Taxpayer to take on mortgage risks of first-time buyers

worldtraveller

Taxpayers will underwrite mortgages totalling hundreds of millions of pounds under plans to “unblock” the housing market and revive the flagging economy.

The Prime Minister and his deputy, Nick Clegg, will unveil proposals to help first-time buyers of new homes by carrying part of the risk of their mortgages.

The mortgage guarantee, the first time such a scheme has been attempted in the UK, will result in lenders providing loans with significantly lower deposits than the 20 per cent or more that is typically demanded. The taxpayer, however, could be liable for losses in the event that a home is repossessed.

Telegraph

So, where's the profit? The profit that, for example, the taxpayer was going to get from the sale of Northern Rock?:idea:Oh, hang on! :silenced:

thescouselander

It's not going to work - there's the small matter of the banks not having any money to lend. I don't see how this government scheme is going to help with that - I can't see pension schemes stepping in to any significant degree.

PasturesNew

When I got my mortgage, right after the last crash ... I had to buiy a Mortgage Indemnity Guarantee, which cost 1% of the purchase price.

Lenders required you to buy this insurance policy if your loan was higher than, typically, 85% of the house price. Then, if you did default and get repo'd, the insurance policy would pay the negative equity difference to the lender once the house had been sold on. Then the insurance company came after you for the money it'd paid out, up to 12 years on.

wymondham

The government should keep out of individuals private financial affairs. Had they kept out of meddling then the 'crash' would have been well underway and houses much more affordable by now...... here we go again with sticky plasters.......

If houses are cheaper then people CAN afford them without any short sighted schemes. If builders can't sell their houses at inflated prices then they will have to reduce the cost of them - it's called the free market???!!!!

Aberdeenangarse

.....how much difference is that going to make?

illgetthere

why only ftb's? , what about the families that have seen their house fall into negative equity and can't switch mortgage because their ltv can't secure a good product?

brit1234

It's clear that the building cartel has a strong lobbying group. Every government idea about housing seems to benefit the large developers only with tax payers money and keep new builds artificially high.

More shared equity properties anyone?:mad:

DaddyBear

I don't get it. Why is the taxpayer needed to guarantee the mortgages? I thought mortgages were more affordable now than ever before.

DervProf

Aberdeenangarse wrote: »

.....how much difference is that going to make?

Quite a lot, I expect, when the bulls wake up.

They'll be full of it, I'm sure.

biscit

"The Taxpayer" has made a profit from bailing out banks, many of them have paid off their loans with interest.

DaddyBear

biscit wrote: »

"The Taxpayer" has made a profit from bailing out banks, many of them have paid off their loans with interest.

We haven't paid for the bailout yet.