Author Topic: PM to ban 100% mortgages? (Read 1228 times)

Serious · **on:** February 22, 2009, 21:41:26 PM

PM to ban 100% mortgages?

on: February 22, 2009, 21:41:26 PM

http://news.bbc.co.uk/1/hi/business/7904205.stm

About time or a major U turn from Brown. Tories are bound to complain about Labour stealing their tactic.

And it may go out a lot further to hedge funds and effectively all financial markets.

http://news.bbc.co.uk/1/hi/world/europe/7904300.stm

Eggtastico · **Reply #1 on:** February 23, 2009, 14:07:53 PM

Re:PM to ban 100% mortgages?

Reply #1 on: February 23, 2009, 14:07:53 PM

This is NOT a good idea.

The problem with 100% mortgages is who they give them to.
To the right person there is nothing wrong.

There are ways around the 100% easily be doing a vendor gift or cashback, etc.
Overvaluing the property & the sale price, etc.

Surely someone who can easily afford a 100% mortgage would be better of getting one
than having a 90% mortgage & finding the other 10% by some sort of loan?

Also mortgage companies will just introduce a mortgage + secured loan
Mortgage = 90% @ say 5%
& secured loan = 10% @ around 7.5%

£90k Mortgage = approx £450 repayment
10% - 10k loan over 5 years = £280 a month

compared to
100% mortgage = approx £500 a month

Its all about having money to spend in this recession, not reducing peoples disposable income.

matt5cott · **Reply #2 on:** February 23, 2009, 14:43:41 PM

Re:PM to ban 100% mortgages?

Reply #2 on: February 23, 2009, 14:43:41 PM

Sigh, now every man and his dog (and me) will be saving up a deposit to buy late 2008

Serious · **Reply #3 on:** February 23, 2009, 15:24:32 PM

Re:PM to ban 100% mortgages?

Reply #3 on: February 23, 2009, 15:24:32 PM

Quote from: Eggtastico

This is NOT a good idea.

The problem with 100% mortgages is who they give them to.
To the right person there is nothing wrong.

[snip]

Its all about having money to spend in this recession, not reducing peoples disposable income.

Its easy for banks to check what you owe, so that option is out, getting around it isnt a good idea either.

As for disposable income many people have been living beyond their disposable income for years and need to stop. We need to reduce debt and imports as much as increase spending, otherwise we are just building an even bigger mountain for us to climb in the future.

Eggtastico · **Reply #4 on:** February 23, 2009, 16:31:26 PM

Re:PM to ban 100% mortgages?

Reply #4 on: February 23, 2009, 16:31:26 PM

Quote from: Serious

Its easy for banks to check what you owe, so that option is out, getting around it isnt a good idea either.
As for disposable income many people have been living beyond their disposable income for years and need to stop.
We need to reduce debt and imports as much as increase spending, otherwise we are just building an even bigger mountain for us to climb in the future.

I think its practically impossible to live debt free on what is deemed an average wage, certainly for Tony Blairs Mr Average or Mondeo Man.
Unless all you want to do is live to work. Mortgage/Rent, bills, Car loan & running costs, insurances, weekly shop, etc.
Mr Average = £480 a week before taxes = £365 after tax
Minimum wage = £230 a week before taxes & claiming tax credits. = £195 + approx £25 in credits = £220

I agree people do live well beyond their means, I think a lot of banks should take responsibility for that.
My first job when I was 18 I took home just under £100 a week. My bank gave me a credit card with a £2000 limit.
£2000 dont go far when your young & wreckless

& it really can f**k you up for a few years or at least until
you can get a better paid job.

Nobody should be having creditcards with limits that are 5x their monthly salary imo, let alone 20

Serious · **Reply #5 on:** February 23, 2009, 17:08:24 PM

Re:PM to ban 100% mortgages?

Reply #5 on: February 23, 2009, 17:08:24 PM

The Nationwide recently rethought mine, its down from nearly £5K to £500. TBH I wouldnt have spent it anyway but I can certainly see how come people end up in a mess over it.

Oh, the nearly £5K was about the amount of money I get in a year...

mr_roll · **Reply #6 on:** February 23, 2009, 20:07:55 PM

Re:PM to ban 100% mortgages?

Reply #6 on: February 23, 2009, 20:07:55 PM

I got a bank account with a £1500 interest free overdraft and a credit card with a £1500 limit when I was at college, 18 and at the time I had no job.

I think people should only be allowed a 90% or 95% mortgage, although Eggs mortgage idea is a good one I think.

BigSoy · **Reply #7 on:** February 23, 2009, 20:21:58 PM

Re:PM to ban 100% mortgages?

