MSE News: Rise in 90% mortgages

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"The number of home loans for those with a limited deposit has risen to its highest level in over two and a half years ..."

Read the full story:
Rise in 90% mortgages

Mobeer

"What experience and history teach is this — that nations and governments have never learned anything from history, or acted upon any lessons they might have drawn from it."

Georg Wilhelm Friedrich Hegel, Lectures on the Philosophy of History (1832)

Gorgeous_George

I understand your sentiment Mobeer but removing funding for mortgages or imposing huge restrictions is not the answer.

IF the Government will continue to minimise the risk of a house price crash (a proper one - not like the blip of the last few years) then FTBers could safely take on a 90% (or even 100%) mortgage to start the journey to home ownership. They may not see any rise in property prices (that is prices, not values) but they would be homeowners one day - hopefully before they retire at the age of 148 .

GG

poppy10_2

Poor news article. I'm not expecting 'MSE News' to bring us in-depth investigative journalism, but this is just a raw cut and paste of an entire moneysupermarket.com press release. Leaving aside the ethics of allowing such an advert disguised as a news article on a site which proudly declares itself to be "Free of ads!", to allow such descriptions a return to risky lending practices as "bringing hope" and being "encouraging" without any kind of rebuttal or counterpoint is demeaning for a site of this size and reputation.

brit1234

So with economists predicting a 10% house price fall this year are 90% LTV mortgages really responsible for the borrower? I think not.

Rather than the road to no where it seems this is the road to negative equity.

Thrugelmir

brit1234 wrote: »

So with economists predicting a 10% house price fall this year are 90% LTV mortgages really responsible for the borrower? I think not.

There's a market for every product. Providing the lenders acts responsibly in whom the money is advanced.

Where's the greatest risk?

(a) £200000k at 60% LTV on £40k annual income

or

(b) £140,000 at 90% on £60k annual income.

m00m00

Buying a 90% ltv property is fine, if you intend to stay in the property for several years and overpay. Expecting to breeze 'up the ladder' simply won't happen, and it will be easy to become stuck in an unsuitable property.

First_Time_Buyer_Guru

It's certainly a pick up from the previous 2 years. At last, 10% mortgages are coming back, but as m00m00 says, it's really the max LTV that should be entertained. There's a reason that 95% mortgages come with such major caveats, because banks are scared that even a 6% fall in house prices will throw the borrower into negative equity. Still, all in all, very positive news.

ess0two

brit1234 wrote: »

So with economists predicting a 10% house price fall this year are 90% LTV mortgages really responsible for the borrower? I think not.

Rather than the road to no where it seems this is the road to negative equity.

Maybe the ecnomists are wrong.Its doubtful were gonna see any where near 10% for the remainder of the year.

rickbonar

I think FTBs should avoid this and wait until the Bank of England raises the interest rates and kick starts the house prices.

Paulgonnabedebtfree

brit1234 wrote: »

So with economists predicting a 10% house price fall this year are 90% LTV mortgages really responsible for the borrower? I think not.

Rather than the road to no where it seems this is the road to negative equity.

Mind you, some people will be OK with a bit of negative equity - so long as they have no intention of moving for quite a while and so long as they won't need to raise any money on the house. If the payments remain affordable, negative equity is just a fairly meaningless number for some people.