Advice re 95% Mortgage and Bankruptcy

kingstreet

No. It was 95% on NewBuy, with the builder paying 3.5% of the purchase price for the guarantee.

Salander

I hope it goes ok for you!

John1993_2

droiderm wrote: »

Surely, from your experience, you must realise you must be in possession of those facts to raise a judgement?
I think your bitter about recently losing money to a bankrupt in your other thread.

Ah, I can see the issue here. The above suggests that you are mixing personal feelings with financial decisions, and assuming that I do too. That's never, ever a good idea, and I counsel strongly against it. Rational business decisions are not personal, and if you bring feeling into it, it means that you need to step away.

So no, my view on the rationality of lending 95% mortgage, even to people with a beautiful sqeuaky-clean history, is that it's a bad idea, and it's independent of my losing money to a perfectly solvent non-bankrup friend who thought it acceptable to put a nice car ahead of honour.

It's not only the lender who I'd counsel against such activity, either. I'd also suggest that borrowers, if they've really "turned their lives around" be a little more cautious and wait until they had a 10-15% deposit before rushing into debt for the purposes of property speculation (which is precisely what a mortgage is).

BargainMad_3

kingstreet wrote: »

No. It was 95% on NewBuy, with the builder paying 3.5% of the purchase price for the guarantee.

Ah so it was NewBuy rather than HomeBuy.


Crucially, though, the lender is still being protected against possible losses.


I think without any of these schemes a discharged bankrupt wouldn't have got a 95% mortgage with no conditions attached.

That's just my opinion based on many years of knowledge of the prime and sub-prime mortgage markets and what drives them !

kingstreet

BargainMad wrote: »

Ah so it was NewBuy rather than HomeBuy.


Crucially, though, the lender is still being protected against possible losses.


I think without any of these schemes a discharged bankrupt wouldn't have got a 95% mortgage with no conditions attached.

That's just my opinion based on many years of knowledge of the prime and sub-prime mortgage markets and what drives them !

I tend to agree.

Hence;-

I don't know anyone who would confidently state a lender offering 95% would offer a straight 95% mortgage to a discharged bankrupt.

with straight 95% meaning free of guarantee/indemnity.

BargainMad_3

That's just it. I only had a cursory glance through this thread and it seemed to imply that 95% mortgages are possible to discharged bankrupts with no conditions attached.

But homebuy/newbuy are in fact "conditions" per se. Without them, there would be no mortgage granted !

droiderm

John1993 wrote: »

It's not only the lender who I'd counsel against such activity, either. I'd also suggest that borrowers, if they've really "turned their lives around" be a little more cautious and wait until they had a 10-15% deposit before rushing into debt for the purposes of property speculation (which is precisely what a mortgage is).

The debate about the British obsession with home ownership is a completely seperate one, as is the cost/benefit differences between renting for a long period of time versus buying. Either way I appreciate your all be it, late counsel, but as you may suspect it won't make a jot of difference.

droiderm

BargainMad wrote: »

That's just it. I only had a cursory glance through this thread and it seemed to imply that 95% mortgages are possible to discharged bankrupts with no conditions attached.

But homebuy/newbuy are in fact "conditions" per se. Without them, there would be no mortgage granted !

Not sure anyone actually said that.

I said earlier in the thread, regarding my NewBuy offer

I mentioned earlier , it is newbuy. The builder and lender put 8 percent in a pot I believe for 3 years. So in some respects, it's not strictly 95 percent, which may effect the rate.

Either way, I would still like to see what happens when someone applies for a Save To Buy.

droiderm

John1993 wrote: »

Ah, I can see the issue here. The above suggests that you are mixing personal feelings with financial decisions, and assuming that I do too. That's never, ever a good idea, and I counsel strongly against it.

John, your killing me again.

But you borrowed money to your friend. Isn't that mixing personal feelings with a financial decision?

John1993_2

droiderm wrote: »

John, your killing me again.

But you borrowed money to your friend. Isn't that mixing personal feelings with a financial decision?

I mean don't bring feelings into the question whether a deal makes financial sense. Lending money to him never made sense from the very beginning as a rational business deal, but that isn't why it was done. I lent money to someone who needed it based on moral, not financial considerations.

If a bank or building society decided to bring moral considerations into its lending ("Well, we know it'll never be paid back, but you are a lovely young couple, and it'd make you awfully happy, so go on then") then I hope that they'd be very clear with their stakeholders first that they'd started acting as a charity rather than a company operating for the purposes of profit.

And sorry for the upcoming bit of pedantry (I really am) but as a rates trader this really does kill me...

I didn't borrow him money, I lent it. I lent, he borrowed.