Abbey shuts door on 100 per cent mortgages

carolt

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3700308.ece

Bank is the final major lender to withdraw 100% deals, leaving buyers without a hefty deposit out in the cold.

Abbey, the last major lender to offer 100 per cent mortgages, has announced it will withdraw its product from the market tonight, shattering first time buyers' chances of getting on the property ladder.
The UK's second biggest mortgage lender will stop offering mortgages to those who have less than a 5 per cent deposit from 10pm tonight.
Abbey, which is responsible for one in ten mortgages in the UK, said the change was "a normal approach given the current market conditions," and said it was "in line with recent moves by other lenders."
All major lenders have now withdrawn deals offering to lend home buyers the full value of their property. Borrowers who took out a 100 per cent deal in recent years will also be hit when they come to the end of their mortgage. Instead of shopping around for a new, competitive deal, they will be forced to stay with their existing lender. In many cases they will have to pay their lenders expensive standard variable rate (SVR).

carolt

Absolutely.

overlander

Taking on a 100%-125% mortgage you really should not have been allowed out the house with money in the first place. :rotfl:

Andy_Hamilton

Al_Mac wrote: »

Shouldn't have been allowed in the first place. 10% should be the rule by law and not from a loan either.

I took out a 97% motgage and because I was a risk I got charged 1.6% (£1315) higher lender fees taking me to a morgage of 98.8% mortgage. From this sort of news, people in my situation have already accepted as a customer then stung for being the same customer.

I have my head screwed on and want to get under 90% by next feb (£7K extra to save) but if house prices drop I'm in an even worse position.

Not wanting to start an argument, I just see the future quite bleak, even worse for my neigbours who have brand new cars and extra debt.

tomstickland

shattering first time buyers' chances of getting on the property ladder.

I think they mean "shattering unsustainable and unrealistic chances". Or "shattering the chances of those without a deposit".

overlander

Hi Andy,

The best thing you can do is save as much as possible and cut down any other debt. Depending on how fast and deep the crash is will determine if you fall into negative equity. I would extend that advice to anyone i think its now time to save as cash will be king soon.

Sammz

I'm glad they did offer 100% as I'd have been waiting a long time to get a mortgage.

mr.broderick

Thing is they'll be back again in a few months...

Andy_Hamilton

overlander wrote: »

Hi Andy,

The best thing you can do is save as much as possible and cut down any other debt. Depending on how fast and deep the crash is will determine if you fall into negative equity. I would extend that advice to anyone i think its now time to save as cash will be king soon.

No debt, £27K wage, £3K from lodger and saving every spare pennie whilst trying to live also running an 8 year old car with 210,000 miles but it's free. Like I said I'm a lucky one and have a master plan to me mortgage free in 10 years.

Not sure how "the crash" will effect my house as it's a new build which I bought at 66% market value. Just got to wait and see but I hope it gets me through my mortgage renewal next jan-feb as I have no plans to sell my HOME.

Dan:_4

mr.broderick wrote: »

Thing is they'll be back again in a few months...

I agree with this

Gonzo

I'm certainly not going to have a go at people who took 95%+ mortgages, because I did as well. In fact, I think we borrowed most of the deposit off a credit card!

I got lucky due of HPI, but I was just as clueless then, a lot of people (me included) have only learned better from experience, and I have an IQ of 140, so I'm certainly not an idiot (which I've seen hapless people on here called). Hindsight is a wonderful thing, and a lot or people have benefited from it on these forums, whether they'll admit it or not. Some recent buyers unfortunately, will learn an expensive lesson, but I can't help but think "There but for the grace of God go I....". If everyone keeps telling you house prices can only go up, why would you deliberately seek information to the contrary?

100% mortgages - definitely a bad thing nowadays - but historically? Maybe not. Let's not have a go at people though, who weren't lucky enough to have been buying 6 or 7 years ago. Let's just dispense the best advice we can. FWIW, I don't think HPI is a good thing, but it's there nonetheless.

What was the point of this thread again? I get a bit lost in my own little thread sometimes...