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justthisbloke

What's Bad About The "lend A Hand" Mortgage?

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A Young Person I know is looking to go for one of these and I'd like to offer a critique of the deal to go alongside my general critique of gearing up to buy an overpriced asset.

http://www.lloydstsb.com/mortgages/offers/lend-a-hand.asp

2.7% on the guarantor's savings (42 month lock up period) seems pretty good; beats the money saving expert "best rates". And the mortgage rate doesn't seem horribly out of kilter for 3 year fixes.

Presumably, they're going in on pseudo 75% LTV which would rocket to 95% (less capital repayment) at the end of the initial period - if the guarantor wants their wonga back. This could cause problems in some cases.

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what's bad about it...my savings and taxes are being used to fund it....i see no reason to continue working in the UK or keeping my hard earned cash in a British bank because of this..where will the UK end up if this stupidy continues.....

is that enough?

Edited by TheCountOfNowhere

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If they cant afford a mortgage on their own now, without all the help etc, then how will they cope with IRs at 5%?

Remind them that the mortgage is for 25 years, how long can their gurantor afford to subsidies them?

Or jusg say good luck, and dont be the harbenger of bad news, they will just think your a prying twit, if they have their heart set kn buying a house, then nothing will persuade them other wise, and they will fsll out with you if you try to caution them otherwise

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The name alone sounds satirical and nefarious... <_<

thought it rang a bell.. time for the old war posters to get re-imagined.

1986.004.197.jpg

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A Young Person I know is looking to go for one of these and I'd like to offer a critique of the deal to go alongside my general critique of gearing up to buy an overpriced asset.

http://www.lloydstsb...lend-a-hand.asp

2.7% on the guarantor's savings (42 month lock up period) seems pretty good; beats the money saving expert "best rates". And the mortgage rate doesn't seem horribly out of kilter for 3 year fixes.

Presumably, they're going in on pseudo 75% LTV which would rocket to 95% (less capital repayment) at the end of the initial period - if the guarantor wants their wonga back. This could cause problems in some cases.

The idea is that they will have repaid a little of the capital and HPs will have gone up in the first few years giving them a better LTV when they come to remortgage. The former will happen but the latter may or not (and if not may more than wipe out the effect of the capital repayments).

Is 2.7% really that good for effectively being a junior bondholder on UK mortgage debt?

Edited by koala_bear

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