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spyguy

Mumsnetter Vs. Mmr

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I like mumsnet. The property + diy post gives a good insight to UK metality - 80% nutters and 20% sensible.

Here's the post I've been waiting for:

http://www.mumsnet.com/Talk/property/2098728-******ing-surveyors-******ing-Nationwide-******ing-housebuying-All-go-******-yourselves

Don't all login and start posting. Think of mumsnet as some sort of scientific expirement where you only observe.

'Had MIP for 45k, no problem. New stupid ******ing mortgage rules came in and they said we can only borrow £34900 which is ridiculous as its not even double DH's wages and that's not taking into account child benefit, child tax credit and DLA (which they allow for mortgage purposes). They have said our out goings are too much to borrow more!! We don't spend any sodding money. Small credit card balances, one of which will be paid off, small child care (£26 a month for lunch times only, they even queried why this was so low), petrol and £30 and £40 a month for me and DH which covers the kids clubs (they said we have to declare this), council tax and buildings insurance, which are essential anyway. Its been a joke tbh as they said we couldn't afford a mortgage of £218 a month (even though we had been paying £425 now, they didn't even ask this).'

+

'We have great credit scores, our outgoings are hardly anything that we can't afford. We were even going to overpay our mortgage by £200 a month on top of the £218 it would have been. The mortgage was for 45k and our deposit was 52k and we are previous customers (we have just paid off our previous mortgage). We were taking it out over 25 years to keep payments low in case anything happens and they even queried it and said we could pay it in 10 years instead.

And they turned us down!! DH earns just under 19.5k, plus child benefit, tax credit and DLA a month and they said we can't afford 45k!!'

+

'I would keep travel costs to a minimum (we said £140 a month in petrol for 2 cars), nursery was £26 (for the lunch hours, rest is the free 15 hours), credit cards - 1 was going to be paid off, the other a balance of £140 that was being paid off at £50 a month, buildings insurance of £136 a year and council tax at £101 a month and they said this was too much!'

OK, lets do the numbers.

The want a 45K with ~ 50% LTV - so we can assume there is little risk to the bank - bar thecost of a repo, which can be significant percentage for cheaper houses

Lets say 19k - that'll be take-home of ~15K/year.

C tax - 1K

Utils - 1K (my estimate)

Cars/transport - I normally say 2K/year per car. The poster says ~1600/year petrol only, no maintenace. Lets say 2K

Now we are down to 11K + benefits - poster mentions DLA, tax credits + child benefit. I'll ignore the benefits. I know child tax can be lucrative but I don't expect it to last.

Poster mentions credit card bills. Mentions the lower amount and does not say about the higher one. I would guess there's some spin on actual expenses.

That leaves ~900/month for living - food, entertainment, disasters, holidays -for a family of 4.

I personally would say 150/week which would be pretty frugal.

That leaves 300/month spare cash buffer.

Using HSBC nice online replayment calculator:

https://www.hsbc.co.uk/1/2/mortgages/repayment-calculator

45K at 7% (that's the default IR - clever ehh?), capital repayment - i know replayment is a bit of a new fangled concept after endowments + IO mortgages.

20 years - ~350/month - >30% of 900 - Computer will say No!

In summary, the problem here is that you need to be earning a fair bit over the national average wage to have enought free cash, over and about lifes fixed costs, to be a good risk to the bank.

And the bank is right - an income of 19K cannot support a 45K and 4 people.

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" credit cards - 1 was going to be paid off, the other a balance of £140 that was being paid off at £50 a month"

That jumps out at me as someone who can not manage their finances well enough to be allowed a mortgage.

And they idea they could overpay their mortgage - where from?

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The insanity of giving a private company the authority to query every penny of outgoings.

Not even the democratically elected (!) government has the power to do that.

Scandalous

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The insanity of giving a private company the authority to query every penny of outgoings.

Not even the democratically elected (!) government has the power to do that.

Scandalous

What are you talking about? They don't have the authority. The information was provided voluntarily.

If somebody wanted to borrow 45k from me, I'd want to know whether they could pay it back or not too.

And if it was secured against a property, I'd want to know if it had enough value to do so.

I wouldn't be lending to somebody that needs subsidising with taxpayer's money anyway (not saying I don't support welfare).

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Dear Mum, when is your birthday?

Why?

I want to give you 2 presents? A mortgage offer based on new reasonable MMR rules and a vibrator.

Why the vibrator???

If you do not like the MMR you can go to f.ck yourself .... :lol::lol::lol:

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The insanity of giving a private company the authority to query every penny of outgoings.

Not even the democratically elected (!) government has the power to do that.

Scandalous

They do not have the authority to do so, it is simply that if they are going to lend you money they want to feel comfortable that you can pay it back, and that means checking your expenditure. Showing your details is entirely voluntary, but a condition of borrowing the money.

