Jump to content
House Price Crash Forum
Sign in to follow this  
Ologhai Jones

Merged -- Mortgages Must Be Affordable Say Fsa

Recommended Posts

This is it ladies & gents, end of an era, say good bye to Liar loans, no more cheap credit, as BTL are already dead in water (well almost) & now this we have hpc in full motion brace yourself, but whats coming ain't going to to be pleasnt but at least you will have a full blown crash & dirt cheap houses.

getting a loan is getting harder & harder....good news indeed.

Self-certification mortgages likely to be banned by FSA

Self-certification mortgages, once the loan of choice for small businessmen, could be outlawed by the Financial Services Authority.

By Rosie Murray-West

Published: 6:30AM BST 13 Jul 2010

As part of a strategy to ensure all borrowers can afford their mortgages, the regulator will today propose all applicants for home loans must prove their income to lenders.

The ban will be put out for consultation before the FSA decides whether to halt the home loans.

Self-cert mortgages have been dubbed "liar loans" because they allowed applicants to self-declare their earnings. However, they were also a key product for the self-employed.

A spokeswoman for the FSA said on Monday that, although small businessmen might struggle to get a mortgage early on in their career, they would be able to do so "in due course". "Ultimately we are making sure that people can afford their mortgages," she said.

She added that nearly half of all mortgages taken out between 2007 and the first quarter of 2010 were advanced without consumers having to verify their income.

The regulator will also on Tuesday propose stricter affordability criteria on all loans, with lenders responsible for checking that the borrower can pay the funds back. The FSA will stop short of setting out exactly how lenders must assess potential borrowers.

However, affordability must be based on a repayment mortgage, rather than an interest-only one, and take account of future interest rate rises. It must also be based on a 25-year term, even if the loan is being taken out over a longer period.

Research carried out by the FSA looking at 9,000 people who took out a mortgage between 2005 and 2008 found that 46pc of households either did not have any money left or faced a shortfall after meeting their mortgage payments and living expenses.

Two thirds of borrowers also had other debts, such as credit cards or loans, as well as their mortgage.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/7886101/Self-certification-mortgages-likely-to-be-banned-by-FSA.html

Share this post


Link to post
Share on other sites
Research carried out by the FSA looking at 9,000 people who took out a mortgage between 2005 and 2008 found that 46pc of households either did not have any money left or faced a shortfall after meeting their mortgage payments and living expenses

:o

Share this post


Link to post
Share on other sites

This is it ladies & gents, end of an era, say good bye to Liar loans, no more cheap credit, as BTL are already dead in water (well almost) & now this we have hpc in full motion brace yourself, but whats coming ain't going to to be pleasnt but at least you will have a full blown crash & dirt cheap houses.

getting a loan is getting harder & harder....good news indeed.

Wow shocker!

Imbeciles who took out self cert mortgages for many times thier real income are likely to have loads of other debts as well :rolleyes:

Share this post


Link to post
Share on other sites

I was just re-reading the BBC website's reporting of this, from which:

"The share of interest-only mortgages has also been increasing, the watchdog said, with some mortgage holders having no plan on how to repay the capital loan."

This struck a chord with me because, to my surprise, a friend of mine (who has been a homeowner of various properties for I would guess at least a decade) mentioned to me that their mortgage was interest-only.

It's hard to imagine in a way that someone who has been an owner-occupier through the boom years could still be in a position where he needs to be on an IO mortgage.

It's only an anecdotal I know, but it does make me wonder if IO mortgages are much more common that I would've imagined. To me, IO mortgages should be avoided at all costs -- even at the cost of not bothering to try to own a house if my finances prevented me from having a non-IO mortgage.

Share this post


Link to post
Share on other sites

It's only an anecdotal I know, but it does make me wonder if IO mortgages are much more common that I would've imagined. To me, IO mortgages should be avoided at all costs -- even at the cost of not bothering to try to own a house if my finances prevented me from having a non-IO mortgage.

Apart from shared ownership, its the only way of getting a "secure tenancy" in this country and get to change the wall decorations and kitchen.

Edited by SirStirlingSlumlord

Share this post


Link to post
Share on other sites

Apart from shared ownership, its the only way of getting a "secure tenancy" in this country and get to change the wall decorations and kitchen.

I can see your point, but in a way it seems to me that IO mortgages are the worst of both worlds.

There's all the inflexibility of being an owner-occupier, the mortgage repayment is essentially no different than rent, except the occupier is responsible for all repairs etc., not to mention building insurance.

Share this post


Link to post
Share on other sites

I can see your point, but in a way it seems to me that IO mortgages are the worst of both worlds.

