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  • FIRST POST
    Former MSE Lawrence
    'Are mortgages & credit too easily available or too hard to get?' poll discussion
    • #1
    • 18th Jan 11, 2:49 PM
    'Are mortgages & credit too easily available or too hard to get?' poll discussion 18th Jan 11 at 2:49 PM
    Poll started 18 January 2011:

    Are mortgages & credit too easily available or too hard to get?

    We've had a credit crunch which means credit scoring's got tougher and mortgages, credit cards and loans are harder to get especially at cheap rates. Yet a chunk of the blame of the economic crisis that caused the crunch was over-lending to people who couldn’t repay.

    Which of these stark choices is closest to your view on the availability of credit?

    It needs to be easier to get cheaper borrowing

    It's roughly about right now
    Cheap borrowing is too easily available

    Please vote here or click 'post reply' to discuss below. Thanks

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Page 1
    • MSE Martin
    • By MSE Martin 18th Jan 11, 6:39 PM
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    MSE Martin
    • #2
    • 18th Jan 11, 6:39 PM
    • #2
    • 18th Jan 11, 6:39 PM
    Im fascinated by this poll - I vascillated myself on what to answer - so it'll be really interesting to see how it turns out.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.

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    • Angel_Jenny
    • By Angel_Jenny 18th Jan 11, 6:50 PM
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    Angel_Jenny
    • #3
    • 18th Jan 11, 6:50 PM
    • #3
    • 18th Jan 11, 6:50 PM
    I think it depends what you want. I couldn't get a mortgage on my wage that was enough to actually buy a house but could have just over a year ago. At the same time the bank offers me either a loan, a credit card or an overdraft every time I go in.
    If you love life, life will love you back.
    • MothballsWallet
    • By MothballsWallet 18th Jan 11, 6:52 PM
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    MothballsWallet
    • #4
    • 18th Jan 11, 6:52 PM
    • #4
    • 18th Jan 11, 6:52 PM
    Im fascinated by this poll - I vascillated myself on what to answer - so it'll be really interesting to see how it turns out.
    Originally posted by MSE Martin
    Do you mean this?

    To answer the question, I've probably missed out on some of your recommended low interest rate deals because I'm not on a great salary right now (temping isn't good for your bank balance, I'll tell you that), and some of the providers you mention have minimum income limits on their deals.

    Fingers crossed that employment status will change soon
    Always ask yourself one question: What would Gibbs do?

    I live in the UK City of Culture 2021
    • udydudy
    • By udydudy 18th Jan 11, 7:21 PM
    • 551 Posts
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    udydudy
    • #5
    • 18th Jan 11, 7:21 PM
    • #5
    • 18th Jan 11, 7:21 PM
    I did vascillate as well, because it depends on which view point you look at it from. Personally I believe cheap borrowing should be available and lending criteria should be lenient. The bankers job is to assess risk and if a person has shown responsible borrowing then lending should be easily available to such people.

    The other view point would be that cheap lending helps people get into debt. but then is that a bankers responsibility?? Should it not b ethe consumers responsibility. I see no reason why a person who is paying say 1400 as rent(london rents) for a 3 bed house on his current salary, even if it is 60% of his or her net salary,should not be able to borrow as much as would allow him to buy his or her own house.

    This would assist in a sort of forced saving as an asset is being created. Obviously if the person is paying rent then he/she can afford to pay a similar amount in mortgage.

