We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
100% mortgages - it begins!
Turnbull2000
Posts: 1,807 Forumite
http://www.ftadviser.com/FTAdviser/Mortgages/News/article/20110810/02b84264-c33f-11e0-96f5-00144f2af8e8/Bank-offers-100-LTV-mortgage-direct-to-customers.jsp
Apparently this product is based on 'affordability' rather than salary multiples. No surprise there. What is surprising is that they're back so soon - I guessed they'd return in 2012. Only a matter of time until other lenders start to complete. I wonder what the rates are though?
Northern Bank confirmed today (10 August) it was offering mortgages at 100 per cent loan-to-value (LTV).
Sharon Wylie of the communications team at Northern Bank confirmed the bank offered 100 per cent mortgages.
Apparently this product is based on 'affordability' rather than salary multiples. No surprise there. What is surprising is that they're back so soon - I guessed they'd return in 2012. Only a matter of time until other lenders start to complete. I wonder what the rates are though?
Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
0
Comments
-
short memories?0
-
Banks with "Northern" in their name tend to end up offering high LTV mortgages, then eventually head south.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
-
So Mr Norwood excitedly suggests you don't need to qualify for anything in particular or have any particular credit history and it's not any more difficult to have the 100% loan. However, the people used an example, were turned down for the mortgage.Mr Norwood described the first-time buyers as "just bog standard customers" with no particular qualifications or credit history.
He said: "They were ultimately turned down but the bank did not perceive it to be any more difficult at 100 per cent LTV than 95 per cent LTV.
Thats great, its like saying theres no particular entry requirement for this establishment, we just don't want people to come in.
Numbers would be useful, considering the above!!0 -
"Yesterday I was talking to a first-time buyer with a 5 per cent deposit and they went into the Northern Bank and the bank said, 'You don't need any deposit we would just go for 100 per cent'."
He said: "They were ultimately turned down
That a bank is issuing these to a select few customers is no surprise, after all, if someone can afford to pay rent they can afford to pay a comparably priced mortgage.
But clearly they are still cherry-picking customers and rationing the very limited funds they'll have available to lend at these LTV's.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
I would agree that the difference between 100% and 95% in terms of repayments isn't really an issue tbh. If you can afford 95% you can most likely afford 100%.
But the whole point of 95% is the bank has a saftey net of 5% in terms of house price decline and negative equity.Faith, hope, charity, these three; but the greatest of these is charity.0 -
But the whole point of 95% is the bank has a saftey net of 5% in terms of house price decline and negative equity.
And it can demonstrate that the potential borrower does have some financial discipline.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
HAMISH_MCTAVISH wrote: »But clearly they are still cherry-picking customers and rationing the very limited funds they'll have available to lend at these LTV's.
And so they should.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
But the whole point of 95% is the bank has a saftey net of 5% in terms of house price decline and negative equity.
This is a non-issue.
Prices can fluctuate 5% between winter and summer in some areas.
It's not LTV that causes default, it's almost always unemployment. And if you have no money coming in, you won't be able to afford a mortgage at 100% LTV any better than a mortgage at 90%, or 80%.
As for bank losses, with a default rate of less than 1%, and given the other costs involved in repossessing, the LTV difference between 90% and 100% matters little.
You're talking changes to a banks overall bottom line of a few hundredths of a percent.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
it can demonstrate that the potential borrower does have some financial discipline.
Paying rent demonstrates they have the financial discipline needed to pay a mortgage.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Paying rent demonstrates they have the financial discipline needed to pay a mortgage.
Who says they all will be paying rent ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352K Banking & Borrowing
- 253.5K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245K Work, Benefits & Business
- 600.6K Mortgages, Homes & Bills
- 177.4K Life & Family
- 258.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards