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Millenials And Btl Ltvs

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From those that I speak to, more and more FTB/millenials are buying houses on 30 year mortgage terms. I don't know the broader figures nationwide but '30' seems to be the new 25 year term.

Also, the LTV required for BTL mortgages which seem to be creeping up (i.e. Nationwide requiring 40% deposit) won't give many landlords anything to worry about - they will just grossly exaggerate their property value so that the loan is relatively small compared to their estimated property value. This will be particularly evident in re-mortgaging landlords.

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I don't think the LL gets to value their own property? Or am I missing something?

Officially? No, but the landlord has significant influence over the valuation because they are the lender's customer and; the customer is always right.

Lenders compete with each other for LL's business

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Officially? No, but the landlord has significant influence over the valuation because they are the lender's customer and; the customer is always right.

Lenders compete with each other for LL's business

???

Surveyor works for the bank, not the LL.

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I thought I read yesterday that 85 is the new 65 in terms of mortgage terms??

Also I know two couples mid thirties recently who have bought on 35 year mortgages. Christ on a bike no one can see past the monthly payments "same as we're paying in rent, innit?"

Edited by thewig

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30 year mortgage does not tally with FTB average age of 40.

MMR will not allow mortgage beyond 65.

Plenty of lenders do - MMR does not put an age restriction on - it would be age descrimination for a start, particularly as it no longer links to the future state retirement age.

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I thought I read yesterday that 85 is the new 65 in terms of mortgage terms??

Also I know two couples mid thirties recently who have bought on 35 year mortgages. Christ on a bike no one can see past the monthly payments "same as we're paying in rent, innit?"

What can go wrong - just rent it out. Innit?

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I bought our current house on a 30 year term due to the lower monthly repayment, but as is well documented on here I've been over paying and on track to clear it under 25 years, hopefully a lot less. Nothing wrong with 30 year mortgages in principle, but I suspect most are taking house out to increase borrowing ability.

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I thought I read yesterday that 85 is the new 65 in terms of mortgage terms??

Also I know two couples mid thirties recently who have bought on 35 year mortgages. Christ on a bike no one can see past the monthly payments "same as we're paying in rent, innit?"

Yes but the majority have been brainwashed into this. Mobiles, cars, housing it's all down to the monthly repayment.

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I bought my first home in 2005 on a 25 year term.

I bought my second home in 2015 on a 25 year term...

You do the Math. 30 year terms is only half the story.

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Officially? No, but the landlord has significant influence over the valuation because they are the lender's customer and; the customer is always right.

Lenders compete with each other for LL's business

We'll see how that works out over the next five years.

At present the rule the BTL lenders appear to be applying is that the lender always appoints an LPA receiver at the first sniff of trouble and sells off property till they're happy any risk is back with the "customer".

Whilst there is certainly still competition for landlord business right now, I am not aware of the recent PRA review of BTL underwriting practices giving any indication that dodgy valuations where a basis for concern.

I think that it's wrong to think of the lenders as seeing the BTL borrowers who are customers who are always right.

The BTL borrowers played one role in the run up to 2008; they were a mechanism by which mortgage credit was poured into the economy, and probably up to that point some valuation practices were pretty dodgy.

However, there is plenty of evidence (higher LTVs, portfolio value limits) that post-2008, and particularly post Bradford & Bingley, the lenders want to be more confident that the borrower is taking all the risks - particularly for new lending. There is no point setting up a situation where you ensure you have a fall guy if you don't plan to make effective use of the fall guy when the time comes.

The BTL customer will be useful to the bank until they aren't, and when they are no longer useful the banks will f**k them over in an instant. Talk to anyone who has experience of commercial loans where they bank decided that they wanted shot of the risk and you'll get an intimation of the folly of reading the bank's relationship with its commercial borrowers as one in which the customer is always right. Not for nothing is the joke that a banker is someone who will lend you an umbrella when the sun is shining, but wants it back when it starts raining.

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I bought my first home in 2005 on a 25 year term.

I bought my second home in 2015 on a 25 year term...

You do the Math. 30 year terms is only half the story.

Yes, you're right:

(2015-2005)+25+25=60

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Yes, you're right:

(2015-2005)+25+25=60

:lol: not quite.

Even for someone quite prudent, low wage inflation and inflated asset prices mean I've had to extend my borrowing term in that time - 35 years to buy a house, not 25, not 30.

It's not a ladder we're climbing, it's a down escalator we're attempting to climb.

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I bought our current house on a 30 year term due to the lower monthly repayment, but as is well documented on here I've been over paying and on track to clear it under 25 years, hopefully a lot less. Nothing wrong with 30 year mortgages in principle, but I suspect most are taking house out to increase borrowing ability.

