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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 8th Oct 13, 11:47 AM
    • 2,324Posts
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    Former MSE Helen
    MSE News: Help to Buy 95% mortgages launch today: What are the deals like?
    • #1
    • 8th Oct 13, 11:47 AM
    MSE News: Help to Buy 95% mortgages launch today: What are the deals like? 8th Oct 13 at 11:47 AM
    "NatWest and RBS are among the providers which will offer 95% mortgage deals under the Government's Help to Buy scheme..."

    Read the full story:

    Help to Buy 95% mortgages launch today: What are the deals like?




    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.

Page 1
    • JesseJames
    • By JesseJames 8th Oct 13, 12:00 PM
    • 307 Posts
    • 83 Thanks
    JesseJames
    • #2
    • 8th Oct 13, 12:00 PM
    • #2
    • 8th Oct 13, 12:00 PM
    Thanks Mr Cameron!!
    If people can't afford mortgages today, even the ones with "a good income" then let the market decide.
    Do not try to prop up the house prices for your banker friends.
    • VT82
    • By VT82 8th Oct 13, 12:16 PM
    • 1,038 Posts
    • 877 Thanks
    VT82
    • #3
    • 8th Oct 13, 12:16 PM
    • #3
    • 8th Oct 13, 12:16 PM
    No mention at all in the article of what rates these mortgages revert to after the fix finishes.

    Surely this will be hugely important for people who are likely to become 'mortgage prisoners' due to their LTV once their fix is up?
    • brit1234
    • By brit1234 8th Oct 13, 12:27 PM
    • 5,191 Posts
    • 11,968 Thanks
    brit1234
    • #4
    • 8th Oct 13, 12:27 PM
    • #4
    • 8th Oct 13, 12:27 PM
    The main hindrance to first time buyers getting on the market is house prices are too high. It is not access to more irresponsible lending.

    Help to Buy part 2 will just increase prices further freezing future generations out of home ownership. Those who participate face the serious risk of negative equity when the bubble bursts or crippling interest rates when the base rate rises.

    Scams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
    • Gordon Hose
    • By Gordon Hose 8th Oct 13, 12:30 PM
    • 6,057 Posts
    • 4,113 Thanks
    Gordon Hose
    • #5
    • 8th Oct 13, 12:30 PM
    • #5
    • 8th Oct 13, 12:30 PM
    No mention at all in the article of what rates these mortgages revert to after the fix finishes.

    Surely this will be hugely important for people who are likely to become 'mortgage prisoners' due to their LTV once their fix is up?
    Originally posted by VT82
    Only one I could find was Natwest...

    4.99% for 2 years which reverts to 4% variable thereafter.

    Or, 5 years fixed at 5.49% and 4% variable thereafter.
  • Lcyclayton9
    • #6
    • 8th Oct 13, 12:55 PM
    • #6
    • 8th Oct 13, 12:55 PM
    I have been waiting for this 5% to come out for ages so im glad if no one else is that its been bought forward. I have found a house and have an appointment with natwest on Friday...
    Im so scared because this means everything to me - i work full time with a good salary and all i want is some security for me and my daughter as privately renting just means that they can decide to sell at any point!
    I have worked hard in the last year to get my credit rating up - its on excellent with experian and good with exquifax.
    Im so scared as this means the world to me and houses rarely come up near my daughters school and really dont want to lose it.
    I have defaults on my file - but these accounts are all settled now - but will i have problems as iv defaulted ???
    • Gordon Hose
    • By Gordon Hose 8th Oct 13, 1:06 PM
    • 6,057 Posts
    • 4,113 Thanks
    Gordon Hose
    • #7
    • 8th Oct 13, 1:06 PM
    • #7
    • 8th Oct 13, 1:06 PM
    If you have defaults you're unlikely to get a 95% LTV mortgage.
  • BargainMad
    • #8
    • 8th Oct 13, 1:13 PM
    • #8
    • 8th Oct 13, 1:13 PM
    To counter any allegation that there will be irresponsible lending, the banks are only going to be offering these mortgages to a certain type of customer. Those who are "Rock Solid".


    I agree with the above poster. I am afraid anybody with settled defaults isn't going to be one of them.

    Besides this people will also have to prove their income both in the past and going forward. Somebody may have a good salary now but they are going to be looking at whether this is going to be maintained throughout the mortgage. In the past there was too much of an emphasis on overtime and benefits being acceptable forms of income. But for these mortgages they are going to be looking at how sustainable the basic salary is rather than trying to big up your income on every other front.

    Additionally all other credit obligations with all other providers will be factored in as well as all other outgoings.

    In essence - really tight criteria and no "softening" or nods and winks like in the pre-2007 days.

