Friday, Oct 12, 2007
Ten percent mortgage rates; OUCH!
Firstrung: Sub prime rates for non-conforming mortgages have now breached the 10 per cent mark
John Charcol has noted that UK three month LIBOR has fallen back to 6.25 per cent, with more conservative product ranges entering the market - showing signs that the crisis is beginning to level off. Katie Tucker of John Charcol is however concerned that the non-conforming market is "growing into its new skin of lower LTVs and higher pricing" leaving borrowers stuck with rates edging into double figures...
Posted by converted lurker @ 03:19 PM (868 views) Add Comment
10 Comments
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1. whiteknight said...
This is just all over the place.
"crisis is beginning to level off." haha. Maybe he chants that at night.
We are not even warmed up yet.
2. Jonathan said...
The unaffordable homes crisis certainly is levelling off and it looks like things are beginning to get better.
3. uncle tom said...
Important to realise the consequences of falling LTV rates..
- Consider the borrower who took out a discounted rate on an 85% LTV, with the expectation that he could re-mortgage when the discount period expired. Now he is stuck on his original lender's SVR, because he can't get another 85% deal - being either a BTLer or having a flawed credit record.
The SVR rate will often be double the discounted rate he was paying before.
If he's stuck because of his credit record, that record is likely to get worse as he finds himself unable to meet the payments.
If he's a BTLer, he may well sell up..
4. David Smith's Sub Prime. . . said...
There is no Sub Prime ... I say so.....
5. planning4acrash said...
"For borrowers with a non-conforming mortgage, it is vital this year they make all of their mortgage payments in full and on time, and re-prioritise to reduce the loan-to-value of their mortgage if possible by paying extra whenever possible. High loan-to-value, heavy adverse remortgage options from now on will be slim, and in some cases, non-existent."
i.e. miss your mobile phone repayments and you will be stuck on SVR and be BANCRUPT!
6. Cheshireclassic said...
Oh dear,looks like another round of colds about to be caught!
7. This comment has been removed as it was found to be in breach of our Blog Policies.
8. Illhandleit said...
http://en.wikipedia.org/wiki/Loan-to-value
9. planning4acrash said...
This would be why people are being forced to cover mortgage repayments by credit card.
Mortgage sales could come with an additional statutory warning like this: "You may not be able to re-mortgage at the end of the discounted term if you fail to keep up with your re-payments and retain a healthy credit score." - In addition to the no-brainer one about loosing your house if you fall behind.
10. sirgoogle said...
1990/91 here we come