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

cavework

Consumerist wrote: »

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

Things have changed since I got a mortgage in the early 80's


Mortgages are based on risk lending , those who are investors earn when times are good but have finally learned that when times are bad .. they loose.. they can't have it all ways,
Now we have over the top , invasive application questionaires for a mortgage application, these have absolutely no bearing on where the borrower might be in 10, 20 years time.. as no one can predict this,

amnblog

cavework wrote: »

Things have changed since I got a mortgage in the early 80's


Mortgages are based on risk lending , those who are investors earn when times are good but have finally learned that when times are bad .. they loose.. they can't have it all ways,
Now we have over the top , invasive application questionaires for a mortgage application, these have absolutely no bearing on where the borrower might be in 10, 20 years time.. as no one can predict this,

Why is it 'over the top' for a company that is letting you have an enormous sum of money over many years to check what you earn and how you handle your income?

cavework

For the rest of the borrowers life?
Sorry but no amount of caution can cover the next 25 years

danifox6

Please could someone tell me if it is now no longer allowed to offer over the asking price of a house ?! So if on the market for £240 in order to secure it you offer £245, can you still do this please ?

Thanks

Consumerist

danifox6 wrote: »

Please could someone tell me if it is now no longer allowed to offer over the asking price of a house ?! So if on the market for £240 in order to secure it you offer £245, can you still do this please ?

The new mortgage rules only relate to the amount you can afford to borrow. The amount you offer for a purchase is down to the total funds available to you.

caseh

The new system is broken.


Just been refused a mortgage despite my bank account effectively demonstrating I have managed to bank 8k in about 6 months just as my partner has. At which point does being able to bank 16k in 6 months equate to not being able to repay a £700 a month mortgage along with factoring in a percentage increase?


We have no debt, no children and just regular expenses like phone contract, bills etc which simply cannot be avoided.


Hearing advice like don't spend on your bank account for things you don't need for 3 months is possibly the most ridiculous thing I've ever heard. If I decide to buy a coffee, should I be using my piggy bank or do I rob the place instead?


Anyone defending the new system clearly has a mortgage and has done for a while.

matthewinuk

Personally I think it's a disgrace that a bank should be able to ask for so much personal information. The money advice service is suggesting that they will want to see 6 months of bank statements! Mind your own business what I spend my money on! I personally wouldn't take out a mortgage without factoring in the potential for increased repayments in the future.

This kind of attitude suggests that CONSUMERS are to blame for housing market problems and not the OVER-EXPANSION OF CREDIT by irresponsible banks. Credit over-expansion is the cause of such massively inflated asset prices.

These reviews now put me in the position where if I was in the position to go looking for a mortgage, I would simply choose not to because I don't want to expose myself to a bunch of perfect strangers. I mean what the hell next? Strip naked and parade before a bank doctor to assess your general health and ability to work (just in case you go off sick and can't pay the mortgage)? Sounds a bit like living in a concentration camp to me. I wonder which government will be first to suggest building a 10ft high barbed wire fence around the English border to "keep out terrorists" - Labour or Tory?!

Not to mention the fact that the banks create mortgage money "out of thin air"! Someone somewhere is laughing their heads off at all of us, and we keep buying in to their promise of "own your own home". The real fact of the matter is - if we all defaulted you could probably by a house for about £5000 because of the collapse of the credit bubble. If no-one can buy, prices have to drop.

<sebb>

matthewinuk wrote: »

Personally I think it's a disgrace that a bank should be able to ask for so much personal information. The money advice service is suggesting that they will want to see 6 months of bank statements! Mind your own business what I spend my money on! I personally wouldn't take out a mortgage without factoring in the potential for increased repayments in the future.

This kind of attitude suggests that CONSUMERS are to blame for housing market problems and not the OVER-EXPANSION OF CREDIT by irresponsible banks. Credit over-expansion is the cause of such massively inflated asset prices.

These reviews now put me in the position where if I was in the position to go looking for a mortgage, I would simply choose not to because I don't want to expose myself to a bunch of perfect strangers. I mean what the hell next? Strip naked and parade before a bank doctor to assess your general health and ability to work (just in case you go off sick and can't pay the mortgage)? Sounds a bit like living in a concentration camp to me. I wonder which government will be first to suggest building a 10ft high barbed wire fence around the English border to "keep out terrorists" - Labour or Tory?!

Not to mention the fact that the banks create mortgage money "out of thin air"! Someone somewhere is laughing their heads off at all of us, and we keep buying in to their promise of "own your own home". The real fact of the matter is - if we all defaulted you could probably by a house for about £5000 because of the collapse of the credit bubble. If no-one can buy, prices have to drop.

Comparing having to show your bank statements to someone who is going to lend you hundreds of thousands of pounds over many years to a concentration camp is ridiculous. Third world problems eh!

bedfordshireboy

New rules in theory are great and make sense... in practice they are a complete pain in the backside.
I have a completely clean credit history, work for a large high street bank with £30k deposit as a FTB borrowing 4 x salary.
A certain mortgage lender queried every transaction over £100 on my bank statements for previous 12 months for example:
Q 'why did you withdraw £250 cash on July 18th 2013'
A 'no idea'


Q 'you have a £139 payment into your account in February 2014 with the reference as Condoms, do you have an additional income and if so why haven't you declared this?'
A ' one of my mates sent me some money he owed me for a holiday I booked as a group - he was messing about'


Q 'why have you had 2 large transactions for foreign exchange in the past 6 months'
A 'I've been on holiday twice?'


Also - when a 'qualified' underwriter can't understand how a 3 year accumulation of funds in an ISA works, then it's about time we all give up and go home. Yes - I had to draw blood from a stone and still this wasn't sufficient... queue phone calls to 2 previous banks for closed account statements etc etc. 2 week delay.


Eventually got my mortgage offer but what a complete and utter shambles it was from start to finish.

teej0

I am currently selling a property with no outstanding mortgage and using the money to put down as a 50% deposit on a new home.
I have a good credit rating and a good job and I do not live beyond my means.
However over the past year or so I have enjoyed luxuries that come with having no mortgage like holidays, eating out and a large digital TV package.
It is obviously my intention to scale back on these luxuries when I take on my new mortgage, less holidays, eating out etc.
Does anyone know if the bank will take into consideration this fact?
Thanks for the help!