Brown "cautions against 100% mortgages"
Discussion
http://news.bbc.co.uk/1/hi/uk/7903985.stm
So where exactly have you been able to get a 100% mortgage these last 6 months?
"He says the Financial Services Authority will be considering controls on mortgages of more than 100% of a home's value and so-called high multiple mortgages offering loans of up to six times an applicant's salary. "
So even a highly paid proffesional, on 70k a year (lets say a doctor) will be unable to buy a nice family home in the south east. Even with the state of things now its £350-400k in many (not particularly outstanding) areas for 3-4 bed semi.
Its amazing how out of touch he is...
So where exactly have you been able to get a 100% mortgage these last 6 months?
"He says the Financial Services Authority will be considering controls on mortgages of more than 100% of a home's value and so-called high multiple mortgages offering loans of up to six times an applicant's salary. "
So even a highly paid proffesional, on 70k a year (lets say a doctor) will be unable to buy a nice family home in the south east. Even with the state of things now its £350-400k in many (not particularly outstanding) areas for 3-4 bed semi.
Its amazing how out of touch he is...
davido140 said:
http://news.bbc.co.uk/1/hi/uk/7903985.stm
So where exactly have you been able to get a 100% mortgage these last 6 months?
"He says the Financial Services Authority will be considering controls on mortgages of more than 100% of a home's value and so-called high multiple mortgages offering loans of up to six times an applicant's salary. "
So even a highly paid proffesional, on 70k a year (lets say a doctor) will be unable to buy a nice family home in the south east. Even with the state of things now its £350-400k in many (not particularly outstanding) areas for 3-4 bed semi.
Its amazing how out of touch he is...
Or they're £350-400k due to 100% 6x times mortgages. Perhaps we'll see more realistic prices?So where exactly have you been able to get a 100% mortgage these last 6 months?
"He says the Financial Services Authority will be considering controls on mortgages of more than 100% of a home's value and so-called high multiple mortgages offering loans of up to six times an applicant's salary. "
So even a highly paid proffesional, on 70k a year (lets say a doctor) will be unable to buy a nice family home in the south east. Even with the state of things now its £350-400k in many (not particularly outstanding) areas for 3-4 bed semi.
Its amazing how out of touch he is...
In principle there's nowt wrong with 100% mortgages but they need to be laced with heavy warnings about capital repayment, sensible earnings ratios and good evidence that the recipient is likely to see good earnings growth in a market of stagnant house price inflation.
HSBC have done them for years for graduates.
The 100% mortgages that should be discouraged are exactly the one Broon wanted more of just a few months ago.
His flip-flopping would be funny if he weren't f
king us up so badly.
HSBC have done them for years for graduates.
The 100% mortgages that should be discouraged are exactly the one Broon wanted more of just a few months ago.
His flip-flopping would be funny if he weren't f
king us up so badly.Edited by Olf on Sunday 22 February 09:37
Sounds like common sense to me.
If you can't afford a deposit, then you can't afford a house (and if your financial management skills are such that you're unable to save at least some deposit for such an important purpose, then you'd probably struggle to meet the unexpected expenses that crop up occasionally when running one, too).
And I'm one of the OP's 'highly paid professionals', but I certainly wouldn't want to be lumbered wth the sort of repayments necessary to meet a 6 x salary motgage. The traditional 3.5 x salary is the sensible limit (which is probably why it was traditional
).
If you can't afford a deposit, then you can't afford a house (and if your financial management skills are such that you're unable to save at least some deposit for such an important purpose, then you'd probably struggle to meet the unexpected expenses that crop up occasionally when running one, too).
And I'm one of the OP's 'highly paid professionals', but I certainly wouldn't want to be lumbered wth the sort of repayments necessary to meet a 6 x salary motgage. The traditional 3.5 x salary is the sensible limit (which is probably why it was traditional
).Edited by Sam_68 on Sunday 22 February 09:55
Sam_68 said:
Sounds like common sense to me.
Quite.Sadly we are in the logical conclusion of a period when the idea of 'saving up for something' was shelved in favour of 'if I can't afford it I'll just borrow'.
I have friends who use their monthly pay cheque to pay off their overdraft then start again. ..and they can't see that that is a pointlessly stupid situation to be in.
sounds like a sensible thing to do to me to,hopefully the dumb ass will increase interest rates at same time to encourage people to save instead of borrowing cash for just about everything..we had become a nation living on credit and thats where all these problems stem from..greedy people living way way beyond their means..
I can understand that it's a sensible and safe measure but I also have to disagree with Brown interfering in the market in this way.
If a mortgage provider wants to take the risk of lending 100% and their board has aproved this, on behalf of the shareholders and the person taking it on is aware of the risks and requires this type of mortgage then why not?
