'Are mortgages & credit too easily available or too hard to get?' poll discussion

Former_MSE_Lawrence

Poll started 18 January 2011:

Are mortgages & credit too easily available or too hard to get?

We've had a credit crunch which means credit scoring's got tougher and mortgages, credit cards and loans are harder to get especially at cheap rates. Yet a chunk of the blame of the economic crisis that caused the crunch was over-lending to people who couldn’t repay.

Which of these stark choices is closest to your view on the availability of credit?

It needs to be easier to get cheaper borrowing
It's roughly about right now
Cheap borrowing is too easily available

Please vote here or click 'post reply' to discuss below. Thanks

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MSE_Martin

Im fascinated by this poll - I vascillated myself on what to answer - so it'll be really interesting to see how it turns out.

Angel_Jenny

I think it depends what you want. I couldn't get a mortgage on my wage that was enough to actually buy a house but could have just over a year ago. At the same time the bank offers me either a loan, a credit card or an overdraft every time I go in.

MothballsWallet

MSE_Martin wrote: »

Im fascinated by this poll - I vascillated myself on what to answer - so it'll be really interesting to see how it turns out.

Do you mean this?

To answer the question, I've probably missed out on some of your recommended low interest rate deals because I'm not on a great salary right now (temping isn't good for your bank balance, I'll tell you that), and some of the providers you mention have minimum income limits on their deals.

Fingers crossed that employment status will change soon

udydudy

I did vascillate as well, because it depends on which view point you look at it from. Personally I believe cheap borrowing should be available and lending criteria should be lenient. The bankers job is to assess risk and if a person has shown responsible borrowing then lending should be easily available to such people.

The other view point would be that cheap lending helps people get into debt. but then is that a bankers responsibility?? Should it not b ethe consumers responsibility. I see no reason why a person who is paying say £1400 as rent(london rents) for a 3 bed house on his current salary, even if it is 60% of his or her net salary,should not be able to borrow as much as would allow him to buy his or her own house.

This would assist in a sort of forced saving as an asset is being created. Obviously if the person is paying rent then he/she can afford to pay a similar amount in mortgage.

Why should a responsible borrower suffer for the mistakes/carelessness of the few irresponsible ones?

misssammyantha

My parter and I found it very easy to get a mortgage promise when we were enquiring last year. It's the deposit which is harder to get together. But to quote the lender who we got our mortgage promise through "it's more difficult to open a current account than it is to get a mortgage". So maybe lending is still too easy.

babybutton666

being a student i find it an absolute nightmare to get credit anywhere - the conditions of most store cards etc are no unemployed and no students - although in places it pays to have a store card as it works like a loyalty card (like in bhs) - so as i shop there often i feel like im being ripped off and excluded from their "club" because i dont qualify. Then you have credit cards and airmiles - while others enjoy these benefits i'm once again excluded. Then it comes to christmas - i have kids so when the student loan runs dry at the start of december and get no more until mid january it would be handy to use the plastic and pay it off in january but i can't do that. 15 years ago, unemployed no previous job on income support i could get any credit card i wanted but times have changed! now i cant even apply for one let alone be turned down for one!
Tried to buy something in currys a few years back and couldn;t get store credit due to the no income from a job but because i cant get credit now (i cut up my credit card about 9 years ago when they decided to start charging me £35 a year because i wasn;t using it) then when it comes to getting credit after i qualify then it will be more dfficult as i do not have any kind of long term credit they can look. I think credit should be a lot easier to get but based on realistic income - while students are mainly unreliable borrowers, it would be good to have a card which would even just let them have £200 - not enough for them to extend their debt ridiculously, but enough to see them through times where they were desperate until they could get more! and the whole store card thing - stupid!! since not being allowed to apply for a bhs card i have tried to avoid them as it's like being told i'm not as good as the person standing next to me in a queue.
(obviously the whole mortgage thing doesn;t apply as i couldn't pay mortgage repayments - im just talking about small level credit)

RichPyke

It would be nice to be able to get a cheap (or even average) rate on a mortgage... FTB mortgage taken out 3 months ago and the APR is insanely high (and fixed for 2 years too!!) despite my credit rating being excellent and my salary being higher than average (not taking in to account the self employment earnings). Yes, I got the mortgage promise instantly (pretty much anyway) but I am paying for it... and fyi, mortgage promise means very little... they can, and do, still turn you down going by stories I heard and read while I was applying.

Sure it's a 90% LTV mortgage, I'm a FTB so it's going to be up that end... but I can pay it, I have about 7 years worth of bank statements and pay slips showing that I constantly earn plenty to cover the mortgage and it's secured on the house anyway so the risk the lenders are taking is pretty low...

Loans on the other hand, easy to get and have good rates (not as good as a few years back but still lower than my mortgage).
Credit cards, they are all throwing them at me, pre-approved (which doesn't actually mean it's approved as they still check you out after you agree etc...) but high interest.

So there wasn't actually an answer on the poll I could agree with to be honest. Yes it's easy to borrow but cheap borrowing, only if it's up to about £25,000. Borrow a substancial amount for a long period of time such as £117,000 over 35 years and you get stung for it.

gailey_2

If you talking morgages than things are worse as they 20-25percent deposit, less say 3half times income was up to 6 few years ago and superclean credit history.
All the talk of being responsible lenders means borrowing will become harder and more peope excluded.

Its true house prices dropped but conditions become much harder to get a morgage.

Consumer debt thats still availiable but much more expensive.
hubbys had loans with aa for years.
One month his bank messed up his dd not sure if santander fault or aa.
but when he rearrnged his loan during the credit chruch despite 36k a year salary intrest rate went from 7percent to nearly 15percent.

credit cards have slowly hikes rates from introductary 16percent to 29.9 percent.
Think mainstream borring will become too cautious and much more expensive.
This will then push people towards high interest loans from pay day companies or provident.

littlerat

I've voted needs to be easier available...

Buuuut, I may be biased, in Cornwall you often get people on relatively low wages paying high rents, yet unable to get a mortgage (which would be £200 cheaper a month at times) as they don't earn enough. I'd presume that's a national problem, but I can't say for sure.

Certainly a problem I'll have when working if I don't move out of Cornwall!

archer7

I think we're round about right. Most people are able to get a credit card to use responsibly and build their credit rating, even if they've made mistakes in the past or are on little income. I think the tightening of restrictions is definitely a good thing - my sister is one of many people I know that have spent completely irresponsibly due to the ability to get cheap credit. I think there certainly needs to be lending available to everyone - that's where companies like Provident can prove useful, yet their high rates will hopefully encourage people to change their spending habits.

As for mortgages, I'm afraid I have absolutely no experience whatsoever