Nationwide anticipates a 50% house crash

PasturesNew

I don't care, I'm unmortgageable

hethmar

macaque wrote: »

Despite all their bullish messages to home buyers, it is clear that the true position of the Nationwide is much closer to that of the 70% club.

http://www.ft.com/cms/s/2/f4bafaec-5707-11e0-9035-00144feab49a.html?ftcamp=rss#axzz1HeNyvnVt

You arent being serious are you? How on earth can anyone think this means a 50% crash is around the corner? At the same time many BS are offering 95% mortgages again.

If any such horrendous crash happened no one would move as they would be in negative equity, so there would be no advantage to anyone.

ILW

RenovationMan wrote: »

This is just another way for the banks to cash in. They will give the best offer to 50% LTV home owners and the rest will simply have to pay more for their borrowing. I had an inkling of this, hence my 50% ownership quest.

I have to say that FTBers are looking at years of crappy mortgage products until they build up enough equity via mortgage repayments and HPI. Another kick in the groin for those who have decided to wait for a crash before buying.

I cannot see that a 6% mortgage is a particularly crappy product, especially taking into account 5% inflation.

ILW

RenovationMan wrote: »

Who said anything about percentages?

My point was that we didnt even care about LTV a few years ago and now to get the best prices we have to have 50% mortgages. The banks claim they are mitigating risk, which can easily be argued for people with less than 20% LTV in a falling market, but which cannot be argued for people on 30% LTV at any time and 50% is profiteering, pure and simple.

It almost seems as though the banks want to price out FTBers and those who have been in their homes for less than 5 years.

So higher LTV rates are not actually that bad, possibly just that lower lTV rates are even better seems to annoy you?

ILW

RenovationMan wrote: »

Again, who said anything about percentages? You seem to be pursuing a line of discussion that is different from mine.

My point was that you described the rates charged on high LTV mortgages as "crap". I was just trying to find what the context of that description was.

geneer

RenovationMan wrote: »

I actually said that FTBers are looking forward to years of crappy mortgage products before they build up enough equity to qualify for the better rates. My point is that this LTV appartheid was only brought in very recently and seems to be being widened.

You seem to be happy that those starting out with a mortgage have to pay more than those who have had one for years, even though in many cases the FTB may be in a better financial position than existing OO's. I'm not, I think its unfair. If the banks want to pass some of the lending risk back onto their customers, they should examine more of their financial background and base the rates on that, not just how much equity they have.

Not sure why its unfair. Seems fair enough to me.
Limiting the amount of loans (what RM calls LTV appartheid) is hardly a new thing. Banking history didn't start with the lemming like leap to bankruptcy in the noughties.

Welcome to the new new paradigm. Same as the old one.

ILW

RenovationMan wrote: »

I actually said that FTBers are looking forward to years of crappy mortgage products before they build up enough equity to qualify for the better rates. My point is that this LTV appartheid was only brought in very recently and seems to be being widened.

You seem to be happy that those starting out with a mortgage have to pay more than those who have had one for years, even though in many cases the FTB may be in a better financial position than existing OO's. I'm not, I think its unfair. If the banks want to pass some of the lending risk back onto their customers, they should examine more of their financial background and base the rates on that, not just how much equity they have.

Or to rephrase, "FTBers are looking forward to years of pretty reasonable rates, and even better ones when they build up more equity". It's all a matter of persepctive.

LittleMissAspie

FTBs don't have to have a higher LTV than others. We put down a 25% deposit (saved it while renting privately over 4-5 years), probably got more equity to start with than people who've been on the so-called ladder for quite a few years.

It's pure sense that the lower the LTV, the easier the bank can get its money back if repossesed. Hence less risk, hence lower rate.

ILW

RenovationMan wrote: »

I guess it all depends on what you think are good rates. Now we can get onto the subject you have been trying to steer the debate towards. Over to you....

Hoever, before we move on...

You seem to have completely ignored the second part of my post (even to the point that you highlight the first part in red to try and fade the second part into the background!) . It is the case that you like the idea of FTBers paying more than established OO's even though their financial stability may be better. Am I to assume that you are an established OO with decent equity?

I'm all right Jack?

As someone who went through decade of paying double digit rates the currents ones do not seem too bad. As I said it's all a matter of perspective.

As far as my mortgage goes, I am an old git who has now paid it off.