Will the mortgage guarentee go ahead?

grizzly1911

ManAtHome wrote: »

I doubt they'll let the major "stakeholders" (ie taxpayers**) perfrom any audits, and not too sure the back-stopped banks will bother too much (now I like bonuses, and audits should be done (but we have 20% headroom) - there's only one way to find out...).

**The FCA have yet to be proven less incompetent/corrupt than the FSA.

Like all regulators they have feet in many camps and masters in disguise, a bit like the Chuckle Bros "from me to, to you",

Thrugelmir wrote: »

Demand exceeds supply. So lenders can afford to raise the bar to whatever level they wish. Mortgage lending criteria has tightened noticeably in past 18 months. No reason to suggest that there is going to be any relaxation soon either.

As I've said before quite possible that there's going to a reduction in mortgage debt levels of around £250 billion to £400 billion in the coming years. So a long way down the road to go.

I don't disagree but something tells me that this constriction isn't like an Aberdeen bandage (no give) it is and will continue to be stretched.

I doubt we will be back to the hedonistic days any time soon but ambitious politicians have short memories. Debt is the thing that keeps the plates spinning (slowly) so that they drop less frequently.

Graham_Devon

Thrugelmir wrote: »

Demand exceeds supply. So lenders can afford to raise the bar to whatever level they wish. Mortgage lending criteria has tightened noticeably in past 18 months. No reason to suggest that there is going to be any relaxation soon either.

As I've said before quite possible that there's going to a reduction in mortgage debt levels of around £250 billion to £400 billion in the coming years. So a long way down the road to go.

But there HAS been a relaxation. That's the very point of this scheme.

GhIFA

Graham_Devon wrote: »

But there HAS been a relaxation. That's the very point of this scheme.

Not quite - it provides a relaxation in terms of level of deposit, but that is not the only criteria. Just because it facilitates smaller deposits, it doesn't mean that lenders are automatically going to lend to anyone that has the deposit - they will still need to fulfil the lenders' own requirements to be deemed "creditworthy".

There are numerous examples of people who have been able to save the deposits currently required, have sufficient earnings, are currently paying more in rent than they would do in mortgage repayments, but have still had applications turned down because they don't meet other criteria set out by the lender.

grizzly1911

GhIFA wrote: »

Not quite - it provides a relaxation in terms of level of deposit, but that is not the only criteria. Just because it facilitates smaller deposits, it doesn't mean that lenders are automatically going to lend to anyone that has the deposit - they will still need to fulfil the lenders' own requirements to be deemed "creditworthy".

There are numerous examples of people who have been able to save the deposits currently required, have sufficient earnings, are currently paying more in rent than they would do in mortgage repayments, but have still had applications turned down because they don't meet other criteria set out by the lender.

As it partly "removes" one of the hurdles surely it makes it easier?

Quite rightly there are other hurdles.

How long before they start getting smaller? All these green shoots, election looming and all.

GhIFA

grizzly1911 wrote: »

As it partly "removes" one of the hurdles surely it makes it easier?

Quite rightly there are other hurdles.

How long before they start getting smaller? All these green shoots, election looming and all.

It makes it easier, however, Thrugelmir's point, as I understand it, was that many other criteria have tightened recently. Whilst lowering the deposit levels makes access easier, it doesn't loosen these other criteria.

Those people that are refused at a 10% deposit level based on these restrictons are still going to find themselves refused based on the lenders' other criteria. In this respect, easing deposit requirements makes little difference.

As for how long before other restrictions are eased, I have no idea. We still have the conundrum of how banks can increase lending as the government wants them to do whilst maintaing higher capital reserves, as the government wants them to do.

Percy1983

GhIFA wrote: »

It makes it easier, however, Thrugelmir's point, as I understand it, was that many other criteria have tightened recently. Whilst lowering the deposit levels makes access easier, it doesn't loosen these other criteria.

Those people that are refused at a 10% deposit level based on these restrictons are still going to find themselves refused based on the lenders' other criteria. In this respect, easing deposit requirements makes little difference.

As for how long before other restrictions are eased, I have no idea. We still have the conundrum of how banks can increase lending as the government wants them to do whilst maintaing higher capital reserves, as the government wants them to do.

According to Hamish to nothing to do with criteria and its just based on applying at the right lucky second as the moons of jupiter align... or something like that.

As it is its completely right that the lower the deposit the stricter the critera, in our case we applied for just over half of what there where willing to lend us so the application at 10% was no problem. The thought we could afford £155k so of course applying for £83k helped.

grizzly1911

GhIFA wrote: »

I
Those people that are refused at a 10% deposit level based on these restrictons are still going to find themselves refused based on the lenders' other criteria. In this respect, easing deposit requirements makes little difference.

As for how long before other restrictions are eased, I have no idea. We still have the conundrum of how banks can increase lending as the government wants them to do whilst maintaing higher capital reserves, as the government wants them to do.

It is easier for someone who hasn't got sufficient deposit but does meet affordability/creditworthiness criteria.

Yes it is an interesting conundrum perhaps some additional goal posts will be put around the ground.

GhIFA

grizzly1911 wrote: »

It is easier for someone who hasn't got sufficient deposit but does meet affordability/creditworthiness criteria.

Which isn't problem as they are creditworthy and can afford it. The point is that these particular criteria are a lot tighter than they were pre-Financial Crisis. It is demonstrable that in the subsequent years lenders are not "throwing" money at anyone that asks for it - as long as this underlying approach remains (although it is likely that some of the criteria are still overly-restrictive) then it shouldn't be a problem.