Wednesday, May 20, 2009
Ah yes, normality is what the world needs right now.
Telegraph: Lloyds TSB has become only the second High Street lender to offer mortgages with a deposit of five per cent, signalling a return to normality in the market.
Lloyds TSB has become only the second High Street lender to offer mortgages with a deposit of five per cent, signalling a return to normality in the market.
[...]
But the Lend A Hand mortgage requires 20 per cent of the mortgage value to be held in a savings account by the bank, fixed for three years - allowing first-time buyers to use their parent's savings to boost their deposit.
Posted by lukeskywalker @ 10:37 AM (1185 views) Add Comment
11 Comments
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1. tyrellcorporation said...
FFS if you read this twaddle it's yet more financial wizardy, smoke'n'mirrors and slight-of-hand. Why can't the finacial sector just get back to basics? As far as I can tell instead of jeopardising the buyers deposit (even though they aint' got one), it's shifted the risk to the 'parents' hard-earned savings. Altogether a pretty dishonourable state of affairs - but it's grabbed a cheap headline and in today's society that's apparently all that counts.
2. crunchy said...
The bubble that busted banks is over on the first little dip. They must sure like being busted and who wouldn't in this game.
Sh1t or bust springs to mind. Brace yourselves taxpayers for another round.
The banksters are gambling with your kids money.
3. growler said...
I look at it two ways: Either way Lloyds win,.
If the house prices boom, the mortgage is covered
If the house prices do not boom, the savings are captured.
If you believe - like most professionals, not a VI - that prices will be going down then slowly rise for some time - then Lloyds have just managed to secure long term finance at a nice low rate of interest. Since most other commentators believe that the capital drought plus possibly some inflation might mean interest rates will need to rise - it's a really "sweet" deal for Lloyds.
Nice marketing Lloyds.
4. yoyo1 said...
Looks like Lloyds expect further falls in property values and want friends or family to cover the loss. Or perhaps the government just want to take your savings.
5. tyrellcorporation said...
I just hope people aren't stupid enough to go for it.
6. waitingfor hpc said...
THIS IS NOT A NEW IDEA - MY DAD DID THIS 40 YEARS AGO TO BUY HIS FIRST HOUSE. HAS NO BEARING ON HPC ANYWAY.
7. Lukeskywalker said...
The consumer sees it like an equity release without the paperwork. After the lock-in period, you've access again to your savings. In a traditional 25% LTV you wouldn't see that money again as its debt paid down but here, you get it back.
What would be interesting is if the account can be nominated else there'd be a taxation issue on the gift.
8. mark wadsworth said...
That must be the "but..." of the week so far.
9. crunchy said...
7. mark wadsworth
......and the butt of the year goes to the population.
10. mrflibble said...
And they are only charging £999 to get involved with this crooked scheme too - think I'll sign up for three or four!
"To free the deposit, buyers would have to repay 5 per cent of the property value over three years or hope for a 5 per cent increase in prices."
You couldn't make this stuff up if you tried. It would have been better to come clean here...
"To free the deposit, buyers would have to pick 5 winning lottery numbers on a double roll-over draw or hope the previous owners of their new shack buried a bag of Krugerrands in the back garden."
11. mander said...
The savings are tied up with the bank until the homeowner has at least 10 per cent equity in their home.
What is Lloyds thinking? The houses will keep falling for next 5 years there will not be a 10 % equity in 5 years left.
FSA please regulate these people we can not another bailout. Just remember the French Revolution.