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fru-gal

You Cannot Afford A Cheaper Mortgage

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The regulator this week issued a clear warning that it was not acceptable for lenders to ignore the special provisions put in place for these types of borrower.

The 'clear warning':

Ultimately it is up to each individual firm to decide whether they offer a mortgage. They have to decide what level of risk they are prepared to take, and that’s reasonable.

:D

Edited by Digsby

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The 'clear warning':

:D

Risk?!

The only 'risk' is the government doesnt get the taxpayer to bail them out...which is about the same as the risk of a swarm of flying pigs.

The only 'risk' is that there is no risk...for the banks.

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Just realised that I put "Daily Mail" as a tag, when it is actually a "Daily Telegraph" article. If the mods are bothered please change. Thank you.

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BTl, trackers - yawn.

These peopl eknow exactly what they were signing up for when they took out a 25/30/40 year mortgage with a floating rate that the bank can set to whatever it likes when it likes.

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I've sympathy if this was happening to people who were good risks however as often happens in articles like this the case studies are lame. One is a student and the other up to her eyeballs in debt.

Of course they can could always move to another lender or perhaps not.

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I must be missing something, but I always thought that when the fix finished, you went on SVR and that was that! The SVR could be whatever the bank decided too. That's the bit I never liked and would only ever get fixed rate for the full term if I was ever to get a mortgage.

This is so typical of today's blame/victim culture.

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A 38 year old law student.

And a 2003 interest only BTLer mental health worker, who has 'been through a divorce' and has some debt arrears, moved herself into the BTL property in 2009, and now the ultra low commercial mortgage BTL tracker, (in itself having been floored partly to save the victims) seen her repayments lifted from an affordable £350pm to £800pm, a huge strain on finances, on a London BTL property worth how much now? Forcing her to take a lodger and extra work such as waitressing apparently.

Can't see why either of these are not perfect candidates for super prime rates.

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One of the case studies is a person who took out their loan in 2005. They ought to have significant equity and should not be a bad credit risk if they have never been in arrears (claimed in article).

All together now:

IO, IO, it's off to work I go

I did dig dig dig dig dig dig dig

With my subprime debt that's due

To dig dig dig dig dig dig dig dig

Its what I like to do

It ain't no trick

To get rich quick

If you dig dig dig

With the HPI schtick

In the subprimes..

In the subprimes!

Edited by Joan of The Tower

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Great article. Lets hope we get lots more.

The MMR and recently announced BoE mortgage meddling only mean that the banks are being asked to avoid tackling the risks in their mortgage books.

Four or four and a half percent LTI is simply way too high.

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And how much do they think a cheap mortgage deal will be?

'“I have been on an SVR of 5.99pc since April 2009 when my second two-year fixed term expired,”'

'She took out a £108,000 mortgage with GMAC in 2005'

'“I have never missed a payment or been in arrears, but I am struggling to make ends meet. My credit rating is excellent so I am not a high risk, but the company has treated me appallingly. I have been a customer for almost 10 years and yet no one will help me. I’m trapped on this deal because I’m currently studying, so I don’t meet other lenders’ affordability criteria.”'

What better rate does she think there's out there?

She hada short fixed rate deal, with a teaser rate.

She's now on the SVR.

Lets assume she's paid off half the mortgage (cough cough cough) after all, as she stresses, she's had the mortgage almost 10 years.

Nationwide list a 2 year fixed for 2.09%.

All the remortage deals revert to a SMR rate, which is currently 3.99%

50K @ 2% = 83/month.

50K @ 4% = 150/month

50K @ 6% = 250/month.

The repayment part will stay the same.

She's obviously not going to get a teaser rate again.

There's only 100 quid/month, 25/week between the SMR and here rate.

If she's having money problems then its not the mortgage causing the problem.

The mental health worker who's moved into her BTL should be looking to certify herself.

Again, 400->800/month is 100//week. Her London allowance wil more than cover that, and its going to be a lot cheaper than the rent, which have been inflated by a lot of halfwitted BTLers like, er, herself.

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I wish I could have sympathy for the failed buy to let landlord mental health worker in south east London with daughters called Delilah and Tellulah. Oddly I don't - do you think she would have cared about how her tenants could afford their rent?

Imagine parading your kids in the paper to get sympathy about your mortgage payments!

"My, my, my Delilah
Why, why, why Delilah
So before they come to break down the door
Forgive me Delilah I just couldn't take any more!"

Edited by MARTINX9

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The mental health worker who's moved into her BTL should be looking to certify herself.

Again, 400->800/month is 100//week. Her London allowance wil more than cover that, and its going to be a lot cheaper than the rent, which have been inflated by a lot of halfwitted BTLers like, er, herself.

Have a look at recent sales for houses in Charlton + pics http://www.rightmove.co.uk/house-prices/detail.html?country=england&locationIdentifier=REGION^85402&searchLocation=Charlton&referrer=landingPage

£350pm before BTL tracker lifted.

Isn't she exactly the sort of person who should be putting her home onto the market, looking to escape the market with a super high price? Instead, complacency it seems to me. And entitlement.

Shouldn't she count herself lucky the lender is allowing her to live in the property? Maybe her BTL lender doesn't have rules/terms some other BTL lenders apparently do. S'funny all the breakdowns people were having, and excuses they were offering, in 2008-2010 for over-borrowed. Well played saving all these sorts. Some of them are on new lives 3.0 with even more BTLs, or bomad double downs.

2014.

Herein lies the problem – if you might be living in the property, even for just one night, the mortgage on it needs to be regulated and the mortgage lender could be on the naughty step for not having ensured as much at the point of sale. This is why most lenders make it a condition of your buy to let mortgage that you don’t live in the property yourself, under any circumstances.

So when I said that living in a buy to let property was ‘impossible’, I was of course speaking figuratively – nothing is physically stopping you from regaining possession of the property and setting up kip. But doing so will in all likelihood invalidate your mortgage, and that is not something you want to do, because you may be asked to repay the whole thing in full.

https://www.commercialtrust.co.uk/btl/landlord-advice/landlord-law/live-in-buy-to-let/

2013

As I am about to be made homeless I wondered about moving into my flat when the current tenants' contract ends. My buy-to-let lender has told me that it doesn't allow this under any circumstances but it is technically not illegal. It just means that I might have problems with mortgages further down the line.

http://www.theguardian.com/money/2013/feb/06/move-in-buy-to-let-property

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