CRASH! Required mortgage deposits fall by 75%....

HAMISH_MCTAVISH

Percy1983 wrote: »

Is it the average needed or the average taken?

The average taken will of course be higher as bigger deposits give better rates, my inital plan was to go for 15% until the perfect house appeared.

So the average needed would be what was the amount needed to get a mortgage, now as all providers seem to provide mortgages at 90% then sure the average needed entry point is 10%.

Tosh.

Here's what Robert Peston of the BBC said this morning.....

Right now, it is almost impossible to get a mortgage from a bank if you don't have a deposit equivalent to about 25% or 30% of the value of a house.

Face it Percival, you were very lucky with your timing to get one of the severely rationed mortgages at 10%.

:cool:

Percy1983

Well yes the moons of jupitor where aligned, oh and less importantly I had a spotless credit file and asked to borrow well within my means.

chucky

Percy1983 wrote: »

I had a spotless credit file and asked to borrow well within my means.

That's a good attitude from you. Keep up the good work...

IveSeenTheLight

Percy1983 wrote: »

Is it the average needed or the average taken?

The clue is in the wording.

The government’s home ownership scheme will reduce the average deposit needed to buy a property in England

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Percy1983

IveSeenTheLight wrote: »

The clue is in the wording.


..............................

Sorry but you all keep taking about needs and desires.

All I needed to get a house well within my needs was 10%.

If I desired a bigger house the risk would have been higher to which the bank may have pushed me to 15% or 20%.

To which that need is purely needed to forfill a desire where all I actually needed to buy a house was 10%.

My point is the 20% is out of peoples choice, either directly for better rates or indirectly due to wanting bigger houses.

IveSeenTheLight

Percy1983 wrote: »

Sorry but you all keep taking about needs and desires.

I don't think I have.

Percy1983 wrote: »

All I needed to get a house well within my needs was 10%.

If I desired a bigger house the risk would have been higher to which the bank may have pushed me to 15% or 20%.

There is no prequisit saying you need to upsize (although that might be a better option).

The HTB offers a 20% interest free loan for 5 years.

So lets take a scenario where your 10% would be £10k of a £100k property.
The government will loan you £20k for 0%, you then only need 5% for many schemes to take a 75% mortgage.

You therefore get a mortgage for £75k (as opposed to £90k) and only are paying a £5k deposit as opposed to £10k, so you have the opportunity to invest that £5k elsewhere.

Who knows, you may even turn that £5k into the £20k loan which has to be repaid.

Percy1983 wrote: »

My point is the 20% is out of peoples choice, either directly for better rates

What is wrong with wanting a better rate?

Percy1983 wrote: »

or indirectly due to wanting bigger houses.

What about those renting that cannot scrape together the 10% deposit currently but are paying more in rent than they would equivalently in mortgage payments?

HTB could reduce their monthly outgoings significantly to the point they could save up the 20% loan over 5 years due to lower outgoings.

Percy1983

I get a feeling this could just go round the houses so I am not going to keep going.

I guess the point I am making is, its similar to the mortgages are affordable as all those with them can afford them arguement.

IveSeenTheLight

Percy1983 wrote: »

I get a feeling this could just go round the houses so I am not going to keep going.

I guess the point I am making is, its similar to the mortgages are affordable as all those with them can afford them arguement.

It's not, that's the point.

It's making those who cannot afford to get the deposit an opportunity to get a reduced deposit and lower mortgage whilst contributing to the expansion of property supply.

In essence, its HELPING people TO BUY

It's giving people the opportunity to get off the rental trap and into a new home of their own

Percy1983

IveSeenTheLight wrote: »

It's not, that's the point.

It's making those who cannot afford to get the deposit an opportunity to get a reduced deposit and lower mortgage whilst contributing to the expansion of property supply.

In essence, its HELPING people TO BUY

It's giving people the opportunity to get off the rental trap and into a new home of their own

I am not saying thats not the case, I am challenging the 75% reduction figure.

On a side point the rates look worse on the scheme than they do at 10% deposits so you do seem to get the benefit of a 25% deposit from the look of it,m just the benefit of a lessor deposit.

smamst

Why on earth would FT buyers what want to saddle themselves with massive debt on a last gasp political scam to keep house prices artificially high by over 40% is nothing short of VI desperation.

Banks would easily lend at 95% if house prices were at their correct level, to have a government backed schema to enable 95% mortgages just confirms that house prices are ridiculously overvalued.

Shameful behaviour by the usual suspects here desperate to burden young people with massive debts that WILL take them into negative equity.