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The insanity of giving a private company the authority to query every penny of outgoings.

Not even the democratically elected (!) government has the power to do that.

Scandalous

Shareholders or members to think of; capital positions and upcoming realistic stress-tests to ensure some measure of solvency.

No one forces anyone to apply and go through the process to see if they can get a big enough mortgage to perhaps outbid others for property.

The scandal was handing out 100% ever larger mortgages to any eager debt-head with an application form, in the past.

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The insanity of giving a private company the authority to query every penny of outgoings.

Not even the democratically elected (!) government has the power to do that.

Scandalous

They do if you are on benefits after spending/squandering a load of cash. They can ask where you spent it all.

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The scandal is that the level of delusion in this country is such that people would rather stomp and scream about the fact that they can't afford to borrow enough for an overpriced house, rather than stomp and scream at the fact that overpricing means they are forced to attempt to borrow far more than they can afford to repay.

Is it so bloody hard to understand that less expensive housing would be the ideal solution?

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The scandal is that the level of delusion in this country is such that people would rather stomp and scream about the fact that they can't afford to borrow enough for an overpriced house, rather than stomp and scream at the fact that overpricing means they are forced to attempt to borrow far more than they can afford to repay.

Is it so bloody hard to understand that less expensive housing would be the ideal solution?

Entirely. Shouldn't the answer be to offer £11k less on the house they want to buy? And then perhaps rant about unrealistic seller expectations if it is not accepted?

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Entirely. Shouldn't the answer be to offer £11k less on the house they want to buy? And then perhaps rant about unrealistic seller expectations if it is not accepted?

so true

if everyone did this it would take the bomads and cash buyers several months before they realise they're being screwed by eas and vendors but eventually prices would have to drop

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They were only prepared to lend us less than half the amount we have been able get by going through a financial advisor.

Hugz. The debt slave is high in this one. waah, I want it and I want it now.

Seeings as in police state britain we now arrest people for anything and everything, cant we arrest the mumsnet population for dangerous levels of stupidity?

Its not a fecking right to borrow. I wouldnt lend to someone who scrounges half their income off the taxpayer either.

I love the replies. Its not 'the mortgage companies always has more and better information than you', thats why they have the primary responsibility if things go wrong, its the mortgage company is wrong, and you need to find a broker to lie for you.

Reminds me of all the self cert fraud in eric's video years back.

Its morons like those on mumsnet who make housing unaffordable and unobtainable.

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What are you talking about? They don't have the authority. The information was provided voluntarily.

If somebody wanted to borrow 45k from me, I'd want to know whether they could pay it back or not too.

And if it was secured against a property, I'd want to know if it had enough value to do so.

I wouldn't be lending to somebody that needs subsidising with taxpayer's money anyway (not saying I don't support welfare).

They want it all. In one state in the US they laughably call their food stamp cards 'independence cards'

For many people, welfare isnt a temporary safety net, its a way of life, used to cover wants like private house ownership.

Edited by Executive Sadman

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Look, we were in a terrible position when we bought in 2011. I had some bad credit (from 5 years previously), were struggling to meet the 10% deposit and had been turned down by three lenders and thought buying was beyond us - despite high incomes and small debts.

We paid £300 to an all-of-market broker who managed to get us an expensive but doable deal. The same broker is tied in to help us forever now with no fees from us (just from the institutions we are getting mortgages from) and the rates he is able to get us are far better than those we could access independently. We're now about to pay 2.24% on a 2 year fix with Accord on an 80% LTV. They have much better access than you would get independently, and when you look at the fee (payable on completion, or after) the amount of money you save is enormous.

This lady is playing a dangerous game. 2.24% on a 80% LTV over two years and she is struggling at that. That seems like incredible value and if rates rise even 0.25% that deal is unlikely to exist in 2 years time when she comes to get her new deal.

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From their point of view I can see how this makes sense, I'm going to side with the mums netter!

They have a 52k deposit presumably from the sale of another house given that they say they've just cleared the mortgage. I'm guessing the choices of what to do with this money are a) high street savings account or B) property.

In a high street account its going to be earning them ~£50 a month at the moment?

If they keep the cash in the bank, they'll be renting somewhere I assume? That's going to be ~£500 a month... -£50 earned = £450 a month for a home.

Where as if they buy, the mortgage costs are going to be £218 or maybe put that to £260 for a 5yr fixed to keep things stable.

So MMR says they can't afford it. The question you have to ask it where are they living now and how do they afford that? If they can afford the rent they must be able to pay a mortgage at ~1/2 the cost?

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This lady is playing a dangerous game. 2.24% on a 80% LTV over two years and she is struggling at that. That seems like incredible value and if rates rise even 0.25% that deal is unlikely to exist in 2 years time when she comes to get her new deal.

