"Affordability" - the new endowment?

CYBERCIDERSAVER

Mr brod. It is actually the Monty Hall problem as has been suggested, but I love your suggestion. That's a great way of ensuring whoever answers gets it wrong!!! cool!!

BTman

I for one will be bloody annoyed if there is a mis-selling scandal in the future like endowments are today.
I personally know that I can not afford a house at the moment, so I am waiting until I can.
I know many who have stretched their finances to the limit to buy property.
How unfair would it be if those people get "let off" some of their repayments but somebody sensible like me, who waited until they could afford it got nothing..?

If people are a bit thick and can not work out what their repayments would be after the fixed rate, or if interest rates go up to say 8% they should ASK...

sm9ai

meanmachine wrote: »

So last year the Alliance and leicester would lend me X amount, based on affordability.

Let's say, for simplicity's sake £200,000.

Interest rates were at 4.5%

TODAY, interest rates are at 5.75%. My personal "affordability" is much worse.

And yet, lo and behold, A&L are now prepared to offer me £205,000.

Nothing to do with my personal ability to pay - and everything to do with A&L desperately wanting to lend more money.

It's a scandal. AM I right brothers and sisters?

You are most definitely right. (Here comes the calls of I just a doom and gloomer!)

The banks and big business will kill off life as we know it.

On another note, did anyone read the article in the telegraph on Sunday about the apartments in Colchester which sold for £225,000 to £250,000 when new and a year or so later went for £145,000 at auction. The thing is even at £145,000 most peoples who work in Colchester would struggle to afford it.

patchwork_cat

I don't know the personal cicumstances of the OP, but I feel that affordability is harsh. We had debts on a credit card at really low rates and for life of balance, but now that our current mortgage is coming to the end of term, we don't want to borrow anymore, but have been forced by affordability calculator to move our debt from credit card to mortgage or we can't get a mortgage. I am seriously pi**ed off we now have to move an unsecured debt to secured despite a really good credit rating and never missing a payment on either mortgage or cards.

Gorgeous_George

BTman wrote: »

...but somebody sensible like me, who waited until they could afford it got nothing..?

Sadly, it doesn't work like that and you will get something. Higher prices, higher interest rates and/or higher taxes to name but a few.



GG

BTman

Fair comment GG, but why the smiley?

nelly_2

eatmyfish wrote: »

Again, another personal insult, I have a different viewpoint therefore I'm a troll?
Who made you the police of internet?

I did so nerr

Gorgeous_George

BTman wrote: »

Fair comment GG, but why the smiley?

I nearly always sign off with a smiley.

GG

kenshaz

RHemmings wrote: »

It isn't an either-or case, where the fault is solely that of the lender or the borrower. Both can be at fault where an inadvisable loan is made. But the lender is in the business of making loans and should be expected to know what they are doing more than the typical borrower.

The borrower only has his wits and this site to protect him/her ,the lender has whole teams of marketing consultants with the sole intention of presenting a package and extracting the maximum profit.Therefore legislation must protect the consumer ,education and information is the key,financial institutions love confusion and complacency,so lets not blame the borrower totally yes they have a responsibility but so does the lender.
This thread reflects the fundamental ethics of this site.:)

Generali

As much as anything else, the lender has a responsibility its to shareholders (the owners) not to loan too much money which is unlikely to be repaid.

That keeps a lid on marginal lending as much as anything else.