    Why should a responsible borrower suffer for the mistakes/carelessness of the few irresponsible ones?
  • misssammyantha
    • #6
    • 18th Jan 11, 7:35 PM
    • #6
    • 18th Jan 11, 7:35 PM
    My parter and I found it very easy to get a mortgage promise when we were enquiring last year. It's the deposit which is harder to get together. But to quote the lender who we got our mortgage promise through "it's more difficult to open a current account than it is to get a mortgage". So maybe lending is still too easy.
  • babybutton666
    • #7
    • 18th Jan 11, 9:21 PM
    • #7
    • 18th Jan 11, 9:21 PM
    being a student i find it an absolute nightmare to get credit anywhere - the conditions of most store cards etc are no unemployed and no students - although in places it pays to have a store card as it works like a loyalty card (like in bhs) - so as i shop there often i feel like im being ripped off and excluded from their "club" because i dont qualify. Then you have credit cards and airmiles - while others enjoy these benefits i'm once again excluded. Then it comes to christmas - i have kids so when the student loan runs dry at the start of december and get no more until mid january it would be handy to use the plastic and pay it off in january but i can't do that. 15 years ago, unemployed no previous job on income support i could get any credit card i wanted but times have changed! now i cant even apply for one let alone be turned down for one!
    Tried to buy something in currys a few years back and couldn;t get store credit due to the no income from a job but because i cant get credit now (i cut up my credit card about 9 years ago when they decided to start charging me 35 a year because i wasn;t using it) then when it comes to getting credit after i qualify then it will be more dfficult as i do not have any kind of long term credit they can look. I think credit should be a lot easier to get but based on realistic income - while students are mainly unreliable borrowers, it would be good to have a card which would even just let them have 200 - not enough for them to extend their debt ridiculously, but enough to see them through times where they were desperate until they could get more! and the whole store card thing - stupid!! since not being allowed to apply for a bhs card i have tried to avoid them as it's like being told i'm not as good as the person standing next to me in a queue.
    (obviously the whole mortgage thing doesn;t apply as i couldn't pay mortgage repayments - im just talking about small level credit)
    Last edited by babybutton666; 18-01-2011 at 9:22 PM. Reason: to add the last bit in brackets
    • RichPyke
    • By RichPyke 18th Jan 11, 9:30 PM
    • 126 Posts
    • 61 Thanks
    RichPyke
    • #8
    • 18th Jan 11, 9:30 PM
    • #8
    • 18th Jan 11, 9:30 PM
    It would be nice to be able to get a cheap (or even average) rate on a mortgage... FTB mortgage taken out 3 months ago and the APR is insanely high (and fixed for 2 years too!!) despite my credit rating being excellent and my salary being higher than average (not taking in to account the self employment earnings). Yes, I got the mortgage promise instantly (pretty much anyway) but I am paying for it... and fyi, mortgage promise means very little... they can, and do, still turn you down going by stories I heard and read while I was applying.

    Sure it's a 90% LTV mortgage, I'm a FTB so it's going to be up that end... but I can pay it, I have about 7 years worth of bank statements and pay slips showing that I constantly earn plenty to cover the mortgage and it's secured on the house anyway so the risk the lenders are taking is pretty low...

    Loans on the other hand, easy to get and have good rates (not as good as a few years back but still lower than my mortgage).
    Credit cards, they are all throwing them at me, pre-approved (which doesn't actually mean it's approved as they still check you out after you agree etc...) but high interest.

    So there wasn't actually an answer on the poll I could agree with to be honest. Yes it's easy to borrow but cheap borrowing, only if it's up to about 25,000. Borrow a substancial amount for a long period of time such as 117,000 over 35 years and you get stung for it.
    Rich
    • gailey
    • By gailey 18th Jan 11, 10:27 PM
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    • 17,249 Thanks
    gailey
    • #9
    • 18th Jan 11, 10:27 PM
    • #9
    • 18th Jan 11, 10:27 PM
    If you talking morgages than things are worse as they 20-25percent deposit, less say 3half times income was up to 6 few years ago and superclean credit history.
    All the talk of being responsible lenders means borrowing will become harder and more peope excluded.

    Its true house prices dropped but conditions become much harder to get a morgage.

