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Return Of The 90% L T V Loans To Try To Lure F T Bs Into Debt

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http://blogs.telegraph.co.uk/finance/ianmcowie/100008855/return-of-the-90pc-mortgage-raises-questions-for-first-time-buyers/

Return of the 90pc mortgage raises questions for first time buyers
By Ian Cowie Your Money Last updated: December 3rd, 2010
Would-be first time buyers, frozen out of the housing market by cash-strapped lenders demanding 20 per cent or even 25 per cent deposits, are
being offered pre-credit crunch style 90 per cent loan to value (LTV) mortgages again
. But they might do better to wait for further falls in house prices, as data from the Bank of England, Nationwide Building Society and elsewhere suggest continued weakness in the property market ahead of Government spending cuts.../
Kris Brewster, of Skipton Building Society, replied: “As a mutual building society, we are committed to doing everything possible to help people achieve their home ownership aspirations. Recognising the plight of first time buyers and home owners who have seen the value of their properties eroded by adverse market conditions, we are offering 90 per cent loans in a controlled way, as part of a competitive package of options designed to meet a range of needs.” :angry:

It is frustrating that the one nation that remains standing in the HPC disaster of the last decade or so continues with policies to prop up a market that needs to die for the benefit of all. Why is it, after a complete colapse in our financial markets, that the government seems to be happy with lenders ignoring common sense by continung with policies that put us in such enormous debt in the first place?

Is it ignorance, greed or something more sinister? There is not one single credible argument that the government can make to support our hideously distorted housing bubble. They need to regulate the lenders and do it quickly. 90% LTV when prices are falling is deception and deliberately enslaving the unwary in a lifetime (or more) of debt.

Edited by Realistbear

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http://blogs.telegra...st-time-buyers/

Return of the 90pc mortgage raises questions for first time buyers
By Ian Cowie Your Money Last updated: December 3rd, 2010
Would-be first time buyers, frozen out of the housing market by cash-strapped lenders demanding 20 per cent or even 25 per cent deposits, are
being offered pre-credit crunch style 90 per cent loan to value (LTV) mortgages again
. But they might do better to wait for further falls in house prices, as data from the Bank of England, Nationwide Building Society and elsewhere suggest continued weakness in the property market ahead of Government spending cuts.../
Kris Brewster, of Skipton Building Society, replied: "As a mutual building society, we are committed to doing everything possible to help people achieve their home ownership aspirations. Recognising the plight of first time buyers and home owners who have seen the value of their properties eroded by adverse market conditions, we are offering 90 per cent loans in a controlled way, as part of a competitive package of options designed to meet a range of needs." :angry:

It is frustrating that the one nation that remains standing in the HPC disaster of the last decade or so continues with policies to prop up a market that needs to die for the benefit of all. Why is it, after a complete colapse in our financial markets, that the government seems to be happy with lenders ignoring common sense by continung with policies that put us in such enormous debt in the first place?

Is it ignorance, greed or something more sinister? There is not one single credible argument that the government can make to support our hideously distorted housing bubble. They need to regulate the lenders and do it quickly. 90% LTV when prices are falling is deception and deliberately enslaving the unwary in a lifetime (or more) of debt.

what does offering 90% loans "in a controlled way" mean.

isnt thats what is currently happening?

the control means most cant have one.

of course, it is a headline....didnt they clamp down on travel agents billboarding deals that didnt exist?

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In for whatever passes for normal circumstances - a 90% loan to buy a property is fine. Throughout most of my life, 90% mortgages have been available. Occasionally 95% and, even in what people on here think were the good old days, people in professions could get 100% mortgages. It was all about risk.

With interest rates low, a 10% deposit added to a 180k mortgage will allow any young couple earning half decent money to buy a 200k property. Which, around here, is quite a nice 2 bed flat or 2 bed terrace.

I agree that a 180k mortgage is too big etc. that house prices are daft etc - but they've been daft for 10 years now (in my area) and big mortgages seem to be the norm. The 40% crash you are hoping for becomes more and more of a dream every day that passes. If it happens it really will be baked beans and board up the doors time. Personally, I'm not after this. The best we can hope for now - I'm thinking of my children here - is a period of inflation where house prices do not inflate.

I wouldn't hold my breath though. In the madhouse we live in, I am reconciled to selling up again in 5 years or so and handing my sons a chunk of cash each to use as a deposit on a house. I know people on here love renting, but I don't want them to be at the mercy of BTL landlord scum all their lives.

