nome Posted November 28, 2018 Share Posted November 28, 2018 6 hours ago, longgone said: OMG quarter million debt just 6 years after leaving school. that will be more than half his income. NUTS In the eyes of the goverbankment he is the perfect citizen... a lifelong, obedient, compliant mortgage slave worker drone. Quote Link to comment Share on other sites More sharing options...
spyguy Posted November 28, 2018 Share Posted November 28, 2018 14 hours ago, JohnLondon said: My friends son has just managed to get a mortgage with Metro Bank. He’s 22yrs old, FTB on an annual income of £28,000 & has had a mortgage offer for £240,000. The purchase price of the property s £270,000 Id question those figures. After bills and whatnot, that will be more than than his disposable cash. If he *did* get that mortgage then Metro are not long for this world. Quote Link to comment Share on other sites More sharing options...
Si1 Posted November 28, 2018 Share Posted November 28, 2018 17 minutes ago, spyguy said: Id question those figures. After bills and whatnot, that will be more than than his disposable cash. If he *did* get that mortgage then Metro are not long for this world. https://www.trinityfinancialgroup.co.uk/article/metro-bank-raises-mortgage-income-multiple-to-55-times-salary-for-professionals Quote Link to comment Share on other sites More sharing options...
Andy T Posted November 28, 2018 Share Posted November 28, 2018 15 hours ago, JohnLondon said: My friends son has just managed to get a mortgage with Metro Bank. He’s 22yrs old, FTB on an annual income of £28,000 & has had a mortgage offer for £240,000. The purchase price of the property s £270,000 Insane. From what I remember, Metro Bank only do mortgages for London/The south? Surely he must have a job where there's proof of large pay rises coming shortly. 9x joint income would be bad enough, but 9x single income?? he looses his job then what? A quick look at their mortgages, 90% LTV would be 2.29% over 2 years. It states 'Any type of contract workers accepted'. Also mentions AirBnB - they let you rent it out for up to 90 days etc. etc. Sounds like a bank that might end as the next Northern Rock style collapse. Quote Link to comment Share on other sites More sharing options...
spyguy Posted November 28, 2018 Share Posted November 28, 2018 1 hour ago, Andy T said: Insane. From what I remember, Metro Bank only do mortgages for London/The south? Surely he must have a job where there's proof of large pay rises coming shortly. 9x joint income would be bad enough, but 9x single income?? he looses his job then what? A quick look at their mortgages, 90% LTV would be 2.29% over 2 years. It states 'Any type of contract workers accepted'. Also mentions AirBnB - they let you rent it out for up to 90 days etc. etc. Sounds like a bank that might end as the next Northern Rock style collapse. Ive never really seen that, not a any level of guarantee that a bank would lend against. Quote Link to comment Share on other sites More sharing options...
spyguy Posted November 28, 2018 Share Posted November 28, 2018 1 hour ago, Si1 said: https://www.trinityfinancialgroup.co.uk/article/metro-bank-raises-mortgage-income-multiple-to-55-times-salary-for-professionals My friends son has just managed to get a mortgage with Metro Bank. He’s 22yrs old, FTB on an annual income of £28,000 & has had a mortgage offer for £240,000. The purchase price of the property s £270,000 Thats 9.6 times. The maximum loan size for 5.5 times income is £2 million if you have a 25% deposit. It reduces to £1.5 million if you have a 20% deposit and it's £1 million if you have a 15% deposit. With a 10% deposit, the mortgage is capped at £500,000. He would also need to be putting down ~60k as a deposit. I still call BS. Or fibs. Quote Link to comment Share on other sites More sharing options...
