It's all about the rationing

Graham_Devon

Really2 wrote: »

so you think the loan rates are set on where they think the housing market is going not on what they have available to lend.

No, you are trying to put words into my mouth.

You suggested that lending has nothing to do with anticipated prices.

I said thats ridiculous. I didn't suggest anything about what lending is based upon, which is several factors.

Really2

Graham_Devon wrote: »

Oh come on. That's ridiculous.

Nothing at all to do with the direction of the assets the lending is based on!?

so you think the loan rates are set on where they think the housing market is going not on what they have available to lend.

Any proof on that? did they introduce 0% mortgages in 2009?

No it hit nearly 30%? so are they seeing less chance off falls in your eyes now compared to 2009?

MacMickster

Really2 wrote: »

So are far more risky but they lend 100%?

At much higher interest rates to reflect the increased risk.

Can you really see people queuing for 5% deposit mortgages if the interest rates that they were asked to pay were equivalent to those on car loans?

Really2

Graham_Devon wrote: »

No, you are trying to put words into my mouth.

You suggested that lending has nothing to do with anticipated prices.

I said thats ridiculous. I didn't suggest anything about what lending is based upon, which is several factors.

So explain that to us GD where does the anticipated price fit in to current lending?

So if there was expected housing boom but little money to lend are you telling me they would lend a 5% LTV for most or would they still throttle back on risk and edge to 25%?

Really2

MacMickster wrote: »

At much higher interest rates to reflect the increased risk.

Can you really see people queuing for 5% deposit mortgages if the interest rates that they were asked to pay were equivalent to those on car loans?

100% mortgages are more than unsecured loans.

Nat west 6.89% two years.

You can get an unsecured loan @ 6.2%

So where is that higher rate on risk you were taking about, this is afterall a like for like comparison.
A car will lose 10-30% in a year or a loan could be spent on something virtually worthless.

PS I think you will find a lot of car finance is secured.

angrypirate

I dont understand why the huge debate. 100 - 115% mortgages are not the norm. The norm for a first time buyer is 10%. Part of having a deposit shows to the lender you are responsible with money. I will be quite happy to see the back of 100% deposits for good.

Really2

angrypirate wrote: »

I dont understand why the huge debate. 100 - 115% mortgages are not the norm. The norm for a first time buyer is 10%. Part of having a deposit shows to the lender you are responsible with money. I will be quite happy to see the back of 100% deposits for good.

I agree with all of that.

Thrugelmir

the_flying_pig wrote: »

the fact is that someone who has a very well-paid, very secure job, is almost always a good person to lend money to, regardless of deposit size.

How many people can now say this hand on heart............

Very very few and those that do probably buy for cash.

Thrugelmir

julieq wrote: »

There's nothing wrong with 125% mortgages.

Have you read NRAM's accounts for the half year June 2011?

Full breakdown of arrears. Very enlightening. As shows the poor quality of the lending book.

Thrugelmir

IveSeenTheLight wrote: »

You could probably look at this quite simplistically and consider that until there is sufficient competition by lenders

92% of all new lending is provided by 6 lenders.

So where's the competition going to come from?

The demutualised building societies who used to make up a high % of the market. Are either now defunct or have been absorbed by the big 6.