Abbey - 5 times joint salary?

Alan_M_2

AndrewSmith wrote:

£1000 per month 25 year mortgage as opposed to a 3 year £2000 finance deal on a used car.

They are two completely different things and cannot be compared against each other as there is a vast difference in the underwriting for each.

The lender does not have to give you a reason for declining a mortgage application, nor does it have to explain why it is prepared to offer the loan amount you ask for.

They have no obligation to lend anybody anything at all and, as such, do not have to give you an explanation.

You asked for their help, they offered it. Simple.

It's not as if they would have forced £80,000 on you if you didn't ask for it now is it?

Well actually it was a new car but that's besides the point.

The bank stated I couldn't afford a £1000 a month for a mortgage, yet a few weeks later said I could afford £2000 a month to buy a car if I wanted (which I didn't) - but like you say they need no rhyme or reason to lend or not to lend do they.

When I asked if I can afford £2000 a month for a car how come I can't afford £1000 a month for a house instead they were unable to answer....anyhow like I said this was 4/5 years ago, they're now falling over themselves to give me a mortgage and I don't want one, I'm expanding my business instead and moving into a new warehouse.

Oh and if you think residential property has gone through the roof you ought to take a look at commercial, it makes doemstic housing pale in comparison.

lynzpower

Alan M

Especially as a house is likely to have a better resale value than a car which will lose a massive proportion of its value as soon as its driven off the forecourt.

As I understand your point Alan, its the lack of transparency in the decision making thats the issue here. Personally, I think ALL consumers would benefit from clearer understanding on why & wherefores of thier creditworthiness, regardless of whether it would ever be a "good idea" to buy the place/ car/ or not.

HAve I got that right?

mystic_trev

martyn4764 wrote:

Update: that was an error apparently... it's a 3% deposit!

http://today.reuters.co.uk/news/articlenews.aspx?type=topNews&storyID=2006-11-01T120315Z_01_L01480559_RTRUKOC_0_UK-FINANCIAL-BRITAIN-ABBEY.xml

I thought the 3% was another mistake, as the New channels, BBC and Sky were still running with the 25% deposit. However - further research has shown that this is the case. 3% deposit and 5X This is madness!

Alan_M_2

Absolutely what I was getting at, I couldn't understand how they accept one but not the other, it simply made no sense especially as the one they rejected was secured and an investment, and I couldn't get a straight explanation as to why.

Anyhow, I've got so sick of them I'm about to move banks, business account, card processing the lot, the service has become apalling, they are difficult to deal with and I really can't stand dealing with Bombay any longer. bye bye HSBC (and I've banked with them for 20 years)

whambamboo

mystic_trev wrote:

I thought the 3% was another mistake, as the New channels, BBC and Sky were still running with the 25% deposit. However - further research has shown that this is the case. 3% deposit and 5X This is madness!

sorry you're wrong. 5*and 10% deposit, or 4.6* and 3%.

lynzpower

i wonder if abbey even know themselves??!!

regularsaver1

I doubt this is a new thing - and I doubt its not just abbey either

http://www.thisismoney.co.uk/mortgages/mortgages/article.html?in_article_id=414255&in_page_id=58&ct=5

FROM ARTICLE:

" This is Money and Financial Mail reported back in July how Morgan Stanley was offering couples six times their joint salaries, despite the fact that they may have defaulted on debts in the past. And last week, Bank of Ireland Mortgages and Bristol & West increased the amount they would lend to borrowers from four times salary to four and a half.

Royal Bank of Scotland and Cheltenham & Gloucester are also willing to lend at five-times salary. But the offer is only made to the right customers - those with a high income, large deposit and a clean credit history.

Some lenders go even higher - Northern Rock said its maximum loan was 5.9 times salary, but added that it rarely allows borrowers to stretch that far.

Abbey sought to clarify their position this afternoon. They said the offer would only be available to couples who could pay a 3% deposit and had a combined income of £60,000. "

mr.broderick

All the other major players will now follow suit and property prices will go higher....

tomstickland

You might be surprised, but the "house price crash 3" thread has some interesting points on this. About market share etc. So the banks are all going to chase the market share at high multiples. I can't see this sustaining itself.
I shall watch with interest.

mystic_trev

whambamboo wrote:

sorry you're wrong. 5*and 10% deposit, or 4.6* and 3%.

Agreed - I'd missed your previous posting, which was most informative - thanks.