Abbey shuts door on 100 per cent mortgages

mr.broderick

Dan: wrote: »

I agree with this

Everyone knows it...they'll just want guarantors etc

bobby-boy_2

overlander wrote: »

i think its now time to save as cash will be king soon.

Hi overlander edited your quote hope you don't mind.

Cash has always been King! Anybody that used cash not credit for their deposit is in a far better position than those that did. Buy things cash and you have no debt.

pinkshoes

carolt wrote: »

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

Hurrah! Common sense at last! If someone can't save a decent deposit for a house, then they shouldn't be buying one!

If they can't save money BEFORE they've got a mortgage, how do they intend to save afterwards??

I think banks should go one further so that people require at least a 5% deposit, perhaps even 10%.

neverdespairgirl

carolt wrote: »

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

:mad:

what a stupid phrase in that report!

thanks for posting it Carol - bye-bye 100%, unlamented....

sarah_elton

overlander wrote: »

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

Slightly sweeping statement don't you think?

I took out a 100% mortgage at 4.2 times my salary in January 2006. It was an HSBC graduate mortgage, and I paid the same booking fee and got the same interest rate as anyone else taking out an HSBC graduate mortgage.

As of today, with repayments and salary increases from two job moves, my LTV is 89% and my outstanding mortgage is 2.6 times my salary. And I've had a lovely little home for the last 2 years. Money was tight at first (as I knew it would be) but now I have plenty left over each month.

Just making the point that not everyone who took advantage of high LTV deals is stupid/sub-prime/was missold to/doesn't think ahead/doesn't budget.

With the way the market's going there is a chance I'll go into negative equity over the next year and I know that. I'm happy to keep hold of the flat (and let it out if HSBC permit if I want to move into my BF's place) till it regains its present value.

Sammz

pinkshoes wrote: »

Hurrah! Common sense at last! If someone can't save a decent deposit for a house, then they shouldn't be buying one!

If they can't save money BEFORE they've got a mortgage, how do they intend to save afterwards??

I think banks should go one further so that people require at least a 5% deposit, perhaps even 10%.

Because there are people out there that "wise up" after getting a mortgage. Because circumstances change? I wasn't the best at saving before getting my 100% mortgage. I had enough for the fees and to get myself some furniture. It was tough at the start but I worked at paying off (small amount) debt and now I'm doing pretty good. Haven't got much savings yet (what I did have was spent on a new bathroom) but I'm going to work on that.

I should add that the 100% mortgage I took wasn't at the amount I was offered. I worked out how much I could afford each month and took a mortgage for that amount.

JimmyTheWig

Presumably this means that cashback mortgages are finished, too?
I first bought in 1999 I got a 95% mortgage with 4% cashback. The cashback paid most of my deposit - i.e. it was basically a 99% mortgage. The cashback tied me in to SVR for 5 years which I wasn't too happy about but accepted as with prices rising like they were in the South East at that time there was no way I could save quick enough to keep up with the increases.
Anyway, with the prices rising so quickly, after 3 months living there I remortgaged onto a discount rate with a new valuation, added the cashback that I had to pay back (because I had remortgaged within 5 years) to my mortgage and still came in under 90% LTV.

Basically my point is that these high deals are fine in a period when house prices are going up, as long as the salary multiples remain sensible.
But in today's market anything above 95% (arguably anything above 90%) seems too high to me.

Hoario54

mr.broderick wrote: »

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

Ohhh no they won't...

HelpWhereIcan

The end of the 100% mortgage was predicted in the early 90s after lenders withdrew them all then.

Granted there were fewer lenders then, but they still made a comeback.

A function of the market and will be be back at some point. In a couple of months maybe not. Next year? quite possibly. 2 years? almost certainly... just my opinion.

Andy_Hamilton

pinkshoes wrote: »

Hurrah! Common sense at last! If someone can't save a decent deposit for a house, then they shouldn't be buying one!

If they can't save money BEFORE they've got a mortgage, how do they intend to save afterwards?? .

I was paying £150 board (living at home) and commuting 100 miles per day too me ticking over. I was rubbish with money and blew every pennie every month.
I wanted to get on the housing market and got this advice, " get a 100% mortgage on interest only then in a couple of years when you house price goes up you will get a much better deal only needing a 60-70% mortgage".

I was a bit smarter than that and saved like nothing on earth for 8 months but I had to pull out:
£1300 fees for buying house
£500 fees for alteration to new house
£1200 carpets and curtains.
£2500 deposit (think thats about right)

That's £5500 just to move in and could have really done without paying the deposit.
That's not to mention keeping alive and keeping a car on the road.
That's

Now that I'm closer to work I save £160 in fuel and £150 in board, ad that to my money my lodger pays my mortgage is efectively free.

I now save over £500 per month and normally £700.

Just because people are not able to save a deposit does not mean they are better off staying in the rut that they are in.