You have to love it when people ignore the fees. I'm guessing to access that wonderful rate she paid £2k up front? (or loaded it on to the mortgage amount, so by the time its paid off will have risen to ~£4k)

Edited by My Name Is ??

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The insanity of giving a private company the authority to query every penny of outgoings.

Not even the democratically elected (!) government has the power to do that.

Scandalous

If you apply for pension credit and SMI the man from the DWP comes knocking at your door.

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From their point of view I can see how this makes sense, I'm going to side with the mums netter!

They have a 52k deposit presumably from the sale of another house given that they say they've just cleared the mortgage. I'm guessing the choices of what to do with this money are a) high street savings account or B) property.

In a high street account its going to be earning them ~£50 a month at the moment?

If they keep the cash in the bank, they'll be renting somewhere I assume? That's going to be ~£500 a month... -£50 earned = £450 a month for a home.

Where as if they buy, the mortgage costs are going to be £218 or maybe put that to £260 for a 5yr fixed to keep things stable.

So MMR says they can't afford it. The question you have to ask it where are they living now and how do they afford that? If they can afford the rent they must be able to pay a mortgage at ~1/2 the cost?

I agree, the numbers don`t look scary at all, and although I only skimmed through it, the problem seems to be that they can at the moment cover these payments easily but the computer still says no (maybe because they have not being using and paying back big chunks of credit 600 -700 p.m on the card say, the banks like this as it shows you like credit but also like paying it back) The good news is that if this is becoming the norm, HPC is on the way.

Edited by dances with sheeple

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They've sold their shared-ownership property.

Could be the non-standard construction making lender extra cautious. Maybe a future cash buyer will buy one that comes up for sale at price they already have as deposit, in the future, with others being denied the debt they deserve. DDD, death, divorce, downsizing.

If you pity them so much - lend them the money yourself to snap up this bargain fgs.

http://www.mumsnet.com/Talk/property/2099768-Following-on-from-my-would-you-pull-out-thread-What-would-you-do-in-these-3-specific-circumstances

http://www.mumsnet.com/Talk/property/2098985-How-do-you-know-what-price-range-to-look-in-when-you-arent-sure-what-you-can-borrow

There are more interesting MMR rejections coming out than this one too.

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This post has really cheered me up. I know it sounds awful but I am so sick of the ridiculous situation with prices continuing to rise that almost anything that piles on the downward pressure is welcome. Another example of 'downward pressure' is the wage situation in much of the public sector. In real terms, public sector wages are falling and it makes the current housing situation seem even more absurd than it looked in 2007.

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What are you talking about? They don't have the authority. The information was provided voluntarily.

If somebody wanted to borrow 45k from me, I'd want to know whether they could pay it back or not too.

And if it was secured against a property, I'd want to know if it had enough value to do so.

I wouldn't be lending to somebody that needs subsidising with taxpayer's money anyway (not saying I don't support welfare).

Err no it wasn't

The BoE require the lender to pry into personal spending habits which have zip to do with whether or not the borrower can service the mortgage. It's none of the lender's business. They lend some money, they take security, the borrower enters a contract - the end.

It's patently obvious in this particular case the borrower can afford the repayments anyway. They're far lower than the equivalent rent would be.

I have a suspicion this legislation is simply a ruse to force more people into the arms of BTLers who don't have to face anything like the same gestapo levels of interrogation.

It's typical of the bahaviour of capital - exclude the poor when they should be buying assets, and encourage the poor when they shouldn't be buying assets.

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Err no it wasn't

The BoE require the lender to pry into personal spending habits which have zip to do with whether or not the borrower can service the mortgage. It's none of the lender's business. They lend some money, they take security, the borrower enters a contract - the end.

It's patently obvious in this particular case the borrower can afford the repayments anyway. They're far lower than the equivalent rent would be.

I have a suspicion this legislation is simply a ruse to force more people into the arms of BTLers who don't have to face anything like the same gestapo levels of interrogation.

It's typical of the bahaviour of capital - exclude the poor when they should be buying assets, and encourage the poor when they shouldn't be buying assets.

Or a ruse to cause a HPC so that the banks can lend more at safer multiples?

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This lady is playing a dangerous game. 2.24% on a 80% LTV over two years and she is struggling at that. That seems like incredible value and if rates rise even 0.25% that deal is unlikely to exist in 2 years time when she comes to get her new deal.

Exactly. These fixes are teaser rates.

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This post has really cheered me up. I know it sounds awful but I am so sick of the ridiculous situation with prices continuing to rise that almost anything that piles on the downward pressure is welcome. Another example of 'downward pressure' is the wage situation in much of the public sector. In real terms, public sector wages are falling and it makes the current housing situation seem even more absurd than it looked in 2007.

Yep, the more "misery" that is heaped on the property mentalists the better. Worst case they will have to go and rent a smaller property that they can afford to pay for, they won`t starve, there are plenty of food banks.

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