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120% Ltv Halifax

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Since it's for existing borrowers only, it must be for those who are under water or want to move and are willing to take -ve equity with them.

Max lend is £8m though ?! Surely not available for BTL. :angry:

Edited by deflation

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Since it's for existing borrowers only, it must be for those who are under water or want to move and are willing to take -ve equity with them.

Max lend is £8m though ?! Surely not available for BTL. :angry:

The 8m bit made me think that the target market was BTL ,if you are looking at buying a £8m house you would not be looking at 120% ltv mortgages surely

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ohmy.gif wow im surprised at the amount of 100% ones too...

well i think that's confirmed it, no house price crash is on the cards, well the banks don't seem to think so...

If you look at the small print under most of the 100% ltv they are only available in NI for a shared equity scheme

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Ah it`s all coming back to me now

I'm on a phone so can't find the link but Lloyds released some information a while back about how this works, i seem to remember thinking it wouldn't be of much use to most people since extra rooms don't come cheap. Might allow a relocation to a similar sort of place but a trade up looks unlikely if the borrower is in negative equity to start with.

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The deal with the Lloyds 120%mortgage is that the mortgage borrowings cannot be increased to move onto the offer. So it's pretty niche, launched in early 2011 too.

Is the Halifax deal on similar terms?

The details are only available over the phone by the looks of it

It`s the £8m pound bit that makes me think it`s targeting the BTL market ,I seem to remember something about the scheme for the armed forces but with the amount the halifax are willing to lend at 102% ltv makes me think this is not on the same lines as the lloyd's one

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Allowing >100% mortgages for existing borrowers in NE is a good thing.

It reduces the negative social consequences of negative equity, which is the only real argument in favour of preventing house price falls.

It also improves housing market liquidity, which in turn improves price discovery.

Basically, it means people can move to find work, without having to hold out for an unrealistic price on their house sale.

It doesn't remove the financial loss of overpaying, since you still have to pay the amount you originally agreed to pay, so there's no moral hazard issue.

Of course, it'll be abused and probably be used for BTL or shared equity schemes or some other stupid thing.

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Allowing >100% mortgages for existing borrowers in NE is a good thing.

It reduces the negative social consequences of negative equity, which is the only real argument in favour of preventing house price falls.

It also improves housing market liquidity, which in turn improves price discovery.

Basically, it means people can move to find work, without having to hold out for an unrealistic price on their house sale.

It doesn't remove the financial loss of overpaying, since you still have to pay the amount you originally agreed to pay, so there's no moral hazard issue.

Of course, it'll be abused and probably be used for BTL or shared equity schemes or some other stupid thing.

no moral hazard?...what about shareholders and depositors....maybe if things get too bad, then a 10% "tax" on deposits will cover the losses?

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no moral hazard?...what about shareholders and depositors....maybe if things get too bad, then a 10% "tax" on deposits will cover the losses?

What about them?

If these people already have >100% mortgages, and can't increase the loan amount, then offering a new mortgage with the same terms makes very little difference to the risk position of the bank. It might actually improve it.

I really don't see your point, perhaps you could explain.

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What about them?

If these people already have >100% mortgages, and can't increase the loan amount, then offering a new mortgage with the same terms makes very little difference to the risk position of the bank. It might actually improve it.

I really don't see your point, perhaps you could explain.

they should be out of the game here at first opportunity.

A person with a 2 year fix that ends and they find they are in NE, should pay the going rate for the secured part, and the going rate for the unsecured part.

the above to help prevent Moral Hazard losses for depositors and shareholders.

The bank can at least try and claw back its potential capital losses....what the "aid" does is forego this opportunity.

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Allowing >100% mortgages for existing borrowers in NE is a good thing.

It reduces the negative social consequences of negative equity, which is the only real argument in favour of preventing house price falls.

It also improves housing market liquidity, which in turn improves price discovery.

Basically, it means people can move to find work, without having to hold out for an unrealistic price on their house sale.

It doesn't remove the financial loss of overpaying, since you still have to pay the amount you originally agreed to pay, so there's no moral hazard issue.

Of course, it'll be abused and probably be used for BTL or shared equity schemes or some other stupid thing.

The 100% ones in NI are only available for shared equity or I presume co ownership is the same as shared equity

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ohmy.gif wow im surprised at the amount of 100% ones too...

well i think that's confirmed it, no house price crash is on the cards, well the banks don't seem to think so...

In the 90s these were termed NEGATIVE EQUITY MORTGAGES. They allow people to sell at a loss and take the negative equity to their next house, so long as they stay with the same lender and pay their interest rates. Also stops the lender from forcing a sale to get repayment of (only part of) their capital when fixed term deal ends. I would say it is an acknowledgement that negative equity is a long term problem for borrowers, and therefore for lenders. It is preferable to demanding repayment of capital, precipitating bankruptcy and therefore writing off the debt.

However, a £8m loan at 120% LTV is over a million in negative equity. Must be BTL just rolling over the bad debt after fixed rate ends. You have to wonder whether bankruptcy is a better result in some cases.

Edited by ingermany

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In the 90s these were termed NEGATIVE EQUITY MORTGAGES. They allow people to sell at a loss and take the negative equity to their next house, so long as they stay with the same lender and pay their interest rates. Also stops the lender from forcing a sale to get repayment of (only part of) their capital when fixed term deal ends. I would say it is an acknowledgement that negative equity is a long term problem for borrowers, and therefore for lenders. It is preferable to demanding repayment of capital, precipitating bankruptcy and therefore writing off the debt.

However, a £8m loan at 120% LTV is over a million in negative equity. Must be BTL just rolling over the bad debt after fixed rate ends. You have to wonder whether bankruptcy is a better result in some cases.

there is acure for this in A business Mortgage.

Its a common tool and is called a margin call.

The borrower has to make up the equity with another source. failing to do this is endangering the lenders, it is also a plea of hope to the borrower, praying they are not digging thehole deeper.

The whole idea of foreclosure in these cases is to stop exactly that....digging deeper and making it worse...killing the dead ones can often make sense, and releases capital for good loans.

Again, a case of zombies sucking the life out of the rest of us??

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The government, banks, and "homeowners" in negative equity are not taking negative equity as seriously as they should because they are all hoping for a repeat of what happened in the 1990s, in which people who borrowed too much in the runup to the '89 peak and were stuck in negative equity for the first half of the 90s were eventually rescued by HPI from 1995 onwards.

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The government, banks, and "homeowners" in negative equity are not taking negative equity as seriously as they should because they are all hoping for a repeat of what happened in the 1990s, in which people who borrowed too much in the runup to the '89 peak and were stuck in negative equity for the first half of the 90s were eventually rescued by HPI from 1995 onwards.

I'm sure you're right.

I'm pretty sure they're wrong.

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there is acure for this in A business Mortgage.

Its a common tool and is called a margin call.

The borrower has to make up the equity with another source. failing to do this is endangering the lenders, it is also a plea of hope to the borrower, praying they are not digging thehole deeper.

The whole idea of foreclosure in these cases is to stop exactly that....digging deeper and making it worse...killing the dead ones can often make sense, and releases capital for good loans.

Again, a case of zombies sucking the life out of the rest of us??

I see your point.

Halifax, in giving 120% LTV on £8m, seems to be effectively offering an unsecured loan for £1.6m, which does stretch the principle of responsible lending somewhat. Can one get that sort of unsecured finance from anywhere else?

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120% LTV are purely aimed at speculators. Halifax were always vigourously encouraging speculation during the boom years with that annoying dancing goon on the television adverts jiving "Halifax gives you extra". That Halifax are still at it does not surprise me at all.

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  • 277 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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