MSE News: New mortgage rules: How do they affect you?

hanlou007

They want borrowers to behave responsibly but go on the Santander website and doa quote for 'How much can i borrow' and it will ask you to include 'Bonus/Overtime' and 'Other Income (child benefit)'.......

None of these are a given income and that shows how irresponsible lending is still going on !!!!

Consumerist

hanlou007 wrote: »

They want borrowers to behave responsibly but go on the Santander website and doa quote for 'How much can i borrow' and it will ask you to include 'Bonus/Overtime' and 'Other Income (child benefit)'.......

None of these are a given income and that shows how irresponsible lending is still going on !!!!

In truth, you could lose your job and have no earned income at all. So where do you draw the line?

cavework

Or you could get the mortgage ... then go on a spending spree with your credit cards to furnish the new property... or even 5 years down the line get a second mortgage.
Perhaps now is the time for lenders to employ fortune tellers to make sure their money is safe?

Consumerist

cavework wrote: »

. . . Perhaps now is the time for lenders to employ fortune tellers to make sure their money is safe?

They've been there, done that and got the T-shirt. It led to the financial crash.

Pincher

It's a salmon spawning race, not everybody makes it to the top, i.e. home ownership, and then breeding a brood of brats, who will come back to try the same thing 30 years later.

The ones that don't make it don't turn back to the sea, they die trying. If you close one way of getting money, they will find another, and the insanity of what they do is simply proportional to the desperation.

Instead of lending based on risk, and let some people fail, which is also giving other people a chance to make it, this is just some perverse equivalent of: "You should only marry a doctor/lawyer/accountant".

clar

It will affect single parents with children that's for sure.

One one hand, childcare costs are taken into account and reduce the mortgage available, but child maintenance paid to the single parent by the 'absent' parent isn't taken into account for affordability purposes (up until now lenders would say something like 'it's not sustainable over the entire term of the mortgage). Also, some lenders don't consider Child Benefit either. And they deduct childcare vouchers from income, but they don't reduce childcare expenses accordingly.

Surely childcare costs aren't payable over the entire term of the mortgage either (in fact they end when kids are 11, even though child maintenance and child benefits will be received for longer)?

So it's a double standard...

Thrugelmir

cavework wrote: »

Or you could get the mortgage ... then go on a spending spree with your credit cards to furnish the new property... or even 5 years down the line get a second mortgage.
Perhaps now is the time for lenders to employ fortune tellers to make sure their money is safe?

Data collected by the CRA's combined with personal data allow lenders to make fully informed decisions at the outset. Not 100% perfect but reduce potential risk to an acceptable level.

Thrugelmir

katejo wrote: »

I have never had the slightest difficulty paying my mortgage.

Over optimism is the root cause of many of the tales posted on this forum. Until it happens to you then there never is a problem. People cannot be trusted to use their common sense.

coffeeandfags01

I have had an interest free mortgage for 10yrs, I have made several overpayments and it is now quite small (less than 80K). Because I am more financially secure now, I thought I would do the sensible thing and switch to full repayment. My financials were not gone through with a fine toothcomb, which is a shame as my provider (Halifax) refused my application. Had they asked for evidence of my outgoings I would have proved that I could afford the increase in monthly payments. The advisor wasn't even sure how to use the new system installed to make the assessment and had no alternative options to offer me. It seems I am now 'stuck' with an interest only mortgage.

kingstreet

coffeeandfags01 wrote: »

I have had an interest free mortgage for 10yrs, I have made several overpayments and it is now quite small (less than 80K). Because I am more financially secure now, I thought I would do the sensible thing and switch to full repayment. My financials were not gone through with a fine toothcomb, which is a shame as my provider (Halifax) refused my application. Had they asked for evidence of my outgoings I would have proved that I could afford the increase in monthly payments. The advisor wasn't even sure how to use the new system installed to make the assessment and had no alternative options to offer me. It seems I am now 'stuck' with an interest only mortgage.

Make overpayments when you like. Changing to repayment only formalises what you can do voluntarily now if/when you choose.