There are people out there who will always take on too much debt, that won't change. One person might have a 100% mortgage but no other debt, another might have a 90% mortgage but £20k on credit cards and £40k on perosnal loans. DO you legislate for that too?
What next a state imposed limit on personal credit card debt and loans? This is in effect what we are saying........
If a mortgage provider wants to take the risk of lending 100% and their board has aproved this, on behalf of the shareholders and the person taking it on is aware of the risks and requires this type of mortgage then why not?
There are people out there who will always take on too much debt, that won't change. One person might have a 100% mortgage but no other debt, another might have a 90% mortgage but £20k on credit cards and £40k on perosnal loans. DO you legislate for that too?
What next a state imposed limit on personal credit card debt and loans? This is in effect what we are saying........
TheEnd said:
Quit moaning about politicians.
Whilst it may be late to introduce guidelines against 100% mortgages, that isn't a reason not to bother.
I'm surprised political parties don't recruit from here as everyone seems to know how the run the country better.
It's not just on here is 95% of the country. Aren't we lucky to have such a massive pool of talent.Whilst it may be late to introduce guidelines against 100% mortgages, that isn't a reason not to bother.
I'm surprised political parties don't recruit from here as everyone seems to know how the run the country better.
Surely the sensible way to go is to continue to make these products available, but at a price.
I (as I'm sure many other do) recall purchasing their first place with a 5-10% deposit that they had scrimped, scraped and otherwise squirreled away for several years, to then be landed by the dreaded "higher lending charge" and additional % interest on top of that. But it was my first place and I loved it! The fact that I didn't have any proper furniture for 6 months (and what I had I "borrowed" from relatives and the like) just added to the fun factor of it all.
We need to encourage first time buyers into the market, but for that prices need to be sensibe together with sensible consistent lending policies.
All IMHO of course.....
I (as I'm sure many other do) recall purchasing their first place with a 5-10% deposit that they had scrimped, scraped and otherwise squirreled away for several years, to then be landed by the dreaded "higher lending charge" and additional % interest on top of that. But it was my first place and I loved it! The fact that I didn't have any proper furniture for 6 months (and what I had I "borrowed" from relatives and the like) just added to the fun factor of it all.
We need to encourage first time buyers into the market, but for that prices need to be sensibe together with sensible consistent lending policies.
All IMHO of course.....
Edited by J-Skid on Sunday 22 February 10:45
I can't really see what is wrong with a 100% mortgage if the income multiple is sensible, the market is stable and we are not actually in a recession.
I had one for my first house. Without it we would have spent years saving up for even a five percent deposit.
Just think that if a starter home is over 100K then even a five percent deposit will require saving 5K. On a graduate starter salary that's going to take years to save up if you are also paying rent and supporting a wife and baby as you do it. Remember that many people earn less than this so will find it even harder to save.
How long do you want people to wait for a house? Or do you actually want a situation where an average income forces you to choose between leaving having a family until you are in your late 30s or just doing it off benefits?
Just remember that not everyone has a double proffesional income to play with!
I had one for my first house. Without it we would have spent years saving up for even a five percent deposit.
Just think that if a starter home is over 100K then even a five percent deposit will require saving 5K. On a graduate starter salary that's going to take years to save up if you are also paying rent and supporting a wife and baby as you do it. Remember that many people earn less than this so will find it even harder to save.
How long do you want people to wait for a house? Or do you actually want a situation where an average income forces you to choose between leaving having a family until you are in your late 30s or just doing it off benefits?
Just remember that not everyone has a double proffesional income to play with!
The problem is the gap between wages and mortgages is to great.
Either property needs to fall to a realistic level or wages need to rise one hell of a lot.
Also in Britian we seem to have this unhealthy thing with Property ownership.
It always amazes me when people with mortgages say they own thier own property in reality they do not the Bank does.
Either property needs to fall to a realistic level or wages need to rise one hell of a lot.
Also in Britian we seem to have this unhealthy thing with Property ownership.
It always amazes me when people with mortgages say they own thier own property in reality they do not the Bank does.
However are house prices going to fall through the floor..... whilst I'm sure a lot of people wish that, the reality is that there is still a significant level of demand for housing in this country, for personal or commercial (buy to let) usage.
The sad fact is that, over-hyped by the media and stupid daytime TV, that people do see their houses as a form of longer term investment. You aren't going to change for a long time.
Most people in this country don't invest in shares or ISAs etc.
The sad fact is that, over-hyped by the media and stupid daytime TV, that people do see their houses as a form of longer term investment. You aren't going to change for a long time.
Most people in this country don't invest in shares or ISAs etc.
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