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Banks Are Running Out Of Money

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A friend of ours in East midlands is currently renting. Three months ago she could get a 100K mortgage and has been shopping around. She found a place she liked and checked back into the bank last weekend and was told that she could only get 42K. Nothing has changed her end but a lot has changed at the bank. This all assumes she can put down a 25% deposit, which gets her a rate of 6.7%. If the deposit is not 25% the rate goes up to 8%.

The bank is obviously quite aware of a coming HPC. Fasten your seat belts!

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A friend of ours in East midlands is currently renting. Three months ago she could get a 100K mortgage and has been shopping around. She found a place she liked and checked back into the bank last weekend and was told that she could only get 42K. Nothing has changed her end but a lot has changed at the bank. This all assumes she can put down a 25% deposit, which gets her a rate of 6.7%. If the deposit is not 25% the rate goes up to 8%.

The bank is obviously quite aware of a coming HPC. Fasten your seat belts!

She needs to shop around more.

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Sounds odd to have such a big change. Had she perhaps not revealed other debts first time around?

No she assures us that nothing has changed from the last time she went in and in fact she was talking to her friend and he is earning 35K and was only offered a 74K mortgage. The bank is HSBC. If anybody else is thinking of buying it might be educational (for us all) to check in with your bank and see if something has changed since the budget.

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No she assures us that nothing has changed from the last time she went in and in fact she was talking to her friend and he is earning 35K and was only offered a 74K mortgage. The bank is HSBC. If anybody else is thinking of buying it might be educational (for us all) to check in with your bank and see if something has changed since the budget.

To be honest (and please excuse the implication if I'm wrong) it sounds as though she might have some other factors indicating she represents a risk to the Bank.

I've been in the mortgage hunt myself and haven't experienced the same. I found that the vetting process was very picky (much more picky than a few years back) but once through it people seemed pretty keen to throw money at me. My own bank (who didn't offer particularly competitive rates but were still coming in a country mile below what your friend has been quoted) offered 4.5 times joint salary a few weeks back and have phoned and sent a personal email to me since the budget...

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To be honest (and please excuse the implication if I'm wrong) it sounds as though she might have some other factors indicating she represents a risk to the Bank.

I've been in the mortgage hunt myself and haven't experienced the same. I found that the vetting process was very picky (much more picky than a few years back) but once through it people seemed pretty keen to throw money at me. My own bank (who didn't offer particularly competitive rates but were still coming in a country mile below what your friend has been quoted) offered 4.5 times joint salary a few weeks back and have phoned and sent a personal email to me since the budget...

I think this is likely to be the case. Mortgages are out there, but it's another story if people qualify to get them. A quick net search shows 5 year fixed mortgages at 4.19% with a 25% deposit. Why your friend is only being offered 6.7-8% is another matter.

Maybe there's something from the past that she hasn't told you (and isn't aware of). Maybe she should look up her credit report (annualcreditreport.co.uk - cheaper than Experian).

There's always the chance that the's not being 100% truthful, who would actually say that they're a credit risk when it's so much easier to say the banks are being b@stards.

EDIT: Added "(and isn't aware of)"

Edited by twatmangle

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Similar thing happened to a mate, he has a large deposit he was going to put 25% down and keep some money in savings. As a FTBer with a 25% deposit the bank said he could have a pretty bad deal (+5%?), he took in his payslips (which are hand written because he works for a small company), and the bank has a hissy fit and demands more money, he is now putting down all his savings as a deposit (45%) and he still gets a crap interest rate... I said he should shop around but he had already started paying things out, the mortgage was underway and there was noway to change without loosing some money.

Edited by AteMoose

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Thanks for the input guys. It's pretty hard to ask about her credit etc. and if she's covering something up then she will keep doing it. Quite frankly I doubt it and I can't imagine what she could have done in the last three months to screw herself up so badly but hey! There's nowt as queer as folk and you never really know anybody etc. etc. If we get a whole slew of similar reports then we know something is up but if others find no problems then we know its personal. I guess that's what forums are all about, and why they are so popular.

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I've noticed that the banks / building societies lending criteria seems to change regularly, getting more and more strict.

We were in Britannia BS last week. The week before, the systems used by Financial Advisers showed that with a 10% deposit, you were allowed 1 default up to £100 that had been satisfied. Now you can't...you need 15% deposit now. The woman we were speaking to said she has to check it daily for changes and can't keep up.

We have a poxy £13 default (LONG story) which we're trying to get removed/overturned. It's basically screwed us up for getting a mortgage for now. Seems a good thing though, considering the more frequent "bad" news (GOOD NEWS REALLY!!) that's coming out about where the house prices are heading. :lol:

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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