FTBs, make your voice heard. Would YOU prefer lower prices/rates/laxer mortgage rules

silvercar

DervProf wrote: »

I`m assuming that the potential FTB`er is currently living with parents (sorry, I should have made that clear). Before taking on the mortgage, the FTB`er will not be paying out £600 p/m, so will have that money to save.

I did, however, type "The extra 5K deposit would take 5000/600 months to save. That`s about 8 months."

I think that assumption is too big. A lot of FTBs are in private rented accommodation. This makes it particularly hard to save a decent sized deposit quickly.

Which is why I suspect that 90 and 95% mortgage would be popular among FTBs and the fact that the poll shows otherwise is due to the biased wording.

FTBFun

A return to lax mortgage lending?

I`m assuming that the potential FTB`er is currently living with parents (sorry, I should have made that clear).

Why are you assuming this? Because it helps fit your argument?

This entire thread really is ridiculous.

IveSeenTheLight

A return to lax mortgage lending?

DervProf wrote: »

I`m assuming that the potential FTB`er is currently living with parents (sorry, I should have made that clear). Before taking on the mortgage, the FTB`er will not be paying out £600 p/m, so will have that money to save.

I did, however, type "The extra 5K deposit would take 5000/600 months to save. That`s about 8 months."

Well that is a bit of an assumption, many FTBer wannabies aren't at home with the parents.
I suspect most are already renting properties.

DervProf

FTBFun wrote: »

Why are you assuming this? Because it helps fit your argument?

I`m not arguing. Simply making a suggestion.

It is hardly an unlikely scenario either.

Of course, if a potential FTB`er is currently renting, then saving the extra deposit is going to be more difficult, so will want the banks to be more lenient when it comes to deposit requirements.

Is that OK with you ?

MoneyMiser

A return to lax mortgage lending?

DervProf wrote: »

I`m assuming that the potential FTB`er is currently living with parents (sorry, I should have made that clear). Before taking on the mortgage, the FTB`er will not be paying out £600 p/m, so will have that money to save.

I did, however, type "The extra 5K deposit would take 5000/600 months to save. That`s about 8 months."

Thats the thing though, not every FTB is living with parents, some are renting so that extra 5% could take up to two years to save by which time, prices could have gone up.

Surely an influx of FTB's to the market NOW would stimulate the economy and stabalise house prices, eventually pushing them up?

MM

DervProf

IveSeenTheLight wrote: »

Well that is a bit of an assumption, many FTBer wannabies aren't at home with the parents.
I suspect most are already renting properties.

You have completey torn apart my suggestion. I now realise that it was completely ridiculous for me to make the suggestion that the FTB`er "wannabe" (your use of the word sounds a little patronising, if you don`t mind me saying) might want to save for a little longer to meet the deposit requirements.

I think it`s likely that a lot of potential FTB`ers who really are serious about buying their first home are living with their parents (or with "mummy and daddy" as another patronising forum member put it the other day) at the moment. A potential FTB`er who is renting will surely have less to save for a deposit, hence the call for lower deposits.

DervProf

MoneyMiser wrote: »

Surely an influx of FTB's to the market NOW would stimulate the economy and stabalise house prices, eventually pushing them up?
MM

If & when prices go up, how are future FTB`ers going to fare ? Even more lax lending conditions ?

I suggest that deposit requirements/ salary multiples etc should not be adjusted to suit the market, the market should adjust to suit the lending conditions.

MoneyMiser

A return to lax mortgage lending?

Personally, I think house prices are affordable now and a further crash would not only be a disaster for the economy but would push potential FTB's further out of the market, as lending criteria is made even stricter and even the 90% mortgages are scrapped.

I am NOT looking for my first home to be my dream home, I am merely looking at getting on the ladder, so will not be stretching myself financially. I am looking at the lower end of the market so the difference in repayments between a 90% and 95% are minor. After the fixed period has ended, whats stopping FTB's getting a better deal, or even having enough equity/deposit to be able to afford their dream home.

MM

MoneyMiser

A return to lax mortgage lending?

DervProf wrote: »

If & when prices go up, how are future FTB`ers going to fare ? Even more lax lending conditions ?

I suggest that deposit requirements/ salary multiples etc should not be adjusted to suit the market, the market should adjust to suit the lending conditions.

I think a 5% deposit is within reach for most FTB's so there should be more 95% mortgages on the market now AND if/when house prices increase. Obviously, this is the limit as even I don't want to see a return of the 100% - 125% mortgages.

The difference between a 5% and a 10% deposit can be too much for a lot of people and the difference in rate you get is hardly anything. For expample:

Yorkshire Bank offer a 95% LTV with a 3 year fixed rate of 6.99%

Natwest offer a 90% LTV with a 5 year fixed rate of 6.89%

I know which one I would rather go for.

MM

DervProf

Having seen the kind of "creative" mortgage deals that were available pre 2007, I feel a little more comfortable with the banks requiring a resonable (10%) deposit, than if they were requiring less, or even no deposit.

I managed to save a decent deposit (15%) by the age of 26 to buy my first home. I think it`s a sensible thing to do. It takes a bit of financial discipline to save a reasonable sum of money, and a lender should only be lending to people with financial discipline if they are being responsible.