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Banks continue to find new and innovative ways to ration mortgages
Comments
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I wonder what will actually happen to the housing market if the banks keep more to the lending criteria of pre boom levels?0
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HAMISH_MCTAVISH wrote: »Well here....
https://forums.moneysavingexpert.com/discussion/3730693
..... is a good example of what I'm talking about.
A young teacher with no defaults or missed payments refused a mortgage at 88% LTV and less than 3.5 times income.
They have a credit rating of 514. That's pretty mediocre.
Secondly you obviously didn't read the thread. The broker messed up and applied for a mortgage the buyer would never have met the requirements for.May be a basic error by the broker in not checking affordability before submitting the application.0 -
HAMISH_MCTAVISH wrote: »Doesn't look that way.
The key points from the thread.
So here's someone that clearly meets the criteria EMY thinks never gets declined. Because there is plenty of money to lend to anyone with a good credit history and a 10% deposit, apparently.... Until of course they get declined. :cool:
How is a credit score of around 500 good? Average credit score is somewhere about 700 and good is plus 800. I suspect there is a problem somewhere which he is not being honest about.
Also he admits that he has a loan of £240 a month so that about 4k knocked off his earnings a year. I also doubt there is no student loan or credit card debt either.
The person in question admits he did not hit NW's affordability calculator which isnt too much different to the average.0 -
How is a credit score of around 500 good? Average credit score is somewhere about 700 and good is plus 800. I suspect there is a problem somewhere which he is not being honest about.
Also he admits that he has a lone of £240 a month so that about 4k knocked off his earnings a year. I also doubt there is no student loan or credit card debt either.
The person in question admits he did not hit NW's affordability calculator which isnt too much different to the average.
Forgetting all that though, it does show the nasty banks are rationing mortgages, which is outrageous!!
:undecided0 -
Clearly these posts are at odds with each other.
The fact is that the number of mortgages being underwritten and net mortgage lending have both fallen since 2007. That means, IMO, either:
1. Demand for mortgages has fallen (i.e. people don't want to buy houses)
2. Suppy of mortgages has fallen
3. A combination of the two.
So what do we think? People can get mortgages but don't want them or people can't get mortgages because banks won't lend.
In 2007 you could have got a 100% plus mortgage. You could also get mortgages with up to 3 CCJ's in the last 6 years. You could make up how much you earned and borrowed 10X your real earnings. You could even borrow a mortgage based on your state pension.
Times are different now. You in reality need a 10% deposit be able to prove your yearly wage ie permanent job earning a yearly wage. No top up's with bonuses etc. Lenders will also take into account loans, student debt, childcare costs etc.
The reality is sensible lending is available. Only issue for me is 95% mortgages should be readily available to FTB's and lenders should not be turning down those with defaults or late payments for mobile phone bills etc which in may cases they did not know about.0 -
Graham_Devon wrote: »Forgetting all that though, it does show the nasty banks are rationing mortgages, which is outrageous!!
:undecided
Outrageous indeed.
How on earth are we going to get 10%+ HPI without relaxing lending criteria ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Graham_Devon wrote: »They have a credit rating of 514. That's pretty mediocre.
Yes I completely forgot.... we should penalise people for not running up large amounts of credit.The broker messed up and applied for a mortgage the buyer would never have met the requirements for.
"Maybe" does not = "did".“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
he admits that he has a loan of £240 a month .
Oh dear.....
A young teacher buys a modest car, presumably required to get to work, and that's grounds for refusing a less than 3.5 times income mortgage?
What flipping planet do you lot live on? Because it bears no resemblance to sanity.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Yes I completely forgot.... we should penalise people for not running up large amounts of credit.
"Maybe" does not = "did".
Oh right, so the mortgage advisor who knows about this product has it wrong and Hamish has it infact right?!0 -
Itismehonest wrote: »However, lenders also seem to be raising the bar by finding other ways to refuse mortgages to people who appear to meet the requirements of even pre-silly-season mortgages.
Such as what?
Banks can raise the bar as they only have limited funds to lend. Therefore will lend to the better risk for the market segment they are targetting.0
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