Budget 2013.. What it means for those saving deposits

megaginge

Wallhart wrote: »

At what interst rate though.

This is my main concern. Banks have taken advantage of these schemes in the past.. I guess only time will tell on that one!

However the verification that pending interest rates being set - that this is otherwise great news for me, and there is nothing hidden between the lines to catch us out - is very good news indeed

Dave

megaginge

EvilJaz wrote: »

Hi Megaginge,

My comment was for you :P. With regards to your comment:



If you do wait 2 years, chances are property prices will be higher. So there maybe a need for you to have more than 50k deposit to get 20% LTV.

Appreciate that is always a risk! So I'm likely best (given I can defend against negative equity by being on a pretty strong repayment mortgate) in going for the 5% rather than waiting if at all possible you would say? Music to my ears..

HAMISH_MCTAVISH

Yes, this should result in around 10 times as many high LTV borrowers (mostly FTB-s) being able to buy next year and the following 2 years as could in the last 12 months.

Excellent news for FTB-s, excellent news also for people looking to trade up from their current FTB house, as there will be a huge surge of buyers for those properties from next year onward.

Wallhart

I think banks will definately take advantage of these schemes. As I have stated does the risk free lending get incorporated into the scheme. I doubt it. They now know that they will get more mortgage applications they can accept risk free and earn a nice income on it.

Needsomesunshine

megaginge wrote: »

Chaps it seems to have gone off on a firstbuy related tangeant.

Whilst I'm happy for people to use my topic to find out about their own circumstances: What does the deposit guarantee mean for me?

Dave

i can only see people trying to help you Dave, these are the schemes open to you.

megaginge

Needsomesunshine wrote: »

i can only see people trying to help you Dave, these are the schemes open to you.

Erm, no. Read the rest of the thread (if I may be so brash.) I have no interest in Firstbuy in either it's old form of the proposed one. I do however have an interest in the deposit guarantee scheme! So after 5 or 6 replies relevant only to firstbuy I put a simple prompt in, and people have been extremely helpful after the event

Dave

leereni

Please somebody clarify for me.

1. The new scheme (help to buy) is for all buyers not just first time buyers.

2. When does this start? I just heard on the news the loans (20%) start from this April on new builds and jan 2014 for any homes.

3 what typesof credit history will you need? Perfect or some with maybe some minor issues in the past?

Thrugelmir

megaginge wrote: »

I don't plan for the first place to be any more than a step.

Expensive step. Suggest you cost up the expense of buying and selling property. A lot of money can be thrown away.

Thrugelmir

leereni wrote: »

3 what typesof credit history will you need? Perfect or some with maybe some minor issues in the past?

Standard lenders criteria. So affordability will be a factor in the granting of mortgages.

£40 billion a year isn't a huge sum.

HSBC for example grants around £15 billion of mortgages a year currently.

opinions4u

megaginge wrote: »

This is my main concern. Banks have taken advantage of these schemes in the past

Most lenders won't touch these schemes with a barge pole.

1) They over inflate the initial purchase price.

2) Buyers have less commitment to the property and are more likely to default.

3) Lenders are often left with a property they can't shift without a big loss.

4) That government loan has to be repaid at some point. It runs the risk of pushing you into negative equity at some point which can restrict your ability to move.

Higher risk = higher rate.

The detail of this proposal is the key. On the face of it the scheme gives lenders more security so, unlike similar new build schemes, some of the risks above are mitigated. If the lender has a genuine LTV of 75% and the state is taking the risk above this expect decent rates.

HAMISH_MCTAVISH wrote: »

Very good news indeed.

It means around 500,000 to 750,000 high LTV mortgages will be available from January 2014 spread over 3 years.

That sounds remarkably high.