    Anyone who doesn't fit these criteria is not going to get one of these mortgages.

    In reality it is a return to the sensible and sustainable lending which existed before the rush to lend to anyone with a pulse. Lending which ultimately led to the collapse of the RBS, Natwest, Halifax and all the rest.

    There is too much in the media about these new 5% mortgages being reckless but in reality they will only be granted to those with perfect profiles.
    Last edited by BargainMad; 08-10-2013 at 1:37 PM. Reason: -
    • kingstreet
    • By kingstreet 8th Oct 13, 1:15 PM
    • 35,054 Posts
    • 19,084 Thanks
    kingstreet
    • #9
    • 8th Oct 13, 1:15 PM
    • #9
    • 8th Oct 13, 1:15 PM
    As I've been saying for days, there are 17 lenders offering 95% mortgages or variations thereon, 13 of them on second-hand property with no parental security required.

    The going rate is 5% to 5.5% and this will be no different.

    If you can get a 95% mortgage now, IMHO you could have got one before.

    If you have had credit problems, this is not going to get you accepted as the criteria will be as strict as it usually is for such high LTV lending.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • kingstreet
    • By kingstreet 8th Oct 13, 1:16 PM
    • 35,054 Posts
    • 19,084 Thanks
    kingstreet
    but will i have problems as iv defaulted ???
    Originally posted by Lcyclayton9
    Yes. If the defaults are still visible on your credit file.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • adamck
    I have been waiting for this scheme too.
    I believe that anyone who looks into it deep enough will see its pretty good for all.
    The rates are just under 5% which seems fair, the 5% deposit allows me to get onto the ladder having been able to save up £11,000 for deposit, fees etc...
    Me and my partner both have good jobs (Solicitors and NHS) and we are very careful with our money!
    We have zero commitments/loans/credit cards etc...
    I am booked in with RBS for a chat and hopefully i can
    get started.
    My credit history is clean, i have good credit, ive never been in debt, or missed any bills, payments or anything.
    I have been renting for over 5 years now and its just dead money, and trying to pay £650 in rent, plus bills and save up £11k was extremely hard to do and although people keep pointing out 'there are 17 x 95% mortgages before the scheme went live' it not been possible for me to apply for any of them so far...

    Of the 17 available 95% mortgages... most of them required either:
    A) A guarantor
    B) An existing current account
    C) Living local to the broker
    D) Buying a new build house

    I still havent found anyone (outside of the scheme) that will match what the government are doing with this scheme.

    I'm made up, just need to get it all confirmed now
  • Lcyclayton9
    I was afraid you were going to say this - it really annoys me as iv been renting since i was 17 and never missed a rent payment (even in hard times - keeping a roof over your head is the most important thing ) but guess what .... rent dosent go on your credit file.
    With this mortgage scheme - would a guarantor help ?
  • Lcyclayton9
    well done
    I have been waiting for this scheme too.
    I believe that anyone who looks into it deep enough will see its pretty good for all.
    The rates are just under 5% which seems fair, the 5% deposit allows me to get onto the ladder having been able to save up £11,000 for deposit, fees etc...
    Me and my partner both have good jobs (Solicitors and NHS) and we are very careful with our money!
    We have zero commitments/loans/credit cards etc...
    I am booked in with RBS for a chat and hopefully i can
    get started.
    My credit history is clean, i have good credit, ive never been in debt, or missed any bills, payments or anything.
    I have been renting for over 5 years now and its just dead money, and trying to pay £650 in rent, plus bills and save up £11k was extremely hard to do and although people keep pointing out 'there are 17 x 95% mortgages before the scheme went live' it not been possible for me to apply for any of them so far...

    Of the 17 available 95% mortgages... most of them required either:
    A) A guarantor
    B) An existing current account
    C) Living local to the broker
    D) Buying a new build house

    I still havent found anyone (outside of the scheme) that will match what the government are doing with this scheme.

    I'm made up, just need to get it all confirmed now
    Originally posted by adamck

    pleased for you - wish i had a perfect credit file - my score is 4 points of perfect with experian but feel like i wish i hadnt of bothered now - because i obviously have no chance Good luck
  • Lcyclayton9
    To counter any allegation that there will be irresponsible lending, the banks are only going to be offering these mortgages to a certain type of customer. Those who are "Rock Solid".


    I agree with the above poster. I am afraid anybody with settled defaults isn't going to be one of them.

    Besides this people will also have to prove their income both in the past and going forward. Somebody may have a good salary now but they are going to be looking at whether this is going to be maintained throughout the mortgage. In the past there was too much of an emphasis on overtime and benefits being acceptable forms of income. But for these mortgages they are going to be looking at how sustainable the basic salary is rather than trying to big up your income on every other front.

