Shock Interest Rate Announcement

shortchanged_2

RenovationMan wrote: »

"So, can you come up with a scenario where a mortgage provider would need to use salary multiples to determine the size of a mortgage loan AFTER they had already used affordibility".

Over to you shortchanged.

Can you please re-word the question so I can understand it better. I'm not really sure what the question is asking.

EchoLocation

ringo_24601 wrote: »

I'm in this position.. putting a bit of a gamble recently by going for a tracker on the hope that the rate stays put for a couple of years still - the economy has flat lined and it's not going up for a while... heck, i can imagine things getting worse still.

I suspect you're not alone in that gamble.

Does anyone know if there any figures, official or otherwise, which show how many people have started on, or switched to, trackers since 2009?

RenovationMan

shortchanged wrote: »

Can you please re-word the question so I can understand it better. I'm not really sure what the question is asking.

Jeeze shortchanged, I've asked it 4 times now. Perhaps you should look at the other three times? Come on now, you're really not that slow are you? *sigh* just in case you are, here it is one last time, broken down into bite-sized pieces to help you:

You stated that you think banks should use salary multiples as their lending criteria.

I said that this would mean that someone with large credit card debts and loans would be given the same mortgage as someone with no debts at all but with the same salary.

You then backtracked and said that you agreed with me that lending should be based on affordability, but then realised this was a 180 degree rotation and so you added that they should also be evaluated via salary multiples.

I then asked the question that you keep avoiding, even resorting to trolling to try and divert me.

Are you ready?

Here we go...

"Why would we need to use a salary multiple when we have already used affordability to determine how big a mortgage shomeone should have? Can you supply an example of how this would work?"

Back atcha. :cool:

shortchanged_2

RenoMan I stated a long time ago my position on this and I'm sure it was to you.

For me there has to be a cap somewhere and for me the lower the better, purely because I feel it will help control house prices and protect it from further boom and bust cycles.

So say the set limit for a single earner is 3.5 times income, this should be the top level for a clean credit record etc. If someone has lots of debts etc then they get lent less, say 3 times or 2.5.

You find this hard to understand now because I agree at the present time with house prices as they are nobody would be able to afford a house with these income multipliers, so therein lies the problem.

chucknorris

RenovationMan wrote: »

Jeeze shortchanged, I've asked it 4 times now. Perhaps you should look at the other three times? Come on now, you're really not that slow are you? *sigh* just in case you are, here it is one last time, broken down into bite-sized pieces to help you:

You stated that you think banks should use salary multiples as their lending criteria.

I said that this would mean that someone with large credit card debts and loans would be given the same mortgage as someone with no debts at all but with the same salary.

You then backtracked and said that you agreed with me that lending should be based on affordability, but then realised this was a 180 degree rotation and so you added that they should also be evaluated via salary multiples.

I then asked the question that you keep avoiding, even resorting to trolling to try and divert me.

Are you ready?

Here we go...

"Why would we need to use a salary multiple when we have already used affordability to determine how big a mortgage shomeone should have? Can you supply an example of how this would work?"

Back atcha. :cool:

The problem with a more complicated system (and I really mean this I am not being flippant) is that SOME (notice I said some, not all) of the people who work for mortgage lenders are not particularly bright. A few times to speed things along while we were buying a property I have had to talk them through the process for things to go through smoothly, otherwise it would have been all messed up.

RenovationMan

shortchanged wrote: »

RenoMan I stated a long time ago my position on this and I'm sure it was to you.

For me there has to be a cap somewhere and for me the lower the better, purely because I feel it will help control house prices and protect it from further boom and bust cycles.

So say the set limit for a single earner is 3.5 times income, this should be the top level for a clean credit record etc. If someone has lots of debts etc then they get lent less, say 3 times or 2.5.

You find this hard to understand now because I agree at the present time with house prices as they are nobody would be able to afford a house with these income multipliers, so therein lies the problem.

So you have an unworkable proposal.

DervProf

RenovationMan wrote: »

So you have an unworkable proposal.

Unless, heaven forbid, house prices were allowed to fall to levels that allow what shortchanged is suggesting to work.

RenovationMan

DervProf wrote: »

Unless, heaven forbid, house prices were allowed to fall to levels that allow what shortchanged is suggesting to work.

Heaven forbid. How far would London house prices have to fall in order for the 3.5x salary to work there?

DervProf

RenovationMan wrote: »

Heaven forbid. How far would London house prices have to fall in order for the 3.5x salary to work there?

A long way ?

RenovationMan

DervProf wrote: »

A long way ?

You tell me, you're the one running with shortchange's proposal. You need to flesh it out a little if you want to convince people that it'll work.