Friday, Apr 13, 2007
9 X Salary!!! We must be days off a HPC!!!
Daily Mail: Mortgage that's 9 times salary
It's finally here - the countdown has begun. The sun is shining and the buyers are nowhere to be seen - hey lets tempt them out with a 9 X Salary mortgage - in your dreams!!!
Posted by nearly30 @ 03:08 PM (314 views) Add Comment
11 Comments
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1. David20040_0 said...
I love the way a few weeks ago I predicted that this kind of multiple would become available and I was mocked and told I was wrong.
Oh look who has been proved right :)
2. paul said...
"more people are taking out 'self-certification' mortgages, which do not require any proof of income."
There's no subprime in the UK though. Definitely not. No. Never.
3. confused76 said...
'Banks are becoming more realistic and basing lending on affordability. It is bizarre to have people forking out hundreds in rent but not being able to pay the same amount via a mortgage so they can buy their own home.'
... nooooo,,, the usual b/s**t that it is better to pay thousands in mortgage interest than hundreds in rents!!!!!
"Lenders also say they insist those taking out self- certification mortgages put down a large deposit, normally 15%."
Wow! Thats a very large deposit...!
Come repossessions! Come repossession! Come repossessions!
4. royston said...
"The Halifax, Britain's biggest mortgage lender, said: 'We do not lend money to people who cannot afford it. It is not in our interest, or theirs.'"
Ah, but it is in your interest, Halifax. If you don't lend this money, the customer will go to a rival bank. Then the rival bank's profit will grow while yours doesn't. Your shareholders demand to know why your rival is making more profit than you. Through their more aggressive lending strategy, your rival may grow sufficiently large enough and profitable to make a take over for you. Halifax staff may end up calling their former opposite numbers "boss". Oh yes, it is very much in your interest to lend aggressively with lax standards. In fact, as long as their is no major market correction, you have no alternative. That is the system that we have in this country.
5. royston said...
In addition, Halifax,
Aren't all your mortgage sellers paid by commission? And how many of them make life-long careers in the industry? i.e. are they going to be around to face the customers in the 'unlikely' event that it all goes pair-shaped? Like I said earlier, you have no alternative but to sell subprime mortgages, whether or not we call them that.
6. uncle chris said...
I have to admit, VI tactics are becoming increasingly desperate, to the point of stupidity. You might have thought they would take some notice of what's happening over the pond - re: sub-prime meltdown (sub-prime being people likely to default on loans i.e. those at 9xsalary). Whatever happened to the friendly bank manager who used to look after your interests too.
7. C'mon Correction said...
David - looks like the mortgage companies have completely lost their common sense too !
8. denzil said...
Surely there is some scope for the FSA to look at what is going on here?
Perhaps I'm being too idealistic thinking the FSA should get in involved as they are probably little more than a group of farting baboons who have a jolly once a month or am I getting confused with the MPC?
The idiot mentioned in the article has £45 a month to live on after mortgage payments. That is complete and utter lunacy.
9. Scott said...
Can you feel the wind changing direction? As a would-be first time buyer, time is on my side but it seems to be happening quicker than expected. I know a few people in sales jobs and they say that some of them rotate jobs depending on what is easier to sell at any given time. A friend of mine did mobile phones, then moved into mortgages a couple of years ago and now he is going into N-Power. He basically does not care how he takes your money.
10. layers said...
Well maybe the water's hotting up, but 'David20040_0' beware of predictions like the 'fat lady is singing' - if it doesn't happen then people will go back to sleep. And given the announcement of an increase in multiple, how do you know that it's the top of multiple bubble?
I don't mean to be critcal; simply that predicting the start, middle or end, is folly: as we've seen plenty of times before. But the times are getting more and more interesting....
@Denzil - FSA, MPC.. alphabet spaghetti anyone? All bought and paid for, but for who....
11. dohousescrashinthewoods said...
There was an article a while back that mentioned power laws - the idea that people don't understand exponential trends (in relation to US "money-printing"). Well this looks like one to me, with the increase in multiple doubling every 6 months. Unchecked, it gives the following progression:
1 year ago: 3 x salary
6 Months ago: 5 x salary (+2)
[now]: 9 x salary (+4)
6 months' time: 17 x salary (+8)
12 months' time: 33 x salary (+16)
When is the curve so steep that we fall off? ;)