No more 100% mortgages

TEDDYRUKSPIN

Latest news. Banks / building societies are starting to stop giving out 100% mortgages in the next few months. This is because so many of these clients have started to fall into arrears. The first will be HSBC and so on.

Basically, you will now need at least 5 percent deposit to purchase a house and even then you are not guaranteed. Deposits now being average 7k, it will be harder for the first time buyer. So if you can't afford the deposit you won't be on the bandwagon.

This is accurate information. No joke!

Guy_Montag

What's your source?

MortgageMamma

Do you have a link or reference to this article? I can see tightening lending criteria happening already, but I doubt they will withdraw 100% mortgages in their entirity. Believe me, where there is a demand the banks will supply, even if it means charging extortionate rates!

DrFluffy

Yes - what's your source? Many banks have just announced that they are extending 100% mortages to all professionals, not just peeps off their predefined list...

dwight-van-man

Speaking from the perspective of one particular lender who offers beyond 100% (who of course I do not speak on behalf of!), the arrears profile has actually reduced over the last six months - any lender with a robust credit scoring process can easily manage their arrears book - and given how massively profitable this particular product range is which in turn cross-subsidises the mainstream range, there is neither the need nor the inclination to pull out of the 100% market. In fact, its going to be pushed even harder than it currently is.

BM Sols has just gone into 100% plus, Accord are rumoured to be going 115% as was someone else.

MortgageMamma

Accord already at 115%

roswell

This could be interesting are the banks getting scared of which way the decision on interest rates could go on Thursday ?

Coveredinbees!!!!

Lets face it if you can't save up £7K what chance have you got of running a house with all the bills and costs than incurs!!!

TEDDYRUKSPIN

Source! Basically couple of friends are working in most of the top banks as mortgage advisors and financial planning managers. Odd branches have been selected to phase out 100% mortgages in the next few months. They will also not borrow to people with contract jobs which have not been renewed more than once. Also, won't be accepting buy to let or the right to buy mortgages or shared ownership. To top that, will not longer accept such things as working tax credit, job seekers allowance, or any other source of unearned income.

And the reason? Because these are considered high risk! These people tend to go into arrears.

I am not saying all Banks and Building societies will go this way! But Most Will By The End of 2007 / 2008.

Is this telling you something?

meanmachine_2

If this is true it's very significant. That'll do more to knock back prices than any huffing and puffing from the likes of me.

More likely though, the big banks will offload the 100% mortgages onto their sub companies and "officially" be able to claim that thjey're being responsible.

Or another option - they'll offer 95% mortgages with the rest as a secured loan on top.

ManAtHome

dwight-van-man wrote:

any lender with a robust credit scoring process can easily manage their arrears book

That's the key bit - will still be available, but harder to get. Worst customers for the banks are anyone needing a low percentage - much easier to move somewhere else...