Just to Make Things Completely Clear

Generali

antrobus wrote: »

What you really want is for lenders to be able to lend to people who don't meet the affordability criteria. From an economic perspective, there is nothing particularly wrong with that so long as you recognise the risk and price it. But in order to price the risk properly, you would still need to verify the customer's income in order to asses the risk properly.

And the risk adjusted rate would make the mortgage unaffordable :money:

antrobus

Generali wrote: »

Bank owners don't like default rates to rise. Also repos are expensive to deal with and a PITA. Default is in itself a risk.

To state the obvious. (Well someone has to.:))

Banks seek to make profits from lending people money. As in actually having loans where their customers make their repayments on time. From a bank's perspective, there is no point in lending money to someone unless you think they can meet their repayments, even if you have no risk of loss because of the security held for the loan.

padington

If you could mortgage your main home to buy outright your buy to let flat, would this help lower the tax bill with the new tax rules ?

cells

padington wrote: »

If you could mortgage your main home to buy outright your buy to let flat, would this help lower the tax bill with the new tax rules ?

no

.........

padington

cells wrote: »

no
.

So the tax only is charged on outright owners too ?

mwpt

padington wrote: »

So the tax only is charged on outright owners too ?

It's not a freaking tax!!! It is a reduction in tax relief that out of landlords, only the leveraged ones get. That is why gross yields are so low now because in many cases the only way to run a profitable BTL business is to use leverage. The system incentivises debt.

And that is a problem. Cells likes to argue that debt is the "right" of any business owner. He is entitled to his opinion but my opinion is that leverage should be a semi equaliser, a way to take a bit of risk and expand your business, not a requirement for running your business. Cash rich should naturally enjoy benefits over leveraged, because otherwise clearly the incentives are wrong.

padington

mwpt wrote: »

It's not a freaking tax!!! It is a reduction in tax relief that out of landlords, only the leveraged ones get. That is why gross yields are so low now because in many cases the only way to run a profitable BTL business is to use leverage. The system incentivises debt.

And that is a problem. Cells likes to argue that debt is the "right" of any business owner. He is entitled to his opinion but my opinion is that leverage should be a semi equaliser, a way to take a bit of risk and expand your business, not a requirement for running your business. Cash rich should naturally enjoy benefits over leveraged, because otherwise clearly the incentives are wrong.

The United Kingdom was created by debt. Edward the 1st would never have been able to unite the kingdom and keep the French at bay if it wasn't for the massive loans given to him. If we left life to the cash rich United Kingdom wouldn't be united. There should be room to support good causes.

What is a good cause however is debatable but maybe a good way is to leave that up to those that are cash rich to decide where to lend there money freely but modify anti social behaviour through taxation.

chucknorris

stator wrote: »

It's good isn't it?
Over levereged debt based businesses are what caused the credit crunch and housing crisis. There should be huge penalties for trying to run a business that way.

There are huge penalties, surely 'over leveraged' must be defined as a business that is so burdened with debt that it cannot survive. Don't you consider that a business going bust is a huge penalty? If it doesn't do bust because of the debt, then how can it be over leveraged?

chucknorris

Generali wrote: »

I realise it's OT but I work part time (three full days) and I love it. I really enjoy my job which helps but working three days a week is fantastic, it gives me a great balance in my life.

Last Friday I handed my notice in to resign (retire) this December, I know that it is the right decision, because since doing it, I have found an inner calmness.

Generali

chucknorris wrote: »

Last Friday I handed my notice in to resign (retire) this December, I know that it is the right decision, because since doing it, I have found an inner calmness.

Nice one Mr N. My mum retired a few years back and now can't work out how she ever found time to work!

Her OH messes about with old cars. He runs a pre-WW1 sports car among other things!