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Nationwide Offers 125% Mortgages Again....

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f***wits :rolleyes:

Nationwide to offer 125% (Guardian)

Mortgages allowing people to borrow up to 125% of a property's value are making a surprise comeback after Nationwide launched a deal aimed at homeowners trapped in negative equity who are keen to move house.

Britain's biggest building society said the new mortgage would allow homeowners to "carry over" their negative equity, and experts said it could throw a lifeline to people stuck in their homes who needed to move house. Other lenders look set to launch their own versions in the coming months.

The return of "125% mortgages" will surprise those who thought such deals were a thing of the past since the credit crunch and the clampdown on mortgage lending that followed.

Well, that's somewhere my savings won't be going.....

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This doesn't really add up.

If it's hard getting a mortgage with less than 25% deposit at the moment why would it be easy to get one with immediate negative equity? Nationwide is a conservative lender, this claim probably doesn't have much substance

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its for existing customers only

and only for trading up (or down)

and the rates are punitive

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The offer is only being made to existing Nationwide mortgage customers who are in negative equity but want to move home and borrow more.

Just a quick read of the article reveals how little substance there really is in this claim. Basically allowing existing customers in NE to move and 'roll over' their NE when they move is hardly a return to 125% mortgage deals. They're already in NE with Nationwide, makes no difference to them what property they live in as long as the mortgage is being paid

Edited by munimula

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Great news for the crash. This will only be aimed at people in negative equity giving them the ability to sell for less than they paid.

Exactly. We need lenders to allow their customers to port their neg eq with them when they move. Otherwise the whole thing [housing market] gums up with people who can't sell.

Good news.

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Guest happy?
So what happens when NE gets worse? Does it auto track to be 145% mortgage? What's the cutoff point?

Presumably, as there's such a limited number of people who meet the criteria probably quite high. They may have already decided that there's more to be gained in rolling-over the existing debt and allowing someone to service it than trap them in a property which is no longer relevant to their circumstances.

Provided someone can continue to service a debt NE is largely irrelevant - it of course becomes an issue in one of two circumstances:

A. If the person needs to move on (and this is what this loan option is about)

B. Financial position changes and there's no realistic prospect of servicing the debt - even with re-schduled payments.

Historically, few building societies ended-up repossessing property - partly because they were conservative lenders and because for the most part it wasn't to their financial advantage.

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its for existing customers only

and only for trading up (or down)

and the rates are punitive

Exactly... they're aimed a people who're already in the crap.

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Guest happy?
This is what happens when you don't allow banks to fail. :angry:

Spot on!

Apart from:

A. The Nationwide isn't a bank.

B. It's thriving, rather than failing.

In all other respects a pertinent remark well made.

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Great news for the crash. This will only be aimed at people in negative equity giving them the ability to sell for less than they paid.

indeed. and i bet they'll be brutal on the valuation for the new place too. Doubt it will be offered to many people though, or be on offer long, or be competitive.

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"Someone taking out the three-year fixed-rate, for example, would pay 6.73% up to 95%, and then 7.23% on the remainder of the loan, up to a maximum of 125%."

Fantastic deal - for Nationwide. They get to delay writing off losses they might suffer if they were to repo, and get to charge extortionate rates for as long as their "customers" can hold on. Nice one! <_<

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Guest spp

So...this is what is meant by the government taking on the 'toxic' assets!

They label them 'toxic' because they don't like their real prices. In other words, suddenly they don't like the 'free' market deciding how much things are worth.

Everything has a price!

Let prices fall then we can move into a real economy...derrrr

Shame it's probably too late now

:ph34r:

I need a vacation.

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B. It's thriving, rather than failing.

Is it really ?

It was downgraded with the rest of the building societies.

I for one have been moving money out of there as and when my fixed rate bonds have come to and end.

Their interest rates are poor and they appear to be a government puppet bank, except in name.

The government must have done some dodgy deal with them to get them to take on all those failed building societies.

I used to like the nationwide, now, im not so keen.

My rest of my money is coming out.

Edited by TheCountOfNowhere

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Spot on!

Apart from:

A. The Nationwide isn't a bank.

B. It's thriving, rather than failing.

In all other respects a pertinent remark well made.

A. Correct

B. Not quite see below

When the Dunfermline Building society went down the Government found a way of bailing them out through the back door, undoubtedly Dunfermline required some imediate money, but in was in the low hundreds of million.

Also the day after the sweetener they released their house price stats (which had to be delayed) showing a strong positive rise, this was after Halifax had poster their rise in January after they had been bailed out. The BBC did their bit by saying big house price rises but be careful not to read anything into it (a bit of double physiology used). Those 2 stats that came out at the time when there was no natural improvement in the market (stock market was making new lows and sentiment was very low). This set the stage for the bounce which I believe became natural in April/May when the cash buyers got twitchy. Exactly what was intended when the manipulated stats were used.

Just an opinion of course but I always felt they would use the VI indices to help stabilize the market and not drive it into the oblivion it would naturaly be heading into given current fundamentals.

http://news.sky.com/skynews/Home/Business/...200903415251548

The ailing Dunfermline Building Society was rescued with £1.6bn of public cash because of a "significant deterioration" in its financial position.

Dunfermline Building Society has racked up millions of pounds in losses

Chancellor Alistair Darling told the Commons Mr Darling there would be a "small residual exposure for the Government".

But he stressed it was now "business as usual" for the institution.

The Government announced earlier it was paying Nationwide a £1.6bn sweetener for taking on stricken building society.

Nationwide Building Society saved Dunfermline from collapse by purchasing core parts of the 140-year-old institution.

Edited by Confounded

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Guest KingCharles1st

So this means lenders will overlend against a house- not once, but TWICE..?!!!!!!

It certainly IS different this time. :blink::lol::rolleyes:

Edited by KingCharles1st

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Guest KingCharles1st
The alternative would be to repossess and lose on a depreciating asset.

Better to let the indebted continue to pay.

I thought this would happen sooner or later.

So saturation point has been reached then?

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