k
You owe the 15k

How is this different from shared equity except that you are paying interest on the shared bit for the privilege and can pretend that you own the property.
Wouldn't the company want a say in the sale price/deal too?
What happens if you add an extension/loft convertion/redecorate - do you have to pay for a before and after valuation or do you add a proportion of the costs to the shared bit?

But maybe you pay with a shared equity scheme too - never looked at the products.

jamesd

nrsql, you're right that it's like a shared equity deal except you're payinginterest on the equity portion you don't fully own (you do legally own it, but have an obligation to pay).

The company doesn't get a say in the sale price or deal.

Can make structural home improvements increasing value more than 10% and keep all the benefit, anything less or non-structural is part of the appreciation. Decided by valuation at sale time.

homer_j, when do you think that you might suggest this rather than interest-only or mixed interest-only and repayment? Trying to work out where it fits, if anywhere other than the scenario I described.

nrsql

>> Can make structural home improvements increasing value more than 10% and keep all the benefit

Does that mean the property has to be valued before and after the changes?

meanmachine_2

Ah, creative financing - the death rattle of any "boom".

I'm looking forward to the "shared organs" mortgage, which puts the "death" back into the original meaning of the word.

Your friendly high street lender gives you 12 times your salary, on the proviso that at year 10, 20 and 25 of the mortgage you "release" the equity in your body, such as a kidney, cornea and so on.

After all, those organs are just sitting there, why not "unlock" your body's value?

Thank you friendly high street lender. You're my friend.

siliconbits

I like those kinds of comparisons. Remind me of Bill Gates' restaurant and Tiscali's advert on Telly about all inclusive broadband

homer_j_3

jamesd wrote:

homer_j, when do you think that you might suggest this rather than interest-only or mixed interest-only and repayment? Trying to work out where it fits, if anywhere other than the scenario I described.

The only time I would recommend this prouct is if a borrower was not able to borrow the required money elsewhere.

The product is affordability based so it means that those people with debt cannot borrow as much due to the way it is calculated. It is also calculated on a repayment figure so you cant borrow more for going on interest only.

I havent sat down and worked it out fully yet but my initial thought would be that it is only worth going interest only on the convetional mortgage if there's affordability and sufficient money to save sufficient on the side to buy back the part that you are sharing your potential profit with. I guess this may work well with people who want to remortgage that have a lot of equity and other debts that are becoming unmanagable.

As I say, I have not had an opportunity to sit and think about it. Nor is it fair for me to try and catagorise scenarios of what the best advice would be in how to structure it. I would need to look at the circumstances in which I was making each recomendation.

My reason for this post was to get some feedback on what people thought about it and it has been interesting so far. Glad to see the positivity of mean machine lives on lol...:rotfl: