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Mortgage indemnity guarantee
Comments
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Why did MGI/MIG fees suddenly cease to exist ?
Booming housing market where feeling was that it could be dropped and that increased lending would compensate for the cases where losses would be made. Plus, a move away from static calculations of affordability based on 3+1 or 2.25x joint to very little calculation during the credit boom years to a more sensible affordability approach that exists now.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
As a consumer who may have been bitten by such a charge in the early 90's ....
What do you mean "may have been bitten"? You're not even sure that you paid for a MIG??...Also out of interest exactly what percentage deposit do you believe one should possess before becoming a safe and viable purchaser as a first time buyer of an average family home, bearing in mind the responsibility of your advice for safeguarding the risk of negative equity and financial loss is equal to both the lender and the borrower ?
Since you ask, any percentage figure between 0 and 99. (Since obviously, if you had a 100% deposit, you wouldn't need a mortgage.) And equally obviously, since the risk of lending (say) 95% of the purchase price is greater than the risk of lending (say) 70%, you'd expect the lender to charge a higher interest rate in the former case. Or alternatively perhaps insist that the borrower pay the cost of an insurance policy that covered that risk. Either way is fine by me.0 -
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Booming housing market where feeling was that it could be dropped and that increased lending would compensate for the cases where losses would be made. Plus, a move away from static calculations of affordability based on 3+1 or 2.25x joint to very little calculation during the credit boom years to a more sensible affordability approach that exists now.
Or an alternative interpretation ?
Booming housing market followed by burning of lending responsibility rule books in favour of new business resulting in falsely inflated housing stock with an inevitable major downturn as we have now suffered whereby such policies may actually be needed but most likely would fail to provide the protection as represented to the borrower.0 -
What do you mean "may have been bitten"? You're not even sure that you paid for a MIG??
Since you ask, any percentage figure between 0 and 99. (Since obviously, if you had a 100% deposit, you wouldn't need a mortgage.) And equally obviously, since the risk of lending (say) 95% of the purchase price is greater than the risk of lending (say) 70%, you'd expect the lender to charge a higher interest rate in the former case. Or alternatively perhaps insist that the borrower pay the cost of an insurance policy that covered that risk. Either way is fine by me.
Remove the blinkers mate, I know full well I was charged an MGI, not only that I am still paying for it to this day and will be till the end of the mortgage term when I will finally be obliged to pay the MGI fee itself so I have very good reason to question its fairness and any of its representations.
Not only that I was charged an extortionate rate of interest which was and still is being applied to the MGI fee. The only real difference between my mortgage 20 years ago and today is I managed to renegotiate the interest rate but not without first paying a very heavy penalty.0 -
As a consumer who may have been bitten by such a charge in the early 90's and still paying for this charge today and as such may have reasonable arguments against their fairness and representation at the time of sale. Therefore I think this qualifies me to raise several questions surrounding them
Which have been answered. You just don't like those answers.the ones smoking nitrous oxide
It is a gas - you can't smoke it. Ask Kyle Walker.are the ones not prepared to question such fees or defending them without being in possession of the full facts.
The fact - i.e. the requirement for a Mortgage Indemnity Guarantee was stated in the mortgage offer whenever it applied.exactly what percentage deposit do you believe one should possess before becoming a safe and viable purchaser as a first time buyer of an average family home, bearing in mind the responsibility of your advice for safeguarding the risk of negative equity and financial loss is equal to both the lender and the borrower ?
It is not an exact science. As Antrobus infers the only 100% safe option is a 100% deposit.
Business - all business - involves risk which must be managed. That may mean accepting that you will take the odd hit. Alternatively, you may decide to share the risk with others. For example, you might choose, with others, to put a bit of money into a big pot that is then used to meet the needs of the few unlucky ones. Running such a scheme could itself be done as a business. That is what an insurance company does - but in the end it needs to cover its running costs and make a profit too.0 -
Not only that I was charged an extortionate rate of interest which was and still is being applied to the MGI fee.
You should be lucky the MIG existed then because you wouldn't have got your house. If you didnt like the mortgage interest rate then why did you buy it?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Remove the blinkers mate, I know full well I was charged an MGI,.....
Blinkers? What are you on about? I was only quoting what you had written, as in "may have been bitten". I can't help it if you say one thing and mean another.:)You should be lucky the MIG existed then because you wouldn't have got your house. If you didnt like the mortgage interest rate then why did you buy it?
Paid for MIGs myself back in the 1980s. That's how I was able to buy a house. Of course, I'd rather not have paid for one, but that was the deal.0 -
Wake up. There are no issues with MIG's being applied. Take responsibility that you chose a lender that charged one. You have no complaint. Read previous posts and absorb.Remove the blinkers mate, I know full well I was charged an MGI, not only that I am still paying for it to this day and will be till the end of the mortgage term when I will finally be obliged to pay the MGI fee itself so I have very good reason to question its fairness and any of its representations.
Not only that I was charged an extortionate rate of interest which was and still is being applied to the MGI fee. The only real difference between my mortgage 20 years ago and today is I managed to renegotiate the interest rate but not without first paying a very heavy penalty.0 -
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