    Consumer debt thats still availiable but much more expensive.
    hubbys had loans with aa for years.
    One month his bank messed up his dd not sure if santander fault or aa.
    but when he rearrnged his loan during the credit chruch despite 36k a year salary intrest rate went from 7percent to nearly 15percent.

    credit cards have slowly hikes rates from introductary 16percent to 29.9 percent.
    Think mainstream borring will become too cautious and much more expensive.
    This will then push people towards high interest loans from pay day companies or provident.
    pad by xmas2010 14,636.65/20,000:
    Pay off as much as I can 2011 15008.02/15,000

    new grocery challenge 200/250 feb

    KEEP CALM AND CARRY ON,Onwards and upward2013
    • littlerat
    • By littlerat 18th Jan 11, 10:29 PM
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    littlerat
    I've voted needs to be easier available...

    Buuuut, I may be biased, in Cornwall you often get people on relatively low wages paying high rents, yet unable to get a mortgage (which would be 200 cheaper a month at times) as they don't earn enough. I'd presume that's a national problem, but I can't say for sure.

    Certainly a problem I'll have when working if I don't move out of Cornwall!
    • archer7
    • By archer7 18th Jan 11, 11:49 PM
    • 60 Posts
    • 53 Thanks
    archer7
    I think we're round about right. Most people are able to get a credit card to use responsibly and build their credit rating, even if they've made mistakes in the past or are on little income. I think the tightening of restrictions is definitely a good thing - my sister is one of many people I know that have spent completely irresponsibly due to the ability to get cheap credit. I think there certainly needs to be lending available to everyone - that's where companies like Provident can prove useful, yet their high rates will hopefully encourage people to change their spending habits.

    As for mortgages, I'm afraid I have absolutely no experience whatsoever
    • superbabe612
    • By superbabe612 19th Jan 11, 10:46 AM
    • 143 Posts
    • 92 Thanks
    superbabe612
    I chose answer A because as someone with a clean credit file I was surprised to have been rejected for a credit card with Halifax, who I bank with, on the grounds of the payment history of my other credit (mobile phone suppliers, insurance companies, etc.) I wanted to check my eligibility after 6 years in the wilderness (former bankruptcy) before I apply for a mortgage. A broker says I should have no problem now that my file is clear but why did I get turned down for a credit card?
  • Wiselady
    Mortgages could be easier - the Banks are being a bit hyper-sensitive. The problem is the pushing of loans and credit cards. This has always been immoral as it is the niave and vulnerable that get themselves into trouble this way. As soon as a person reaches 18 amongst their birthday cards in the post are invitations to apply for credit cards etc. Surely there should be a level of protection in this regard. Loan companies and Banks should have stricter regulations in the granting of loans and credit cards.
    • ennui
    • By ennui 19th Jan 11, 1:41 PM
    • 83 Posts
    • 51 Thanks
    ennui
    I think credit cards, personal loans etc. are far too easy to get. Mortgages are very difficult to get at the moment.
  • jamesd
    I'd be happy to have more and cheaper unsecured credit available. Can't even borrow as much as I have in investments at the moment, more than my pay, because scoring mainly considers credit and income not savings and investments.

    Unsecured and mortgage credit really merit two different questions.
    • kittykitten
    • By kittykitten 22nd Jan 11, 4:22 PM
    • 412 Posts
    • 1,018 Thanks
    kittykitten
    Like most others I voted on a purely selfish basis. I'm good with money (a whole other topic, I know) live well within my means and at 27 feel it's long overdue for me to move out of my parents' house and buy somewhere, but can't get a mortgage, despite having a good credit file and earning a relatively decnt wage, coupled with proof that I could easily afford monthly mortgage repayments. Like others have already mentioned this is more to do with deposit than it is the mortgages themselves. But maybe none if the options given were what I really wanted to vote, maybe the system just needs to be a lot more individually targeted, with lenders spending more time looking at each individual's (or couple's) circumstances, rather than making a judgement based on 2 minutes worth of information which has been largley what I've been asked for?
    • leaphaze
    • By leaphaze 23rd Jan 11, 11:00 AM
    • 344 Posts
    • 153 Thanks
    leaphaze
    Can't decide
    I spent some time thinking about this but ended up not voting.