Unless we only have 25 yrs of resources left :unsure:

Earth 'will expire by 2050'

http://www.theguardian.com/uk/2002/jul/07/research.waste

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[...] However, there is plenty of evidence (higher LTVs, portfolio value limits) that post-2008, and particularly post Bradford & Bingley, the lenders want to be more confident that the borrower is taking all the risks - particularly for new lending. There is no point setting up a situation where you ensure you have a fall guy if you don't plan to make effective use of the fall guy when the time comes.

The BTL customer will be useful to the bank until they aren't, and when they are no longer useful the banks will f**k them over in an instant. Talk to anyone who has experience of commercial loans where they bank decided that they wanted shot of the risk and you'll get an intimation of the folly of reading the bank's relationship with its commercial borrowers as one in which the customer is always right. Not for nothing is the joke that a banker is someone who will lend you an umbrella when the sun is shining, but wants it back when it starts raining.

The biggest whinges I get are from people who say that their bank won't lend them money, and the second biggest is the story of what the bank did to them when they went bust. People joke that a bank is a company that lends umbrellas when it's not raining. There's some truth, perhaps, in that, but to be fair, if it was my business to lend umbrellas I wouldn't lend one to a person plunging over a cliff in flames. OK, it ay slow the descent a little, but it only marginally delays the inevitable, and I would have lost my umbrella which is my business.

Look, I am not over-fond of banks myself, but they should be looked upon as a kind of neutral.

Go It Alone - Geoff Burch

It happens. Is anyone still sobbing for early 90s Serpico, forced to sell his mansion, after his life of top horses, own plane, and total excess into the early 90s recession. How about the guys who bought part of his business so cheap as to - part of the commercial premises. Chucked in an offer at something like 80% below "What it is worth" and bank accepted it. Then ran their business like muppets, spending so freely, and lost their own homes. Life moves on. Just a reflection. Not there to guarantee your mad-gainz-win for all borrowers. Much better that, than bailouts and innocents carrying ever more weight to protect mad-gainz of those who must not be allowed to fail or lose value.

[...]Hence now the execs at the big lenders know two things. Firstly, they will be allowed to go bust, because they will just be unfussily swept into UKAR. Secondly, they will know that if the bank they run goes bust, they will lose their nice little troughing job, and they won't get another so good. They are going to throw the buy-to-let investors under the bus at the first sniff of trouble and each lender will know that they mustn't dawdle with the mercy killings as their competitors would seize on the error by getting hold of and disposing the assets on which their loan books were secured before the oppo did.

The mechanics of all the leverage and the incentives for the lenders to murder their customers are extraordinary.

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[...]The big house valued by the bank at £195 went on the market and the showroom/flats etc at £225 a lot of money at the time, no takers appeared everyone was skint, my wife immediately got a job as a Superintendant Pharmacist and company director, which kept food on the table.

Everyone was skint and going bust and house were in real recession and not selling eventually we sold the house under extreme pressure from the bank for £110 to a Neuto Surgeon.

The business premises had lain empty with no interest, then two guys knocked on the door and asked about it, I told them whilst I had the property for the bank would have agree a price. Do you think they would accept £40K? I told them I wuld not agree to that. What if we give you £40K for yourself and a brand new car and a good job? and then offer the bank £40K?

After discussing this for sometime they told me they were in the building trade and they wanted to open a kitchen studio in the showroom a joinery workshop and do up and either sell or rent the flats. and pay me two £20K lump sums at the end of the first and second years trading. I checked them out and they were genuine and on had two new heavy lorries in in a haulage business. I agreed to let them try the bank at the £40K, I had nothing to lose the security contract I had signed restricted the bank only to property I was amazed the bank accepted their offer leaving a £160K shortfall, At first I bluffed and refused the bank authority to sell at that price unless their legal boys drafted a wateright agreement that if the house sold at £110 and the business premises at £40K I would be clear of all liabilities that stood at £350 most of which was compounded interest anyway.

The deal was done and they immediately put me on their books as finance director of a new limited company, the brand new Nissan Laurel 2.4 automatic was handed over as promised and they signed an agreement that the car was part payment against the property and the first £20K was due in 12 months and the second in 24. Quite frankly I would have been happy to walk away clear of the bank liability with nothing.

[...]everything went well for a while but these guys went beserk with their borrowing and Lloyds were throwing money at them they spent a fortune on joinery equipment new van and pickup and fitting out the studio, two more Laurels for themselves and two new smaller Nissans for sales staff after six moinths I was warning them of their spending and t5hey had not incorporated the limited company and they were still just partners in the business, they also had their homes up as security and plus the transport business.

The outfit lookd a million dollars but it was losing money hand over fist with the employed skilled tradesmen, instead of contracting out the kitchen fitting. I knew I was not going to see the first £20K fourteen months after buying a creditor petioned for their bankcruptsy and the bank pulled the rug they lost their homes and everything.

*Spelling mistakes due to his age and eyesight* - hpc didn't kill him... brought some back to earth and created opportunity for others (although some messed it up).

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