180K is 7 times the average salary.

hardly a normal FTB starting point.

thats gonna run forever.

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The whole thing is desperate, desperate policies for a desperate populace desperate to get their foot on the poxy housing ladder before they 'miss the boat,' the boat the spivs have pushed out of their reach by driving prices up so much.

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We live within a monetary system that is based on increasing debt. Once you accept this fact and use debt wisely it’s a powerful tool, deposits do nothing for a borrower. 104% finance is the most efficient system for a borrower.

It is bloody brilliant for exporting jobs.

Ding ding, round 2.

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We live within a monetary system that is based on increasing debt. Once you accept this fact and use debt wisely it's a powerful tool, deposits do nothing for a borrower. 104% finance is the most efficient system for a borrower.

IC..and is that the system that is about to collapse in property seizures and extreme taxation?

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We live within a monetary system that is based on increasing debt.

Do you mean as non-existent money is lent real debt is created? An endless money supply creating endless free labour from the debtors scurrying around trying to pay it off.

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what does offering 90% loans "in a controlled way" mean.

isnt thats what is currently happening?

the control means most cant have one.

of course, it is a headline....didnt they clamp down on travel agents billboarding deals that didnt exist?

Its means charging a 50-70% higher interest rate (As the articles states) and probably only to those that can prove they can afford it.

Edited by Peter Hun

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I doubt that the monetary system is about to collapse, if it dos then all bets off, and long live the new king

how can we all borrow 104% for BTL AND have renters to pay our way?

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This isn't necessarily bad and could cement a more bearish sentiment in the general populace. My lines of reason.

How many people could even raise a 10% deposit given the current high house prices?

Are these few people enough to slow, stop or even reverse the current downward trend in house prices?

Once their 10% equity gets wiped out and they start complaining to friends, family and the media the negetive sentiment gets amplified 10 fold.

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<B>'we are committed to doing everything possible to help people achieve their home ownership aspirations'</B>

By charging 5.78% , no thanks , I'll wait a bit.

D

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What I mean is that debt must increase as that is the only way that interest payments can be met it is self perpetuating if debt stopped increasing no one would have any funds to pay interest.

I don't think so, you can pay of any amount of debt with the same 10 pounds, you just have to keep earning it back and repaying it again and again. Neither debt nor real money supply need to increase to repay any amount.

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What I mean is that debt must increase as that is the only way that interest payments can be met it is self perpetuating if debt stopped increasing no one would have any funds to pay interest.

The idiocy of what is written above is quite surprising. It is one thing to have stupid thoughts but another to write them down for everybody to read. What is given above is the definition of a ponzi scheme and I am unaware of any ponzi scheme that has not eventually collapsed?

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I don't think so, you can pay of any amount of debt with the same 10 pounds, you just have to keep earning it back and repaying it again and again. Neither debt nor real money supply need to increase to repay any amount.

You mean work for a living?

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It does you know. if money is debt based ie your toner where does the money for interest payment on that tenner come from ? It doesn’t come from anywhere.

If the money goes to the creditor and just sits there then yes you would need to create a new note to be able to continue repaying your debt. But as long as the money keeps moving around the system you can again earn the same money you already repaid and continue repaying the debt.

That’s why debt must increase as it is the dog chasing its tail, if it were to stop increasing it would crash immediately.

think that's a different issue more about the continual growth quagmire we seem to be stuck in.

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It may be idiotic, it may not have collapsed yet, but it is not my thought it is the monetary system that exists today obviously a system that you do not understand.

if you say so...

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For the Skipton it's like taking candy from a baby:

I have to admit I didn't really know where to start when it came to finding the right mortgage. I'd heard of fixed rates and base rate trackers and so on, but didn't really know exactly how they worked or which mortgage would be right for me. It was really good to be able to talk to an adviser honestly and ask all the questions that I was a bit embarrassed about asking – what's a 95% mortgage? What does Loan to Value mean? Do I need to take out home insurance? Life insurance? Mortgage payment protection?"

http://www.skipton.co.uk/mortgages/fixed_rate_mortgages/

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<B>'we are committed to doing everything possible to help people achieve their home ownership aspirations'</B>

By charging 5.78% , no thanks , I'll wait a bit.

D

+1

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In for whatever passes for normal circumstances - a 90% loan to buy a property is fine. Throughout most of my life, 90% mortgages have been available. Occasionally 95% and, even in what people on here think were the good old days, people in professions could get 100% mortgages. It was all about risk.