Reply #7 on: February 23, 2009, 20:21:58 PM

Agree with Egg, the "anyone who needs a 100% mortgage" is an unreliable feckwit is too much of a simplification. Plenty of people I know who could be comfortably paying a mortgage but dont have a deposit to get one at a sensible rate.

DEViANCE · **Reply #8 on:** February 23, 2009, 20:42:34 PM

Re:PM to ban 100% mortgages?

Reply #8 on: February 23, 2009, 20:42:34 PM

I bought my house on a 100% mortgage when I was 19 and havent missed a single payment.
There is no way I could have got a deposit together and even now 4years later I still probably couldnt get a decent deposit sorted.

The banks choose who they lend to, you cant really blame the people who got them. The banks should have made sure they could afford to pay it.

Im worried about struggling to get a decent deal on my mortgage next year when the fixed rate runs out.

Eggtastico · **Reply #9 on:** February 23, 2009, 21:21:59 PM

Re:PM to ban 100% mortgages?

Reply #9 on: February 23, 2009, 21:21:59 PM

Quote from: DEViANCE

I bought my house on a 100% mortgage when I was 19 and havent missed a single payment.
There is no way I could have got a deposit together and even now 4years later I still probably couldnt get a decent deposit sorted.

The banks choose who they lend to, you cant really blame the people who got them. The banks should have made sure they could afford to pay it.

Im worried about struggling to get a decent deal on my mortgage next year when the fixed rate runs out.

you could have a problem if your on an interest only. There again, it may not be worth moving at all.

My deal expires in November, at the moment all the mortgage offers around are no better than what my current deal is.
When it does expire, Ill actually now be saving over £100 a momth, rather than seeing it go up by about £75.

chrisdicko · **Reply #10 on:** February 23, 2009, 22:00:07 PM

Re:PM to ban 100% mortgages?

Reply #10 on: February 23, 2009, 22:00:07 PM

I was/am in the same position as Deviance.

Got mine 18 months ago on a 100% mortgage on my own, and can easily afford the payments etc. But wouldnt have been in a position to save a 10k deposit or anything like that. My fixed rate was for 3 years, so Im really hoping that I can get another good rate when I get a new deal. Its a repayment as well, although most of it is interest obviously.

Eggtastico · **Reply #11 on:** February 23, 2009, 22:09:10 PM

Re:PM to ban 100% mortgages?

Reply #11 on: February 23, 2009, 22:09:10 PM

Quote from: chrisdicko

I was/am in the same position as Deviance.

Got mine 18 months ago on a 100% mortgage on my own, and can easily afford the payments etc. But wouldnt have been in a position to save a 10k deposit or anything like that. My fixed rate was for 3 years, so Im really hoping that I can get another good rate when I get a new deal. Its a repayment as well, although most of it is interest obviously.

well a repayment should be ok - really depends on your equity (if you have any!) & how much youve paid off by then.

chrisdicko · **Reply #12 on:** February 23, 2009, 22:15:05 PM

Re:PM to ban 100% mortgages?

Reply #12 on: February 23, 2009, 22:15:05 PM

Yeah, thats true.

I think my flat has actually gone up in value, as one below me the same has just sold for £15k more than I paid 18 months ago, so hope mine has actually gone up by that as well.

moony1234 · **Reply #13 on:** February 24, 2009, 08:55:31 AM

Re:PM to ban 100% mortgages?

Reply #13 on: February 24, 2009, 08:55:31 AM

It is pure and utter stupidity.

I could afford a 110% mortgage on the average property without a deposit, its crazy that the PM wants to put everyone into the same category of useless f*ckwit who lives beyond his means.

Its because of this I cannot re-mortgage in June when my fixed rate is up, due to the house value falling by 18% and the new max LTVs being around 75%, regardless of the fact that I can more than afford the monthly payment!

Therefore I have to go onto the banks standard variable rate, which is basically crap.

Eggtastico · **Reply #14 on:** February 24, 2009, 15:59:06 PM

Re:PM to ban 100% mortgages?

Reply #14 on: February 24, 2009, 15:59:06 PM

Quote from: moony1234

It is pure and utter stupidity.

I could afford a 110% mortgage on the average property without a deposit, its crazy that the PM wants to put everyone into the same category of useless f*ckwit who lives beyond his means.

Its because of this I cannot re-mortgage in June when my fixed rate is up, due to the house value falling by 18% and the new max LTVs being around 75%, regardless of the fact that I can more than afford the monthly payment!

Therefore I have to go onto the banks standard variable rate, which is basically crap.

or get a secured 20 year loan for 25%

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Author Topic: PM to ban 100% mortgages? (Read 1228 times)