House Sales rise in January, + 4k YoY

grizzly1911

chewmylegoff wrote: »

I'm sure some people do choose to do so but I expect they are in a pretty small majority. I am currently looking to buy somewhere with 60% LTV so the mortgage is cheap, I could afford to buy somewhere significantly more expensive but I don't want it - but again most people probably don't do that.

As you say lower LTV, less risk for lender in the event oif default, they can afford to offer better rates. As a FTB if you have a bigger deposit, can show it comes form your own resources, demonstrates affordability and lower risk which agian feeds into lower pricing.

It makes sense to live comfortably within your means if you have a choice.

chewmylegoff

grizzly1911 wrote: »

As you say lower LTV, less risk for lender in the event oif default, they can afford to offer better rates. As a FTB if you have a bigger deposit, can show it comes form your own resources, demonstrates affordability and lower risk which agian feeds into lower pricing.

It makes sense to live comfortably within your means if you have a choice.

True, but my guess is that most people will save up to buy a house and buy whatever they can afford which meets their minimum requirements as soon as they can afford it.

Graham_Devon

wotsthat wrote: »

Are you suggesting that FTB's have access to plenty of 95% loans but might be so credit averse they're saving up another 15% to be on the safe side?

Yes.

As I stated, and as is backed up by the BBA. People are averse to taking such loans at the moment.

Graham_Devon

chewmylegoff wrote: »

I'm sure some people do choose to do so but I expect they are in a pretty small majority. I am currently looking to buy somewhere with 60% LTV so the mortgage is cheap, I could afford to buy somewhere significantly more expensive but I don't want it - but again most people probably don't do that.

That's exactly what I'm saying.

You are offering more of a deposit as you want security.

You could of course buy much more on a 95% loan, but don't want to.

Hamish seems to find this hilarious.

HAMISH_MCTAVISH

Graham_Devon wrote: »

People are averse to taking such loans at the moment.

UK Treasury, amongst many, many, many others seems to think the problem is more a lack of availability of such loans.

The Treasury is holding talks with lenders and mortgage trade bodies to explore how mortgage indemnity guarantees can be used to improve access to 95 per cent loan-to-value mortgages, including offering MIGs on older properties.

A source close to the talks says: “Essentially, the Treasury’s agenda is how do we improve lending at 95 per cent mortgages as there is unmet demand there and something needs to be done about it.

A Treasury spokeswoman says: “We have said that we will do more to help families who can afford a mortgage, but are unable to raise a large deposit, to buy their own homes. ”

http://www.mortgagestrategy.co.uk/latest-news/treasurys-new-bid-to-boost-95-ltv-mortgages/1065819.article

chewmylegoff

Graham_Devon wrote: »

That's exactly what I'm saying.

You are offering more of a deposit as you want security.

You could of course buy much more on a 95% loan, but don't want to.

Hamish seems to find this hilarious.

I'm only in that position through inheritance though. It means I have a much bigger deposit than I actually need in order to buy so I can make that choice. My guess is that most people, or at least a significant majority, are not in a position to choose.

I couldn't actually get 95% mortgage by putting my whole deposit down as the mortgage interest alone would be approximately three times my gross salary.

Graham_Devon

chewmylegoff wrote: »

I couldn't actually get 95% mortgage by putting my whole deposit down as the mortgage interest alone would be approximately three times my gross salary.

In exactly the same position, though not quite that much x my wage.

Hence why although the 95% loan might be there, I wouldn't be taking it. There's plenty out there in the same boat would be my guess.

95% does not always mean easier.

grizzly1911

HAMISH_MCTAVISH wrote: »

UK Treasury, amongst many, many, many others seems to think the problem is more a lack of availability of such loans.

http://www.mortgagestrategy.co.uk/latest-news/treasurys-new-bid-to-boost-95-ltv-mortgages/1065819.article

The Treasury is holding talks with lenders and mortgage trade bodies to explore how mortgage indemnity guarantees can be used to improve access to 95 per cent loan-to-value mortgages, including offering MIGs on older properties.

Certainly help the fleece the borrower for more fees, to pay for the guarantee, without protecting themselves against loss, only the lender. Add on a nice fat lending fee and relatively high interest rate jobs a good un. Stitched up like a kipper.

Always hit those in greates need the most. Doesn't matter what you buy.

james_toney

Graham_Devon wrote: »

In exactly the same position, though not quite that much x my wage.

Hence why although the 95% loan might be there, I wouldn't be taking it. There's plenty out there in the same boat would be my guess.

95% does not always mean easier.

true Graham 95% does not always mean easier, and i feel for you no-one knows !!!!!! is going to happen, the whole thing is a gamble and i wish i did not have to take part but i had to, with BTL of all things something which i was against. but what the hell, it is working out ok , ... so far

wotsthat

Graham_Devon wrote: »

Yes.

As I stated, and as is backed up by the BBA. People are averse to taking such loans at the moment.

The BBA are saying that in times of recession people become more risk averse. That's not contentious.

They're not saying that the affect is so severe to effectively mean that there's a first time buyer boycott of plentiful 95% loans falls. There are many factors at play but banks forcing 95% mortgages on FTB's and being rejected isn't one of them - it's fantasy.