How long/why now at least 25% deposit to get a mortgage???

djbreeze

Hi,
Does anyone have any clue as to how long it will be before mortgages of greater than 75% LTV become available again? Is the fact that you need at least 25% deposit due (partly) to an expectation that there will be further falls in house prices, or at least a move on the part of lenders to cover themselves in the event of (further) falls in house prices? Why don't "they" want us to have mortgages/buy property right now? They must all be in cahoots because if A lender offered mortgages of, say, 85 or 90% LTV, surely they'd get lots of business, quickly, wouldn't they? Or is it as simple as none of the lenders have got any money to lend? I'm confused...

Thanks for any advice/opinions/clarification of how all this works (or not...:)),
David.

LilacPixie

alot of mainstream lenders do offer 85 and 90% ltv...

somethingcorporate

LilacPixie wrote: »

alot of mainstream lenders do offer 85 and 90% ltv...

What LP said!

You cannot be looking very hard if you don't think there are any 90% LTV mortgages.

They may not be as competitively rated compared to the 75% LTV products but it reflects an increased risk on the part of the bank.

Thrugelmir

To lend, banks need deposits. There's already insufficent funding to support current outstanding mortgage debt. So a correction is very slowly taking place.

opinions4u

djbreeze wrote: »

Does anyone have any clue as to how long it will be before mortgages of greater than 75% LTV become available again?

Most lenders will go up to 85%. Some 90%. A handful 95%.

Is the fact that you need at least 25% deposit due (partly) to an expectation that there will be further falls in house prices, or at least a move on the part of lenders to cover themselves in the event of (further) falls in house prices?

In part. Falling asset values are a major threat to any mortgage lender.

Why don't "they" want us to have mortgages/buy property right now?

Google "Credit Crunch". In short, the big wholesale lenders who used to fund the banks don't want to give them any more money. This means fewer mortgages available.

They must all be in cahoots because if A lender offered mortgages of, say, 85 or 90% LTV, surely they'd get lots of business, quickly, wouldn't they?

Yes. But the riskier the loan, the more capital they have to set aside and the less profit they can make.

Or is it as simple as none of the lenders have got any money to lend?

Funds are limited. So they cherry pick the best customers to lend to.

firstaspect

I recently got an 85% mortgage from a high street lender. Was plenty of others around too.

riverboat2001

Post Office up to 90%

Conrad

The OP must realise lenders do 90% but he has been told 75% for a specific reason, which might relate to income proof, credit or another issue.

To answer his/her question; Lenders obtain the money they lend, from other people - investors. Those investors do not want risk in the current climate. Secondly, the Governments mortgage regulator (The FSA) have put in place rules that make lending much more difficlut - this is because the Government responded to the credit crunch with tighter rules to try and calm the markets and ensure we don't get another credit crunch.

Thirdly lenders are exposed to overseas poorly performing mortgages in places like America where negative equity is absolutely vast. If you like, they have money p11ssing away through na gaping leak and as such cannot lend much as a result.

Wait a few years and things will ease though, they always do. How many years - no bondy knows.

Thrugelmir

opinions4u wrote: »

Yes. But the riskier the loan, the more capital they have to set aside and the less profit they can make.

Spot on. Since January 2008 lenders have been required to hold more in capital reserves for every £1 lent above 75% LTV.

A subtle change but nevertheless has impacted the higher LTV lenders market. As the actual funds committed have fallen. So the products are there (good for media headlines) but are less obtainable.