Thursday, Aug 19, 2010
The return to easy money with ZIRP. Will we see 99% mortgages soon?
FTAdviser: Window of opportunity opens for FTBs as mortgage rates fall
“We have more 10 per cent deposit deals, there is more flexibility on gifted deposits and the rates have come down. I think it will continue. The main problem now is not the mortgages but first-time buyers finding deposits, especially with the jobs market being the way it is.”
Posted by khards @ 08:50 AM (1248 views) Add Comment
16 Comments
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1. estrader said...
The imbecile who wrote this article clearly hasn't got a clue what "Window of opportunity" actually means. Either property IS affordable or it ISN'T...simples.
2. Crunchy said...
That's a very high window of oppertunity pal.
Wouldn't prozac be cheaper?
3. uncle tom said...
The difference in rates between 75% deposits and 90% deposits is still huge - the average interest charged on the margin between 75% and 90% works out at 16.35%
At that rate, FTBs are probably better off taking out an unsecured loan to boost their deposit - bizarre..
The mortgage market is far too complex for those who don't major in maths - I still think there should be a national standard mortgage that enjoys a small tax advantage - perhaps a modest tax on non-standard packages..
Key elements should be:
1) Max term 25yrs, not going past oldest borrower's 65th birthday. No more than two parties to the mortgage.
2) Straight repayment package.
3) Fixed rate for at least five years, with max increase in rate after term expiry limited to 1%.
4) Max arrangement fee £500, no penalty for early redemption.
5) Insurance against death, sickness and unemployment to be included within the offer rate.
4. uncle tom said...
I should add that the amount loaned should not exceed the borrower's total declared income to the HMRC over the previous five years, and that the loan should not exceed 90% of the value of the property.
5. timmy t said...
"The main problem now is not the mortgages but first-time buyers finding deposits, especially with the jobs market being the way it is.”
Let me get this right, we did have 2 problems, one was getting a mortgage that was big enough and the other was finding a deposit that was big enough. Now that mortgages aren't a problem, the only issue remaining is finding a deposit.
Here's a thought, maybe the problem is that prices are too high - that would explain both the mortgage and the deposit issues, and what's more, if we sorted out the price problem, not only would the market start to move again, but people wouldn't be saddled with a life-time of debt that they struggle to service.
6. khards said...
7. tyrellcorporation said...
'The main problem now is not the mortgages but first-time buyers finding deposits, especially with the jobs market being the way it is.'
Surely this is where 125% mortgages would help... oh hang on, I see their game.
8. jack c said...
This type of article is (IMO) misleading - mortgages are harder to obtain now than they were say 6 months or so ago - the mortgage market has changed beyond all recognition in the last 2 years. Lenders might state they are offering FTB deals, 90% LTV and gifted deposits etc.. but in the real world try applying for one and getting it to completion stage and its a totally different matter. I know lots of qualified advisers who have given up completely on such business because of the frustration, lack of remuneration and hassle involved. FSA rulings on lenders taking responsibilty for customer affordability will tighten things still further.
Lending for July 2010 is lower than it was in July 2009 ie down 3% from £14bn
9. R Lovejoy said...
uncle tom:
Good idea, but pointless unless it became mandatory.
Well already have a similar situation with self cert...pay a bit more...let a bigger loan
If the market was regulated to the extent you advocate prices could only plunge. Cant see the government going for that, they are only interest in schemes which allow more borrowing not less!
10. khards said...
Prices must be kept high to fund bankers bonuses.
A fairer system as proposed by UT would not support the huge bonus system currently in place. A drop in prices would also reduce the amount they make from us.
11. Stevie Dee said...
I recommend the editor stop taking the medication if this is the case. I'm also wondering how much he gets paid? He could always start writing childrens' stories as he clearly has a talent in my opinion.
12. Stevie Dee said...
Marc Shoffman sponsored by ?
13. mark said...
UT not sure about the age limit you would impose, after all 60 is the new 40, when i was a kid 40 was old, now 60 isn't even old when you see the oldies running around like spring chickens..
14. uncle tom said...
Mark,
Yes, people are living longer, and will also be working longer..
..but given the carnage that Gordon Brown wreaked on this nation's pension provisions, it is highly desirable that people have the last years of their working career free of mortgage obligations, so they can get their pension arrangements adequately funded.
15. timmy t said...
UT - I would have thought bad advice re pensions. If your average worker is on 40K by this point, they might have a few grand to spare each year which doesn't really fund a pension if you only have it for a couple of years. Surely doing it the other way around is better. Maybe having a pension provision should be another requirement before mortgage approval.
16. mr g said...
@TT "If your average worker is on 40K by this point"
That might be the average in the City but nowhere near average in the real world.