    I have an excellent credit score and the only time I've been rejected for a credit card (for stozing) over the last 10 years was because I'd applied too early for the next credit card and the issuer bulked at the amount of debt on other credit cards. I'm no longer doing this since the interest rates are so low; I get a higher return using a cashback credit card.

    For me, credit is easy to get, although my only debt now is my mortgage. I remortgaged 15 months ago; a pain-free process, but then I do have a lot of equity in my home.

    So it really depends on your circumstances, although the amount of adverts on TV for credit should give you a clue.
    Wearing my other one today.
    • Conrad
    • By Conrad 1st Feb 11, 2:02 PM
    • 31,494 Posts
    • 55,821 Thanks
    Conrad
    Im fascinated by this poll - I vascillated myself on what to answer - so it'll be really interesting to see how it turns out.
    Originally posted by MSE Martin
    I've been in discussions with some important people at the FSA and Treasury on this.

    I could be construed to be a VI as I own a small mortgage brokerage, but in fact I earn more now that mortgages are more difficult to obtain, so no, I'm not a VI.

    I now cannot assist a great many categories of client that hitherto would have been able to buy a home, that are now forced to rent.

    Most are perfectly capable of paying a mortgage, yet millions are now barred. This is the great unsung story of the age as it is leading to a gulf between asset owners and renters, the very opposite of a meritocracy.

    One example category of clients routinely failing the FSA test (there are dozens of other barred categories though) is older borrowers, many of whom have come through a divorce and want to re - start. FSA rules mean lenders have to demonstrate the pension will be sufficient in retirment. The point is, 99% of such older people in the past did not get repossessed, yet now the majoirty are declined. I've helped many older people in the past and for sure most did not have enough pension to justify the mortgage in 5 or 7 years time, but the point is none of them ever got into trouble. Humans cope and find a way, they meet a new partner, they downsize, they get an inheritance etc. Surely we do not want a society where millions of perfectly capable grownups are told by a nanny state that they cannot do what they think they can?

    Again less than 99% ever get repossessed. Keep that in your heads folks.

    By all means weed out the heavy sub prime applicants, although even then there is unfairness. Lets say you made some mistakes in the past but for 3 years have paid everything on time. Now lets say rates start rising and you need to remortgage obtain a decent fixed rate THEREBY PROTECTING YOUR FAMILY HOME. New rules make it impossible for any high st lender to assist, so the FSA rules lead to more risk for such people trapped into a single lender.

    My MP Oliver Heald has been assisting me in this little campaign, but for the now the FSA generals are completely and utterly out of touch. They talk about meaningless one size fits all 'sustainable markets', but here at the coal face that means Betty aged 60 gets declined and is forced to rent.
    Last edited by Conrad; 01-02-2011 at 2:09 PM.
  • BlueAngelCV
    I'm another who can't decide.

    On the one hand it was obviously far too easy before but on the other it's now virtually impossible to get credit and as for getting on the housing market I can't even imagine a stage when I will be able to.

    It seems to me that they don't take into account whether you will actually be able to repay the debt. Before they let pretty much anyone have credit but now you can't unless your practically perfect. There should be more consideration given to indivdually circumstances rather than sticking with a rigid credit scoring system.

    You also have to consider the fact that people are in situations where they have too much debt so I think cutting off credit completely so that they now can't have options to transfer balances/change lenders etc is unfair.
    Wedding 5th September 2015
    • TBagpuss
    • By TBagpuss 2nd Feb 11, 2:35 PM
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    TBagpuss
    I think one of the problems is that so many of the decisions are made (or seem to be made) automatically on 'scores', rather than on an assesment of the individual.

    I think in general it is too easy to get credit, and the habit of credit cards etc increasing limits and offering extra cards to high borrowers is lunacy, BUT that at the other end of the scale there are people who would be good risk but who can't get credit as they don't fit neatly into a box.

    So far as mortgages are concerned, I suspect that a return to bank managers having greater discretion, actually interviewing prospective borrowers etc might even things out a little, especially where mortgages are concerned.
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