Is there an exit strategy?

Graham_Devon

GhIFA wrote: »

Because it was a totally made up scenario to try and prove a point which only works through making up an unrealistic situation. Now you are bringing them being a part of a couple into it, in which case the outgoing becomes a lower proportion of total income. The fact that things are tight for first time buyers is the way it's been for generations.

No, I haven't "brought" it in.

It was always there...

Your view on this is they shouldn't have a mortgage or two people should take on a mortgage, which is fine, so the other person is paying for everything else. Still doesn't leave much money. Hence you won't increase FTB's by large numbers just by increasing lending.

Graham_Devon

GhIFA wrote: »

But you can't anymore, which is what made it a pointless example.

Argh!! But to INCREASE lending, you have to make it looser! HENCE you will HAVE to start lending to these people again! (not neccesarily a person on 14k before you whinge)...but people who cannot pass the afforability tests now.

You can't increase lending, without increasing the people you will lend to.

You cannot create people, therefore you have to lend to higher risk people who could be pushed to the edge.

How do you increase the amount of people you lend to otherwise!?

Conrad

Graham_Devon wrote: »

If you increase lending, how do you do it? You have to start lending to those outside of these levels. Those people will be earning less.

see next post

Conrad

Graham_Devon wrote: »

You cannot create people, therefore you have to lend to higher riska sn people who will be pushed to the edge.

I've given plenty of example of the sorts of client currently unable to obtain lending even though these same categories showed an overwhelming ability to sustain a mortgage prior to FSA rule tightening.

Older borrowers, for example divorcees starting over is one such category.

GhIFA

Graham_Devon wrote: »

No, I haven't "brought" it in.

It was always there...

I know, and you disregarded the partner's income in that original post as well in order to make your "it will take 100% of their income for a mortgage they'll never be able to get" point.

OffGridLiving

grizzly1911 wrote: »

On the basis that the majority of people don't have much in the way of savings then (average <4Kfrom memory and only about 25% do) then I would be surprised if it was just a small number. Do the ones that struggle financially own homes?

I'm not sure what savings would have to do with mortgage affordability during interest rate rises, unless the person lost their jobs and had to rely on savings until they gained new employment?

There are always a number of people who struggle financially and end up being repossessed, even during boom times. It's a very small minority of people compared with those who go through their entire mortgage term without difficulties.

Graham_Devon

GhIFA wrote: »

I know, and you disregarded the partner's income in that original post as well in order to make your "it will take 100% of their income for a mortgage they'll never be able to get" point.

No, I said it will take 100% of their income. Therefore, on dual incomes, the other income stream would have to pay for everything else. That's hardly "discarding the second income" now is it. I've even quoted it right above. Do you want me to show you what i said a 3rd time so that you can finaally, maybe, grasp it?

Your view on this is they shouldn't have a mortgage or two people should take on a mortgage, which is fine, so the other person is paying for everything else. Still doesn't leave much money. Hence you won't increase FTB's by large numbers just by increasing lending.

I've put it in bright pink to try and highlight it to you!

You've dont your absolute best to muddle this whole thread.

As an example of your insistance to confuse you even say "you have now bought in" - when infact it was always there in the first place, and on correcting you, you state "I know".

So why suggest I've added it further down the line?

No one stated that someone one 14k would get a mortgage. My whole point was to suggest that 1 income would be completely swalloowed by the mortgage payment and council tax alone, leaving everything else to the other income.

LOADS of people up and down the country are in the position whereby one of the earners earns 14k. I don't know why such a fuss has been made of me stating it.

Not everyone has both earners in a household earning average wage. Lots of households have 2 people earning 14k and so on...

To increase lending you HAVE to start lending ot these sorts of people, as you have to increase the pool of people you can lend to. You can't just magic up new borrowers without increasing your risks and lending to everyday people such as I laid out.

OffGridLiving

shortchanged wrote: »

Bear in mind the huge increase in the number of IO mortgages during the previous decade were a clear indicator of affordability issues.

I'm not sure this has a bearing on our discussion about interest rate rises unless you feel that a significant number of IO mortgage holders have been forced onto repayment mortgages and would not now afford their mortgages if they increased? If they stay on IO mortgages that were arranged pre-credit crunch then we're back to my position that these mortgage holders were already used to higher payments.

Do we have figures that show how large the group of mortgage holders is that have been forced onto repayment mortgages and will now struggle to service their debt when rates rise?

GhIFA

Graham_Devon wrote: »

but people who cannot pass the afforability tests now.

:wall:

Your admin worker can pass an affordability test for a more realistic level of earnings for their £15k salary. No-one can pass one for 10 x their income whateve their level of earnings.

I don't know why you are finding it so difficult to grasp that you cannot make up a completely false scenario to try and make a point, and then compound that by suggesting that this means a completely realistic scenario is therefore unavailable.

Graham_Devon

GhIFA wrote: »

:wall:

Your admin worker can pass an affordability test for a more realistic level of earnings for their £15k salary. No-one can pass one for 10 x their income whateve their level of earnings.

Jeez - how many times does it have to be pointed out to you I never stated or implied single income.

Think you are simply ignoring everything stated to get a rise now, so will leave you to it.