With interest rates low, a 10% deposit added to a 180k mortgage will allow any young couple earning half decent money to buy a 200k property. Which, around here, is quite a nice 2 bed flat or 2 bed terrace.

I agree that a 180k mortgage is too big etc. that house prices are daft etc - but they've been daft for 10 years now (in my area) and big mortgages seem to be the norm. The 40% crash you are hoping for becomes more and more of a dream every day that passes. If it happens it really will be baked beans and board up the doors time. Personally, I'm not after this. The best we can hope for now - I'm thinking of my children here - is a period of inflation where house prices do not inflate.

I wouldn't hold my breath though. In the madhouse we live in, I am reconciled to selling up again in 5 years or so and handing my sons a chunk of cash each to use as a deposit on a house. I know people on here love renting, but I don't want them to be at the mercy of BTL landlord scum all their lives.

So when you say inflation you presumably mean wage inflation to match? If so then how will the UK even maintain the jobs that we have, let alone any new ones. You can't pick and choose with inflation. I lived through the sixties and seventies, when the cat is out of the bag it grows in to a tiger (and then you can't get the blighter back in).

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Because not all people that require housing will want to buy or can service the debt required to meet a 104% loan, same as it ever was.

Bardon

A lot of us have watched Money as Debt I am sure (and I agree with most of it). However, and pardon me for being thicko here, but in a debt based money system, how does interest earned on deposited money (say a savings account) affect the overall equatio?? It's cold, my head is frozen and I don't want to think it through.

Edited by tomwatkins

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I wouldn't get to worked up o er this. Is not even news it was hardly worth writing about. 10% mortgage have always been here there are probably several lenders offering them.

But here's the catch:

<B>'we are committed to doing everything possible to help people achieve their home ownership aspirations'</B>

By charging 5.78% , no thanks , I'll wait a bit.

D

In fact good old Skipton were so committed to helping the poor FTBs that, up until a few months ago they even offered a 95% 2 year fix! But the withdrew it after lack of interest. Hardly suprising when it was 7.12%! Reverting to BR+ 4.99%!

And also if you borrow 95% or 90% of a properties value you need a decent income to get approved in which case you would probably have had enough money to save a half decent deposit.

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if your tenner was created based on debt then just say that debt incurred a 10% interest rate, that means that one pound a year is to be paid to service the debt. That one pound cannot be created by debt, but if the borrower was to take on more debt then they could use some of that debt to pay the interest

or work to repay debt and interest?

...................and it goes on...........unlike debt .interest payments cannot be created out of thin air and for this reason alone debt levels must continually increase.............under our current monetary sytem

debt is only an integral part of this system because we have been convinced that usury is a normal part of life and we can't function without it. But functional banking existed before we decided interest was not a major sin any more in 1545 according to this http://en.wikipedia.org/wiki/Usury The problem being (as you know) that we are in so much debt, with diminishing ability to earn money, it could become impossible to repay all the compound interest making us slaves to our creditors.

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Yes, but it only takes one person on 40k and a partner on 20k and the monthly repayment on a 180k mortgage (currently) is feck all.

People earning over 40K are in the top 10% of earners, it's hardly typical.

And, whether one likes it or not, over any 25 year period you care to mention, property has always been worth considerably more at the end of any 25 year period.

So what? We're in a massive deleveraging sand storm, the economic landscape is completely different now compared to any 25 year period you want to mention. Look at the trend - nominal house prices are lower now than they were 4 years ago, despite relatively high inflation. And they're still heading lower. The whole world is doing a Japan. The Euro is fubared. The USA is in rapid decline. If China pops it's over.

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It does you know. if money is debt based ie your toner where does the money for interest payment on that tenner come from ? It doesn’t come from anywhere. That’s why debt must increase as it is the dog chasing its tail, if it were to stop increasing it would crash immediately.

this is wrong.

Take this model economy:

2 guys live on an island and each harvests 10 coconuts a day. One of the guys is extra hungry and takes 2 cononuts off the other guy at an interest rate of 100% per day. So on that day guy A eats 12 coconuts and guy B eats 8 coconuts. The next day guy A pays off his debt plus the interest by giving 4 coconuts to guy B. On that day guy A eats 6 co*****s and guy B eats 14 coconuts. So they have a system of borrowing with interest without requiring an increase in the number of coconuts.

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  • 284 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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