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The Eu Does Something Right! "british Homeowners Must Remortgage Now To Avoid New 'bonkers' Eu Rules"

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http://www.express.co.uk/finance/personalfinance/573788/Martin-Lewis-urges-British-homeowners-remortgage-now-avoid-new-bonkers-EU-rules

Personal finance expert Martin Lewis, founder of website MoneySavingExpert.com, has advised mortgage holders to check they are on the right deal and look for a better rate as soon as possible.
The new EU laws could see UK homeowners stranded on their lender's expensive Standard Variable Rate (SVR) when their mortgage term comes to an end.
The EU 'Mortgage Credit Directive' officially comes into force in March 2016 but can be backdated by six months.
In effect, the directive is an extension of the mortgage affordability criteria that was introduced into Britain last year.
The stringent rules stress test borrowers to make sure they can afford their mortgage deal, not just now but if interest rates were to rise to six or seven per cent. (AND THIS IS CONSIDERED BONKERS, MARTIN LEWIS IS A TOSSER)
Under British rules lenders can bypass the checks when an existing homeowner is remortgaging. But under the EU directive lenders won't be able to do this.
It means that remortgaging customers could find themselves turned down for a deal, which would leave them lumbered with a higher rate SVR.
"Ridiculously, people are being told you can't afford a cheaper deal," said Mr Lewis.

OBLIGATORY VICTORY SONG

The roof, the roof, the roof is on fire. We don't need no water let the motherfkr burn.

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EU rules?

Errrrr.......so is this article, in effect, presenting another rationale/argument in favour of Brexit???

Given how sacred low mortgage rates are to homeowners up and down the land anything to threaten the ease at which low rates can be procured will get the chop? Never mind all the various pros for the EU.

I can hear the cry already....."put at risk my ability to remortgage at a low rate? Brexit for me it is!"

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EU rules?

Errrrr.......so is this article, in effect, presenting another rationale/argument in favour of Brexit???

Given how sacred low mortgage rates are to homeowners up and down the land anything to threaten the ease at which low rates can be procured will get the chop? Never mind all the various pros for the EU.

I can hear the cry already....."put at risk my ability to remortgage at a low rate? Brexit for me it is!"

No no no Dave & George &co said mortgage rates would go up if we leave the EU ...now they wouldn't be trying to scare people whilst lying through their teeth at the same time would they knowing full well they will be going up for many anyway

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An excellent idea, stress test for 6% or 7% which if they happened would lead most likely to a financial crisis. Genius. Rates won't get that high with existing debt, unless they deliberately want to trigger a default!

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I'm no fan of Brussel's, but this policy of making sure morgage owners can repay if there is a change of 6% IR is very prudent. Almost as good as a 3.5x income mortgage rule.

Almost as if the EU have decided we should spend spare income in the wider economy rather than on housing.

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Almost as if the EU have decided we should spend spare income in the wider economy rather than on housing.

Got to keep the German car industry afloat, most folks can only afford to drive around in a new car if it is a lease funded by a windfall 'deposit'.

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Got to keep the German car industry afloat, most folks can only afford to drive around in a new car if it is a lease funded by a windfall 'deposit'.

You mean a deposit provided by a re-mortage perhaps on withdrawal of equity?

The idea is sound but I will take anything to get a BREXIT. Once achieved the end result will be the same anyway.....

Anyway didn't the BOE instigate all this with MMR? EU are just playing catch up......

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I should also add that, given the EU's history and appalling track record of managing its own finanaces and obeying their own 'rules', I find more than just a little ironic that they should lecture us on what practices should be followed for reasons of economic prudence.

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What's bonkers about it? Since there are no margin clauses on an OO mortgage, it's the banks only way of saying "****** off, we don't want your business. Sell the house, pay us what you owe, and ****** back off on the horse you rode in on". It's only bonkers if you assume the intention is for the borrower to agree to it.

