New mortgage lending rules come in this weekend

ViolaLass

chucky wrote: »

That's very prudent and sensible.

You're very kind, although that's not actually the point we were discussing...

GeorgeHowell

CLAPTON wrote: »

is there something stopping banks charging higher interest rates to their borrowers and something stopping them from paying higher rates to savers thus increasing the supply of loans?

Apparently yes, otherwise it would be happening wouldn't it.

GeorgeHowell

BillJones wrote: »

The bonuses that you read abut in the papers are paid in investment banks, and are completely unconnected to mortgage lending by retail banks.

My P+L and general performance (i.e. being a good manager, not taking large risks, being available for client meetings etc.) is the main factor in my bonus, as is the case across the investment bank.

There isn't any conceivable route that lending decisions in a retail bank with the same name over the door can feed in to what I am paid (unless they blow up the group), and equally, there's nothing that the retail staff can do to get access to the sort of bonuses paid in the investment bank.

And....

It was not UK mortgage lending that lead to the crash. It was banks having bought US mortgages recklessly.

If they are so separate then why is there the controversial issue of ring-fencing retail banks so they can't get dragged down into the mire ?

optimist68

It's good to question whether a mortgage can be afforded. I know having pizzas or a meal out makes a difference to my budget, but I've been successfully paying a mortgage for many years. My issue with their questions is that they don't suit every situation. My situation is that I need to relocate closer to work, with my children and I can't do so at present because the mortgage company want to record that I will be paying a large fuel bill and high childcare costs (because I do now), even though I won't be when I've moved.

CLAPTON

GeorgeHowell wrote: »

Apparently yes, otherwise it would be happening wouldn't it.

indeed so; it's government intervention and not the free play of supply and demand for money

MABLE

Im sure this new incentive will work as good as the H.I.Ps.

ruggedtoast

Graham_Devon wrote: »

I can't quite believe that should you have a "takeaway friday" that you will be declined for a mortgage. Just seems totally absurd.

There is, it seems, a lot of what could be hyperbole being shouted by those in the industry who don't want to see the changes take place.

I mean, seriously, the only way they are going to be able to tell what we have spent on say takeaways is by relying on the fact we pay by debit card. What if we use Just Eat and pay via paypal? Still comes out of the bank, just as an unknown paypal transaction.

Just think theres a lot of shouting from vested interests and therefore a lot of hyperbole about people being refused a mortgage if they have the audacity to eat out a couple of times a month.

It will likely impact mortgages, sure, as that's the point, but the impact will be felt most likely be those who can least afford the mortgage.....not those who simply have a mobile phone contract.

Again, articles talk about applicants being rejected if they have a smartphone. How on earth will the bank know you have a smartphone? They know you pay a mobile phone company and that is it.

I think you could do with a few less takeaway Fridays Graham. And Mondays and Tuesdays and Wednesdays. Your posts of late have been losing their fire and fury and I can only assume it is because you are becoming rather plump.

Percy1983

optimist68 wrote: »

It's good to question whether a mortgage can be afforded. I know having pizzas or a meal out makes a difference to my budget, but I've been successfully paying a mortgage for many years. My issue with their questions is that they don't suit every situation. My situation is that I need to relocate closer to work, with my children and I can't do so at present because the mortgage company want to record that I will be paying a large fuel bill and high childcare costs (because I do now), even though I won't be when I've moved.

It is an interesting case.

I wonder if they will ask what your expected finances are and ask questions why it doesn't fit with your current situation.

I suppose it comes down to how much weight this analysis adds in the application process, it could just put a stop to things in extreme cases.

chucky

Percy1983 wrote: »

It is an interesting case.

I wonder if they will ask what your expected finances are and ask questions why it doesn't fit with your current situation.

I suppose it comes down to how much weight this analysis adds in the application process, it could just put a stop to things in extreme cases.

This whole additional process will come at a cost. It will be an extra over head for a lender.

Those that want this process will be the ones complaining about more expensive mortgage fees.

GeorgeHowell

CLAPTON wrote: »

indeed so; it's government intervention and not the free play of supply and demand for money

As has been said before this is an exceptionally exceptional time with record low bank rate for so long and the government pumping in cheap money to the banks. Ostensibly it fuels the recovery, but it has the useful little side effect of keeping mortgage rates low in the run up to an election.


But the forces of supply and demand still come into play and the outcome has been HPI out of proportion to CPI. Higher rates might keep price increases down but whether mortgages became more or less affordable would depend on the actual arithmetic.