No more 100% mortgages

dwight-van-man

ManAtHome wrote:

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...

Which is exactly why they will not back out of 100% deals - banks lend money to make profit and 100% deals are extremely profitable. Some lenders have been pushing their risk profile accepting income as mentioned above and may well be considering cutting back on what they will accept - WFTC etc - the ongoing availability of this is totally dependent on government and we are shortly due for an election. Short term contracts that havent been renewed? Where is the security there for a lender? IMHO, no-one should consider taking out a mortgage if they are reliant on benefits or new 3/6 month contracts. Like I said above, the lender I have no authority to speak on behalf of has never accepted either of these forms of income and has the best 100% arrears book in the industry. There is more chance of lenders going back to charging MIG to mitigate the risk of 100% plus deals than pulling back from them because, as you say yourself, lower LTV deals don't carry the same level of profit. As far as lenders pulling out of RTB, well who really cares? Theres a growing list of councils making it harder to buy under this anyway. And pulling out of BTL? It might be on some lenders agenda if its a fringe area for them but in general terms, theres still a huge potential in the BTL market. Again, my pet lender is looking to expand its BTL range.

If lenders in general were really looking to pull out of the riskier areas of lending the two most obvious markets would be self-cert/fast track and adverse - and thats not going to happen, because its hugely profitable! See a theme?

james3333

if this is true....
this could have MASSIVE effects on the market...no FTB's... BIG price drops.
maybe time to sell up and rent for a while.....?

toonfish

uinless there is intervention from outside then there is no way 100% lending will stop. Other lenders are jumping in now as Northern Rock pretty much had the market sewn up.

That's not to say individual lenders might not pull out.

zag2me

Its not true, 100% mortgages are here to stay

MarkyMarkD

This is meaningless rumour.

Mortgage arrears are still at historically low levels and there is no great reason to believe that 100% (or greater) mortgages will be withdrawn.

The new capital requirements for lenders will likely lead to more pricing for risk, i.e. people borrowing higher percentages will pay a higher rate, but this already happens to a certain extent.

It would take an enormouse shift in arrears behaviour for lenders to pull out of higher percentage lending completely and that isn't happening to any observable extent at the moment.

One or two lenders pulling out won't make any difference to the market.

arkie

Birmingham Midshires 100% plus
Northern Rock 120%
Accord 100% plus
mortgage express 130%
]
all available , no sign of them getting withdrawn, just another rumour as usual set off by "my mate says.....a man down the pub says "

sarah_elton

HSBC's graduate mortgage allows you to borrow up to 100%, with any percentage at the same rate (I took one out at 100% a year ago). According to the site, this percentage is still allowed...

HelpWhereIcan

While I think it all sounds a little fishy, I think the OPs friends work at HSBC (from his use of the term "financial planning managers" which is HSBC's term) and it may well be that the HSBC are planning to withdraw their 100% altogether.

This would be no great shakes as the HSBC require most people to have a 5%deposit anyway and have never seen themselves as a 100% lender. The Tax credits issue and the contracts issue will be very lender specific and there is no uniform policy on these across the industry.

What it may signal (if correct) is that lenders will be moving away from offering 'higher risk' products through the branches and distributing them through the broker market as it is the broker that takes the risk of a mis-selling claim.

I have heard rumours that the HSBC is about to enter the broker market - maybe this is the first sign.