Considering getting UK new Subprime Mortage deal

toomsie

"The first ever government-backed mortgage indemnity scheme is now available. The NewBuy Guarantee scheme aims to help homebuyers who only have access to a 5% deposit."

It is clare that the government is making the same mistake as the US, and is an extremely bad move. However, I am unsure if I myself should use this to get on the housing ladder myself. Would I be buying at the wrong end of a housing bubble or would this not matter if I am using the house/or appartment as a place to live, not as an investment.

kingstreet

The title and the text don't fit together.

Is it subprime, or is it Newbuy?

To be eligible for NewBuy, you need a clean credit history and there are no subprime products under that heading.

toomsie

kingstreet wrote: »

The title and the text don't fit together.

Is it subprime, or is it Newbuy?

To be eligible for NewBuy, you need a clean credit history and there are no subprime products under that heading.

It is Newbuy. But it is more or less identical to US subprime mortgages. Lending money to those who wouldn't otherwise have the commitment to save for a deposit or those who can barely afford a house could be a risk.

GMS

toomsie wrote: »

It is Newbuy. But it is more or less identical to US subprime mortgages. Lending money to those who wouldn't otherwise have the commitment to save for a deposit or those who can barely afford a house could be a risk.

Nothing like US sub prime. Couldn't be further apart.

Building_Surveyor

i see his point though to an extent. I don't understand the scheme at all - i've just got on the housing ladder thankfully without such a scheme, but would be interested to hear how the guarantee scheme works?

kingstreet

I thought this was someone who wanted help.

I was obviously wrong.

How someone with a smaller deposit can be compared with those who have no income and no means of paying a mortgage, I don't know. I think there's a forum for those who wish to do so, to air their views. "Debate House Prices," I believe it is...

Building_Surveyor

i think the word 'guarantee' indicates to a lot of people that if someone defaults on the mortgage then the government guarantees the payment. I have no idea what the scheme is about but think the OP wanted clarification if the scheme is for people with past credit issues, not necessarily no income etc - that would be madness

kingstreet

Building_Surveyor wrote: »

i think the word 'guarantee' indicates to a lot of people that if someone defaults on the mortgage then the government guarantees the payment. I have no idea what the scheme is about but think the OP wanted clarification if the scheme is for people with past credit issues, not necessarily no income etc - that would be madness

Here's a link to the NewBuy site, for your info;-

http://www.newbuy.org.uk/newbuy-the-facts/

toomsie

Thanks very much for the link. I will have a look at it in my spear time.

Thrugelmir

toomsie wrote: »

Lending money to those who wouldn't otherwise have the commitment to save for a deposit or those who can barely afford a house could be a risk.

Underwriting systems are able to weed out the applications that fail to meet affordability criteria.

Not all lenders are participating in the scheme either.

So may not have effect many imagine.

brit1234

Like subprime Newbuy is irresponsible lending allowing people to over borrow to keep house prices inflated.

Its for uneducated, desperate or reckless borrowers. Do your research before considering this scheme, it bites back