There is something seriously wrong with your industry. Change is needed

HENRY78

Since when did having a roof over your family's head become one of life's luxury's for the few? Somewhere along the line we have seriously lost the plot in this country. Where I live in the home counties in an average town renting is ludicrously over priced. A small one bedroom flat will cost around £800 pcm! A moderate family home would be well over £1000. Plus you need x2 months deposit etc. Mortgage companies really need to wind their neck in when assessing an application . At the end of the day if you default on your mortgage your house will be taken away. We all know this! and people know the risks. As long as you have at least a 10% deposit there is little risk of the banks not getting their money back. I have just been through this ridiculous process where we have a 75% deposit on a £550,000 moderate family home and because my partner is self employed (which the lenders seem to have little knowledge of how it works) we had to provide a ridiculous amount of paper work by believe it or not, Fax?! Its not 1986.


Another point when speaking to an unintelligent mortgage "advisor" at the applications stage the talk about the risks in the future. Eg Rate Increases, Redundancy, Having a baby, becoming ill etc. Then they tell me what I can afford in 2/3 years time?! Who knows what will happen?! For young people desperately trying to get on the property ladder in their early 20's. Their income will likely increase anyway and things "generally" get easier. Point is how are these "advisors" able to predict? and so what? Most people adapt accordingly. It really should be this hard to buy a house in this country.


At the worst time of the financial crisis in 2009 only 1.57% of all mortgages were in arrears. So 98.43% were all up to date. This was at a time where we had self cert & 100% mortgages. Of this 1.57% only a fraction resulted in repossessions. To me that would show a very low risk and I seriously question the FCA and the lenders as to why they are making everything so difficult?


I Cannot believe what was involved and how long the process took for a relatively small loan of 30% LTV. Ridiculous, Slow painful and needlessly stressful.


Something needs to change and fast. I feel so sorry for the younger generation, as things stand only a very few have a chance of owning their own home.

csgohan4

It's not a right to own a home. You can have a roof over your head by renting, been doing that since Uni. Nothing wrong with that, don't need to worry about property maintenance and boiler repairs e.t.c




If you can afford a house good for you, if not save up if you can.

HENRY78

approx. £800 a month for a 1 bed flat in the home counties? There is something seriously wrong with that.

csgohan4

HENRY78 wrote: »

approx. £800 a month for a 1 bed flat in the home counties? There is something seriously wrong with that.

It's the greedy landlords and estate agents you also have to address

HENRY78

Very true. But also the Banks and Building societies making life very difficult with their unnecessary and senseless processes.


I will give you and example....


What relevance does your income from 3 years ago have on your current income if you are self employed? Unbelievably some lenders take this into account, Where is the sense in that?

csgohan4

HENRY78 wrote: »

Very true. But also the Banks and Building societies making life very difficult with their unnecessary and senseless processes.


I will give you and example....


What relevance does your income from 3 years ago have on your current income if you are self employed? Unbelievably some lenders take this into account, Where is the sense in that?

Self income is a different kettle of fish. it is not usually guaranteed than say a permanent post. So 3 years if reasonable and they average it out. What if you had a high year 1 but low years 2 and 3, that raises questions on profitability of your business. Therefore affordability comes into play.

amnblog

The regulator designs the hoops not the Lender.

HENRY78

So if your self employed and you have a baby 3/4 years ago and therefore your income drops in that year (As it does if you are Employed) Your income on the application drops as they take a 3 year average. Where is the logic?

jaxkesa

HENRY78 wrote: »

approx. £800 a month for a 1 bed flat in the home counties? There is something seriously wrong with that.

Sounds like a bargain to me. Try living on the south coast.

jacobtheamish

HENRY78 wrote: »

Very true. But also the Banks and Building societies making life very difficult with their unnecessary and senseless processes.


I will give you and example....


What relevance does your income from 3 years ago have on your current income if you are self employed? Unbelievably some lenders take this into account, Where is the sense in that?

So you don't accept that the financial performance of a business and therefor subsequent income is used for affordability?

Lets say net profit is 50k in 2012, 30k in 2013 and 10k in 2014. Would you lend money in that scenario?

csgohan4

HENRY78 wrote: »

So if your self employed and you have a baby 3/4 years ago and therefore your income drops in that year (As it does if you are Employed) Your income on the application drops as they take a 3 year average. Where is the logic?

There is none except your just a number on a spreadsheet. They don't care if you have other financial commitments or care commitments. All they care is are you a risk for lending a substantial amount of money. I would if I was the bank lending.


I would rather lend someone who is low risk, than someone who has income all over the place, more down than up with lots of debt.


Being able to afford the rent is very different from taking on a loan of 200k isn't? There should be more checks than a reference fee and 2 months rent in advance no?