    Additionally all other credit obligations with all other providers will be factored in as well as all other outgoings.

    In essence - really tight criteria and no "softening" or nods and winks like in the pre-2007 days.

    Anyone who doesn't fit these criteria is not going to get one of these mortgages.

    In reality it is a return to the sensible and sustainable lending which existed before the rush to lend to anyone with a pulse. Lending which ultimately led to the collapse of the RBS, Natwest, Halifax and all the rest.

    There is too much in the media about these new 5% mortgages being reckless but in reality they will only be granted to those with perfect profiles.
    Originally posted by BargainMad
    What are my other options ? I could possibly get a guarantor but no higher deposit ?
    • darkvader
    • By darkvader 8th Oct 13, 2:04 PM
    • 267 Posts
    • 67 Thanks
    darkvader
    Posting what I stated in my post earlier today

    For those who cannot save for or have enough deposit, it is FAR more beneficial to buy a New Build, even if at a premium. Clearly, for those of us who cannot afford a second hand home because we need a 25% deposit for a decent mortgage then might as well et a brand new home with all the works

    1. You give 5% and get 20% from the govt
    2. You then get a 75% mortgage with interest rates of around 3%

    Lets say you can even pay the 5% to 5.5% interest on the 95% mortgage. Instead

    1. Calculate the difference between this payment and the new build
    2. Put aside the extra cash you save not paying the higher interest
    3. More than likely this cash can used to pay off the govt 20% after 6 years time
    4. You also own a bigger piece of your property, from the mortgage lender that is, to remortgage after 5 years on to a better deal

    Help to Buy Round 2 should have been locked up and thrown away

    DV
    • dgtazzman
    • By dgtazzman 8th Oct 13, 2:04 PM
    • 1,117 Posts
    • 669 Thanks
    dgtazzman
    I actually think it's quite funny. I believed the point of this second phase of the HTB scheme was so people that are 'rock solid' as somebody else put it, could get a 95% LTV mortgage and 80% LTV rates. The rates they are now actually using for these products don't really match the idea behind this scheme though. The rates seem to be 1%-1.5% higher than 80% LTV products. I know around 0.9% of this will be the cut the mortgage provider has to pay the government, but still, to me this doesn't look like the product they were dangling in front of the electorate beforehand.

    And to the poster above, I am using the HTB new build equity loan scheme. I don't intend to repay the equity loan after year 5 is over. I think it's more beneficial to overpay the mortgage as the interest rate on that is higher than the rate on the equity loan for quite a few years after that and that is assuming interest rates don't rise. The only danger is house prices rocketing up, thus raising the repayment value of the equity loan, but at the same time, the sale price of the house would go up, so I don't really consider this putting me out of money.
    Last edited by dgtazzman; 08-10-2013 at 2:08 PM.
    • koloko
    • By koloko 8th Oct 13, 2:08 PM
    • 1,656 Posts
    • 1,344 Thanks
    koloko
    it really annoys me as iv been renting since i was 17 and never missed a rent payment (even in hard times - keeping a roof over your head is the most important thing ) but guess what .... rent dosent go on your credit file.
    Originally posted by Lcyclayton9
    Are you suggesting that that people should be rewarded for paying their rent?
  • Lcyclayton9
    Are you suggesting that that people should be rewarded for paying their rent?
    Originally posted by koloko
    No but your credit file is rewarded for paying loans that you have took out ? so why not rent?
  • Lcyclayton9
    why not?
    Are you suggesting that that people should be rewarded for paying their rent?
    Originally posted by koloko
    No but your credit file is rewarded for paying loans that you have took out ? so why not rent?
    • darkvader
    • By darkvader 8th Oct 13, 2:27 PM
    • 267 Posts
    • 67 Thanks
    darkvader
    And to the poster above, I am using the HTB new build equity loan scheme. I don't intend to repay the equity loan after year 5 is over. I think it's more beneficial to overpay the mortgage as the interest rate on that is higher than the rate on the equity loan for quite a few years after that and that is assuming interest rates don't rise. The only danger is house prices rocketing up, thus raising the repayment value of the equity loan, but at the same time, the sale price of the house would go up, so I don't really consider this putting me out of money.
    Originally posted by dgtazzman
    I forgot to mention this actually - if we go for the new build, we are pretty much planning the same - overpay the actual mortgage and keep the govt loan ongoing as its much lower. So initially, whatever we save in getting a low mortgage rate will be used to overpay the outstanding principle thus making us bigger owners of our own property.

    We'll probably use anything on top as savings towards paying 10% of the govt loan back - and we will do that only if the markets havent shot sky high. If house prices go through the roof, I'd rather wait for it to come back down before paying an inflated 20% back to the govt

    DV
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