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I dunno if I were renewing now I'd go for a fixed 5 year or as long as possible. Wouldn't normally go for fixed but Brexit possibility would be making me nervous (still voting leave though)

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Guest BillyNI

Linked article is dated 1st May 2015.

just have to say look ^^^^^^^^^

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Became law March 21st 2016. Been following the run up on another hpc thread.

Can only blame yourselves if you didn't see it coming, on the forever HPI / owners are the power of the land / hpc not possible, side of the market.

MoneySavingExpert: I’m taking on the EU mortgage credit directive – it’s going to create many mortgage prisoners

April 30, 2015

Ensuring people can afford their mortgage is crucial. Yet the EU Mortgage Credit Directive, which officially starts in March 2016 (but in practice much earlier), will see many being told they "can’t afford a cheaper mortgage".

This isn’t right, so MoneySavingExpert.com and I are going to make it a campaign priority. I’m not sure how much we can change it, but we’ll try.

Ludicrous lending decisions have already started

The UK Mortgage Market Review, introduced a year ago, included provisions designed to fit within the EU directive. It introduced the mortgage affordability check – designed not just to see if you can afford a mortgage at your current rate, but if rates were 6-7% – a good thing for first-time buyers or those looking to increase their debts.

Yet the same rules apply even for those who are remortgaging – in other words, staying in the same house and not borrowing more, but just switching mortgage deals to try to get a better rate. So, ridiculously, some people are already being told YOU CAN’T AFFORD A CHEAPER DEAL.
.
.
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Things are about to get worse
The EU’s Mortgage Credit Directive won’t allow lenders to waive affordability checks at all.

lot more http://blog.moneysav...gage-prisoners/

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Became law March 21st 2016. Been following the run up on another hpc thread.

Which other thread?

Do we have a link to the official document (from the EC, I presume)?

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This thread. Only bits and pieces.

It's complicated - meaning I don't fully understand it, apart from telling it looks like it could have sharp consequences on those who thought it their right to have access to cheap debt - and has only just come into effect.

27th January 2016
...As well as the looming start date, there exists a misconception in some quarters that the MCD applies only to second charge mortgages and therefore will not impact upon intermediaries that do not offer secured loans to their customers.

Leaving aside the obvious fact that advisers should be offering their clients the widest range of products in order to increase the chances of finding them the most suitable one, the reality is that the impact of the MCD will reach beyond conventional second charge mortgages.

A host of loans that are currently not regulated or can utilise exemptions to remain so will become regulated on 21 March. Varied examples include lending to experienced landlords who secure loans on their investment properties for the purpose of their residential property; or lending to purchase or renovate a buy-to-let property where the borrower is doing so as a consumer rather than acting for the purposes of business (such as an inherited property).

https://www.mortgage...d-charge-loans/

http://www.housepricecrash.co.uk/forum/index.php?/topic/201726-will-buy-to-let-investors-be-caught-out-by-eu-rules/

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This thread. Only bits and pieces.

It's complicated - meaning I don't fully understand it, apart from telling it looks like it could have sharp consequences on those who thought it their right to have access to cheap debt - and has only just come into effect.

I like complicated... but, despite that, I can't make head-nor-tail of it, at the moment.

https://www.the-fca.org.uk/mortgage-credit-directive

I can't find anything that relates to stress-testing customers.

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odd then, that the average mortgage has gone up since.

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No no no Dave & George &co said mortgage rates would go up if we leave the EU ...now they wouldn't be trying to scare people whilst lying through their teeth at the same time would they knowing full well they will be going up for many anyway

Thats about what they are doing yes. They are a disgrace.

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This is actually something good that the EU have done for a change. I think the bank lending rules in Ireland are also an EU idea?

Lars Frisell, adviser to Central Bank governor Philip Lane"“One thing is clear – allowing lending and prices to spiral off again is not a solution, and would be a betrayal to the next generation of Irish home buyers,” he said. “Higher deposit requirements slow individual households’ entry into the property market, but. . . they prevent us from overbidding each other with ever-increasing amounts of borrowed money.”

People are moaning that they can't borrow enough to afford property in Dublin. Eventually prices will have to come down then!

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