Affected........

han2505

Is anyone else getting affected by Northern Rock? Is this right what they can do?

Basically were meant to be exchanging contracts this week, we were still waiting for the mortgage offer and they said it was fine that everything was going through, we are buying a new build and is due for completion first week in October.

Got a phone call today saying that with everything that is going on with Northern Rock most mortgage companies are changing their affordability criteria.
So I now have to pay off my car loan by the end of the week or they will pull out.

Can they all of a sudden change it all? Am I right to be worried now?
Luckily spoke to my mum and she said she would pay the loan off for me, so will just pay her back.

Just feel so upset that it has gone on this long and then to be told well actually if you don’t do it then you cant have the house.

Thanks for listening

Han x

WTF?_2

han2505 wrote: »

Is anyone else getting affected by Northern Rock? Is this right what they can do?

Basically were meant to be exchanging contracts this week, we were still waiting for the mortgage offer and they said it was fine that everything was going through, we are buying a new build and is due for completion first week in October.

Got a phone call today saying that with everything that is going on with Northern Rock most mortgage companies are changing their affordability criteria.
So I now have to pay off my car loan by the end of the week or they will pull out.

Can they all of a sudden change it all? Am I right to be worried now?
Luckily spoke to my mum and she said she would pay the loan off for me, so will just pay her back.

Just feel so upset that it has gone on this long and then to be told well actually if you don’t do it then you cant have the house.

Thanks for listening

Han x

To be fair, it was only due to their overly lax criteria that you were able to get a loan from them in the first place.
It's nice that your mum is bailing you out on this occasion to help you get hundreds of thousands of pounds into debt that even you mortgage company now think you can't afford. Will she be able to do likewise throughout the 20 or so years that you will be making monthly payments on the mortgage?

han2505

It's not like that at all. Think was a bit harsh!!!

We can afford it as we have taken into account the interest increases as well. It's not as though it was amazingly tight to begin with.

We are only young and wanting to get on the property ladder before we cant at all. We are also doing it on my wage at the minute (the affordability that is) and i have got another job as i am relocating which is another £3000.00 to what i am on at the minute. So there is a bit more money we havnt counted as well.

I wonder why people cant be happy for younger people who actually want to get on the property ladder?!?

WTF?_2

han2505 wrote: »

It's not like that at all. Think was a bit harsh!!!

We can afford it as we have taken into account the interest increases as well. It's not as though it was amazingly tight to begin with.

We are only young and wanting to get on the property ladder before we cant at all. We are also doing it on my wage at the minute (the affordability that is) and i have got another job as i am relocating which is another £3000.00 to what i am on at the minute. So there is a bit more money we havnt counted as well.

I wonder why people cant be happy for younger people who actually want to get on the property ladder?!?

I agree I was harsh, but believe me being faced with unaffordable monthly repayments and the prospect of repossession somewhere down the line will be a pretty harsh experience too.

For years now, borrowing has been unrealistically cheap and easy and it's this that has played a large part in pushing house prices up to the levels where they are now at.

Now risk is finally being priced realistically in loan transactions. If the only reason you are now able to get a mortgage is because a 'guardian angel' is going to swoop in to clear existing debts then you should think very carefully about getting into the market at this time.

gemma.zhang

'For years now, borrowing has been unrealistically cheap and easy and it's this that has played a large part in pushing house prices up to the levels where they are now at.'

I would think the other way around.. Coz the property price is rising months by months, therefore, young people would be trying all they can to get on the ladder, even risking taking amount beyong their limit !!!...

Well.. To be honest, I certainly CANNNOT afford a house with my own salary in London, despite I am earning average salary here (32k). I do think people normally buy house when they are settled/married/extending houses. which will take into account two people salary, if it's calculated with joint salary, the repayment is all affordable for two salaries.

han2505

I know what you mean and i am really grateful to my family for helping us to get on the ladder and if it hadnt have been for them then i doubt we ever would. We are both sacrificing a lot to get this house. I am relocating away to somewhere i dont know and we wouldnt just jump into this if there was a chance that we might lose it somewhere down the line.

We were told at the time that we could have the mortgage afford it with our loans and then all of a sudden this has changed. We dont see why or what for though. Why say yes with the loans to then change their minds?

My family are helping both of us out as they are all frightened that we are never going to actually be able to get a house and they have sat down with us and seen if we can afford it or not and so thats why i dont think they mind helping us now. They have seen how much we want it how much we have fought for this house to be suddenly shot down 3 weeks before completion of the house.

I think that if it was your children, just as i would, you would help them as well!

han2505

gemma.zhang wrote: »

'For years now, borrowing has been unrealistically cheap and easy and it's this that has played a large part in pushing house prices up to the levels where they are now at.'

I would think the other way around.. Coz the property price is rising months by months, therefore, young people would be trying all they can to get on the ladder, even risking taking amount beyong their limit !!!...

Well.. To be honest, I certainly CANNNOT afford a house with my own salary in London, despite I am earning average salary here (32k). I do think people normally buy house when they are settled/married/extending houses. which will take into account two people salary, if it's calculated with joint salary, the repayment is all affordable for two salaries.

I agree with that. We are taking more risks and to me it will be worth it. I think that all people struggle in the first few months of moving in, and there isnt one person who i have spoken to who has had a easy time of getting a mortgage.

WTF?_2

han2505 wrote: »

I know what you mean and i am really grateful to my family for helping us to get on the ladder and if it hadnt have been for them then i doubt we ever would. We are both sacrificing a lot to get this house. I am relocating away to somewhere i dont know and we wouldnt just jump into this if there was a chance that we might lose it somewhere down the line.

We were told at the time that we could have the mortgage afford it with our loans and then all of a sudden this has changed. We dont see why or what for though. Why say yes with the loans to then change their minds?

My family are helping both of us out as they are all frightened that we are never going to actually be able to get a house and they have sat down with us and seen if we can afford it or not and so thats why i dont think they mind helping us now. They have seen how much we want it how much we have fought for this house to be suddenly shot down 3 weeks before completion of the house.

I think that if it was your children, just as i would, you would help them as well!

What has changed is the attitude towards loaning money. For the last five or six years, market lenders have taken an increasingly laissez-faire approach to handing out their money. This has filtered down to the consumer level.

In the wake of what is happening in the US and what has happened to Northern Rock, UK lenders are taking a look at their criteria for lending and toughening them up to reduce the risk that they will lend to people who cannot repay the loan.

This is actually good for the consumer too as many people had assumed that if they could borrow money to a certain amount, they would be able to afford to repay it because 'otherwise the bank wouldn't have loaned it to us'. It will probably save many people getting in over their heads although really they should be doing the sums themselves.


What I'm saying is that if you can only just make the tougher criteria for borrowing because of a third party intervention, you should really consider if you want to take on the debt.

House prices cannot keep increasing the way that they have been doing and in fact it's quite likely that they may be about to finally fall for a sustained period of time.


Do you really want to stretch yourself with a huge financial commitment to buy an asset that may well be about to drop in value?

pollyanna24

Fingers crossed for you getting your house.

Just thought I'd mention, I found it easy getting a mortgage 18 months ago. Not that that's got owt to do with your post, just thought I'd comment on you saying that nobody finds it easy getting a mortgage.

han2505

I know some people will probably be fine about getting mortgages just all the young people are struggling and i am beginning to lose hope now

pollyanna24

I'm young! Tsk tsk!