[cashinmattress]

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No deposit needn't mean no mortgage now, with a crop of new deals aimed at first-time buyers who are struggling to get on the housing ladder.

Last week Bath Building Society announced it was loosening its purse strings, and would be offering 100pc mortgages again.

But before desperate first-time buyers beat a path to its door, it's worth noting that there is a catch: the equity in your parents' home is effectively used as a deposit.

How many parents are going to for this? Equity ≠ cash!

Housing and greed has turned the UK into an insane casino.

[Bruce Banner]

cashinmattress, on 05 March 2013 - 09:49 AM, said:

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How many parents are going to for this? Equity ≠ cash!

Housing and greed has turned the UK into an insane casino.

Probably all of the stupid ones.

[Silent Dancer]

There is also the effort from Barclays called Springboard where parents have to put a 5% guarantee into a linked savings account and a 5% deposit. http://www.telegraph...r-mortgage.html

I'm not sure how popular these ideas are going to be. I think most parents have now got the idea that at best house prices are flatlining and wouldn't want to take the risk. Either the BoM&D is sufficently well off to fund a bigger chunk of the purchase or they accept that the kids can't afford to buy.

[AvoidDebt]

cashinmattress, on 05 March 2013 - 09:49 AM, said:

Housing and greed has turned the UK into an insane casino.

I met a young guy in his 20s a few weeks ago who took a loan from BOMAD to buy his first BTL. Parents obliged because he was oh so bored in his IT job....

[RufflesTheGuineaPig]

cashinmattress, on 05 March 2013 - 09:49 AM, said:

link

How many parents are going to for this? Equity ≠ cash!

Housing and greed has turned the UK into an insane casino.

Working 60 hour weeks? Living on rice and beans? Can't afford to turn the heating or lights on? Tough sh!t!

Miss a payment and we throw your elderly parents into the street and it will be all your fault!

[Bruce Banner]

Silent Dancer, on 05 March 2013 - 09:57 AM, said:

There is also the effort from Barclays called Springboard where parents have to put a 5% guarantee into a linked savings account and a 5% deposit. http://www.telegraph...r-mortgage.html

I'm not sure how popular these ideas are going to be. I think most parents have now got the idea that at best house prices are flatlining and wouldn't want to take the risk. Either the BoM&D is sufficently well off to fund a bigger chunk of the purchase or they accept that the kids can't afford to buy.

In my case, I've accepted that the kids are better off not buying in the present market and so have they, even though they have good jobs and could all afford to.

[Bloo Loo]

100% plus the lies on the mortgage application.

[cashinmattress]

RufflesTheGuineaPig, on 05 March 2013 - 10:24 AM, said:

Miss a payment and we throw your elderly parents into the street and it will be all your fault!

Not sure if it will be that extreme, but there will be penalties.

I wonder what happens in this case: the parents bankrupt, their house is heavily mortgaged to another bank, market conditions put the property into negative equity or it becomes unsellable..like the cliff side houses or flooding, et al.

If I put down my money on the roulette wheel the 'best' I can hope for is the 48.6% chance of getting my money doubled on an outside bet. I think the banks are playing much worse odds and encouraging folk to gamble like this is a classic case of the inmates running the nuthouse.

[winkie]

100% of three times one income and one times second.......repayment over 25 to 30 years, fine.


100% five times one income and three times second.......interest only indefinitely, madness.

[SarahBell]

One of the big four have one where parents loan money to kids for 'security' and get it back with interest after 3 years.

Assuming kids pay mortgage anyway.

[RufflesTheGuineaPig]

SarahBell, on 05 March 2013 - 11:08 AM, said:

One of the big four have one where parents loan money to kids for 'security' and get it back with interest after 3 years.

Assuming kids pay mortgage anyway.

Barclays.

[nickincash]

Fine - as long it's 100% of the value not 100% of the price.

[mikthe20]

cashinmattress, on 05 March 2013 - 10:38 AM, said:

Not sure if it will be that extreme, but there will be penalties.

I wonder what happens in this case: the parents bankrupt, their house is heavily mortgaged to another bank, market conditions put the property into negative equity or it becomes unsellable..like the cliff side houses or flooding, et al.

If I put down my money on the roulette wheel the 'best' I can hope for is the 48.6% chance of getting my money doubled on an outside bet. I think the banks are playing much worse odds and encouraging folk to gamble like this is a classic case of the inmates running the nuthouse.

Why do you wonder? The evidence is clear - under Labour, Conservative and LibDem governments these people and their lenders are protected at the expense of savers and taxpayers. Can't see a reason why this will change any time soon (UKIP=pro-banker NIMBYs).

[cashinmattress]

mikthe20, on 05 March 2013 - 02:22 PM, said:

Why do you wonder? The evidence is clear - under Labour, Conservative and LibDem governments these people and their lenders are protected at the expense of savers and taxpayers. Can't see a reason why this will change any time soon (UKIP=pro-banker NIMBYs).

I wonder because what you potentially have is a secured loan or second mortgage out on what could be an already mortgaged house, if we are talking about equity.

Of course it makes no difference for a property owned outright.

Does the original lender have to agree to the terms of the new one, say for the case of two banks?

It just seems nutty.

[cashinmattress]

mikthe20, on 05 March 2013 - 02:22 PM, said:

Why do you wonder? The evidence is clear - under Labour, Conservative and LibDem governments these people and their lenders are protected at the expense of savers and taxpayers. Can't see a reason why this will change any time soon (UKIP=pro-banker NIMBYs).

I wonder because what you potentially have is a secured loan or second mortgage out on what could be an already mortgaged house, if we are talking about equity.

Of course it makes no difference for a property owned outright.

Does the original lender have to agree to the terms of the new one, say for the case of two banks?

It just seems nutty.