There's all the inflexibility of being an owner-occupier, the mortgage repayment is essentially no different than rent, except the occupier is responsible for all repairs etc., not to mention building insurance.

IO offered cheaper alternate to these so called investors & allowed them to build a portfolio, there was a time a lender would insist for a repayment vehicle but with relaxed attitude it wasn't a problem.

Share this post


Link to post
Share on other sites

The screw tightens.

From what I am seeing/hearing the new Tory propoganda/policy machine is in no mind to support the ramping of the housing market.

A defintie sea change since the election/

Edited by TheCountOfNowhere

Share this post


Link to post
Share on other sites

So the consultation paper that all the papers have been quoting from has been released by the FSA today

Introduction - FSA Mortgage Affordability Consulation Paper

The Consulation Paper in Full

Online response form

Interestingly they are asking for individual responses as well as business ones. So a chance for you to make your views known on their proposals directly.

Share this post


Link to post
Share on other sites

Wow shocker!

Imbeciles who took out self cert mortgages for many times thier real income are likely to have loads of other debts as well :rolleyes:

I defy anyone to use a more appropriate noun.

:lol:

Share this post


Link to post
Share on other sites

Apart from shared ownership, its the only way of getting a "secure tenancy" in this country and get to change the wall decorations and kitchen.

Not entirely true. There's still the Council/Social housing route that offer Assured Tenancies - Difficult to get I know, but still an option.

Share this post


Link to post
Share on other sites

I can see your point, but in a way it seems to me that IO mortgages are the worst of both worlds.

There's all the inflexibility of being an owner-occupier, the mortgage repayment is essentially no different than rent, except the occupier is responsible for all repairs etc., not to mention building insurance.

Just as an aside SSS, you actually have a lot of rights in a property as a renter - you are quite at liberty to change the wallpaper, decorate, put up pictures, etc. if you live in a house (even if your contract says otherwise).

You just have to make sure that, when you leave, it's in an equivalent condition as to when you arrived.

although many landlords that I have met are perfectly fine for you to do it with their permiswsion - as long as your plans aren't outlandish!

Anyway, back to topic :)

Share this post


Link to post
Share on other sites

FSA "proposes" an idea.

Guess which "institution" is about to be scrapped.

sorry, self employed.....you cant buy a home.

welcome BTL, you CAN buy a home based on a proposed rental income.

Share this post


Link to post
Share on other sites

I was just re-reading the BBC website's reporting of this, from which:

"The share of interest-only mortgages has also been increasing, the watchdog said, with some mortgage holders having no plan on how to repay the capital loan."

This struck a chord with me because, to my surprise, a friend of mine (who has been a homeowner of various properties for I would guess at least a decade) mentioned to me that their mortgage was interest-only.

It's hard to imagine in a way that someone who has been an owner-occupier through the boom years could still be in a position where he needs to be on an IO mortgage.

It's only an anecdotal I know, but it does make me wonder if IO mortgages are much more common that I would've imagined. To me, IO mortgages should be avoided at all costs -- even at the cost of not bothering to try to own a house if my finances prevented me from having a non-IO mortgage.

Anecdotal again but a chap I work with has a big 100% mortgage (5-6 times income) and is on IO. He didn't self-cert though - his parents are guarantors.

Share this post


Link to post
Share on other sites

This is it ladies & gents, end of an era, say good bye to Liar loans, no more cheap credit, as BTL are already dead in water (well almost) & now this we have hpc in full motion brace yourself, but whats coming ain't going to to be pleasnt but at least you will have a full blown crash & dirt cheap houses.

getting a loan is getting harder & harder....good news indeed.

Great Self Cert loans to be banned, 2 years after the last self cert lender left the UK.

you can still fast track at 75%, Halifax will fast track at 85% :o

Fast Track explained by Ray your friendly but dull mortgage advisor

Share this post


Link to post
Share on other sites

Great Self Cert loans to be banned, 2 years after the last self cert lender left the UK.

you can still fast track at 75%, Halifax will fast track at 85% :o

Fast Track explained by Ray your friendly but dull mortgage advisor

you sir, are mad if you cant see the glaringingly obvious difference between self cert and fast track.

Share this post


Link to post
Share on other sites

FSA getting busy proving it has an opinion....now its being closed.

Share this post


Link to post
Share on other sites

It wants to impose "affordability tests" for all mortgages and ensure that lenders get "back to the basics of responsible lending".

It also wants mortgage customers to verify their income levels

LOL LOL LOL

You mean they still haven't been?

I did check the date on the article to make sure it wasn't one from two years ago.

It's like someone in the FSA has just passed o level common sense.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 261 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.