Considering getting UK new Subprime Mortage deal

GMS

brit1234 wrote: »

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

How is it irresponsible lending? All parties are fully aware of the possible consequences and all borrowers will be fully underwritten, credit checked and affordability calculated (with proven income figures).

Also why is your signature 6/7 months out of date? Come on, play fair, take the rough with the smooth.

Brit when do you think you will buy? You claim to have plenty of deposit, good job, steady income and aspiration to own a home yet you continually degenerate every assistance to willing buyers. What exactly are you waiting for?

brit1234

GMS wrote: »

How is it irresponsible lending? All parties are fully aware of the possible consequences and all borrowers will be fully underwritten, credit checked and affordability calculated (with proven income figures).

Just like 125% mortgages, self cert/liar and interest only mortgages in the UK during the property boom? I think you will remember for some the need to get on the property market overrode common sense in the past. Nothing has changed aprt from the risk is put on us the tax payer and the borrower rather than the builder.

Also I don't really think affordability is really a good indicator when base rates are 0.5%, it is one big gamble.

robtgossard

[FONT=&quot]We probably are at the start of living the U.S. subprime mortgage crisis. History repeats itself, it's just at a faster pace now.[/FONT]

mrjohnmiles

The idea of newbuy is for people who can afford a purchase or a property for arguments sake of 200k but do not have (for whatever reason) the 50k deposit. The government loans 20% and the purchaser needs to show they have the 5% deposit and can afford the repayments.

This is not sub-prime. There is specific lending criteria and to form an opinion on someones ability to repay a mortgage based on the amount of deposit they have amassed is nothing but moronic. I do not understand how people have the audacity to prejudge anyone on here based on financial circumstances, perceived or real. We all have to start somewhere!

leveller2911

mrjohnmiles wrote: »

The idea of newbuy is for people who can afford a purchase or a property for
arguments sake of 200k but do not have (for whatever reason) the 50k deposit.
The government loans 20% and the purchaser needs to show they have the 5%
deposit and can afford the repayments.


Who requires a 25% deposit?, you can get a decent rate with 15% deposit.With a 25% deposit you just get a better rates. Why should the taxpaying public take the biggest risk and not the homebuyer or bank?.

Its not the job of Central Government to meddle with the housing market and the only reason they are doing so is to keep houseprices high and thus people perceive they have increase wealthand will splash out on credit to buy cars,TV,s,kitchens,sofas etc.. Its a deck of cards with no logic to the scheme.

So my question to you is why should the taxpaying public subsidise the private housing market?. This has nothing to do with getting the economy going and producing growth because its all borrowed money, the only true money is the deposit someone has saved up the rest is debt.

kingstreet

mrjohnmiles wrote: »

The government loans 20% and the purchaser needs to show they have the 5% deposit and can afford the repayments

That's Help To Buy. The thread is about NewBuy.

NewBuy allows a 95% mortgage and the builder pays 3.5% of the purchase price into an indemnity fund. The Government underwirtes the fund, covering any losses if it ends up in defecit.

ValHaller

mrjohnmiles wrote: »

The idea of newbuy is for people who can afford a purchase or a property for arguments sake of 200k but do not have (for whatever reason) the 50k deposit. The government loans 20% and the purchaser needs to show they have the 5% deposit and can afford the repayments.

This is not sub-prime. There is specific lending criteria and to form an opinion on someones ability to repay a mortgage based on the amount of deposit they have amassed is nothing but moronic. I do not understand how people have the audacity to prejudge anyone on here based on financial circumstances, perceived or real. We all have to start somewhere!

The lending is not sub prime - but it appears that this is designed to entice people who would be sub prime borrowers.

Which makes it worse than sub prime - because the government are effectively underwriting sub prime borrowing. ie it seems to me that the borrowing is sub-prime although the lending is actually better than prime.

I realise that the discussion could be better held on the House Prices debate forum - except OP wants an answer in relation to his own plans.

Mr._Pricklepants

brit1234 wrote: »

Just like 125% mortgages, self cert/liar and interest only mortgages in the UK during the property boom? I think you will remember for some the need to get on the property market overrode common sense in the past. Nothing has changed aprt from the risk is put on us the tax payer and the borrower rather than the builder.

Also I don't really think affordability is really a good indicator when base rates are 0.5%, it is one big gamble.

Beware people, this brit1234 poster is well known in the Debate House Prices and the Economy section of this board as a bit of a laughing stock. Time after time his ludicrous predictions and assertions have been discredited. You might have noticed his signature is a bit out of date also.

Please do your own research.