spyguy Posted November 28, 2018 Share Posted November 28, 2018 1 hour ago, Andy T said: Insane. From what I remember, Metro Bank only do mortgages for London/The south? Surely he must have a job where there's proof of large pay rises coming shortly. 9x joint income would be bad enough, but 9x single income?? he looses his job then what? A quick look at their mortgages, 90% LTV would be 2.29% over 2 years. It states 'Any type of contract workers accepted'. Also mentions AirBnB - they let you rent it out for up to 90 days etc. etc. Sounds like a bank that might end as the next Northern Rock style collapse. Might??? https://ftalphaville.ft.com/2016/02/01/2151409/we-need-to-talk-about-metro-banks-weird-balance-sheet/ https://www.ft.com/content/edfdd1cc-d754-11e8-ab8e-6be0dcf18713 https://www.ft.com/content/4ced38de-4872-11e8-8ee8-cae73aab7ccb https://ftalphaville.ft.com/2016/07/12/2169060/metro-banks-on-fire/?ft_site=falcon&desktop=true All good esp. the last one. Quote Link to comment Share on other sites More sharing options...
MattW Posted November 28, 2018 Share Posted November 28, 2018 The Money GPS: Quote Link to comment Share on other sites More sharing options...
InlikeFlynn Posted November 28, 2018 Share Posted November 28, 2018 14 hours ago, pizza said: Just done the maths on this. Monthly payments on the best 2 year fixed deal I could find at 1.79% are £993. Monthly after tax income is £1,869. So more than 50% of take home pay spent on debt service. He will probably have a mortgage term of 35 years or more, to get the monthly payment down to comply with MMR rules. Welcome to the new "interest only".... Quote Link to comment Share on other sites More sharing options...
Kosmin Posted November 28, 2018 Share Posted November 28, 2018 On 27/11/2018 at 12:16, longgone said: i took a mortgage out in 2003 and was asked for 3x payslips. i made sure i took a set which had plenty of overtime and other payments on them. they offered me 150k pretty sure it was only 3.5x earnings I thought it was always latest three payslips! 15 hours ago, pizza said: Just done the maths on this. Monthly payments on the best 2 year fixed deal I could find at 1.79% are £993. Monthly after tax income is £1,869. So more than 50% of take home pay spent on debt service. It depends on the house. If he can let a spare room for £500 then it's more like 25%. Quote Link to comment Share on other sites More sharing options...
longgone Posted November 28, 2018 Share Posted November 28, 2018 27 minutes ago, Kosmin said: I thought it was always latest three payslips! It depends on the house. If he can let a spare room for £500 then it's more like 25%. not 15 years ago although it was nationwide Quote Link to comment Share on other sites More sharing options...
longgone Posted November 28, 2018 Share Posted November 28, 2018 6 hours ago, nome said: In the eyes of the goverbankment he is the perfect citizen... a lifelong, obedient, compliant mortgage slave worker drone. certainly sounds that way. Quote Link to comment Share on other sites More sharing options...
JohnLondon Posted November 28, 2018 Share Posted November 28, 2018 18 hours ago, Si1 said: Was help to buy involved? No help to buy Quote Link to comment Share on other sites More sharing options...
JohnLondon Posted November 28, 2018 Share Posted November 28, 2018 17 hours ago, adarmo said: Where'd the 30k deposit come from and is he buying on his own? Irritatingly i posted this same story (but via the guardian) a day or two ago but the moderators didnt approve it The deposit is from his savings & yes, he is buying on his own Quote Link to comment Share on other sites More sharing options...
JohnLondon Posted November 28, 2018 Share Posted November 28, 2018 3 hours ago, spyguy said: My friends son has just managed to get a mortgage with Metro Bank. He’s 22yrs old, FTB on an annual income of £28,000 & has had a mortgage offer for £240,000. The purchase price of the property s £270,000 Thats 9.6 times. The maximum loan size for 5.5 times income is £2 million if you have a 25% deposit. It reduces to £1.5 million if you have a 20% deposit and it's £1 million if you have a 15% deposit. With a 10% deposit, the mortgage is capped at £500,000. He would also need to be putting down ~60k as a deposit. I still call BS. Or fibs. I’ve seen the mortgage offer & I know what he earns. I didn’t believe it at first either when my friend told me but I’ve seen the paperwork. From my experience, what a bank/ lender states on its website & what goes on in reality can be very different Quote Link to comment Share on other sites More sharing options...
Kosmin Posted November 28, 2018 Share Posted November 28, 2018 3 minutes ago, JohnLondon said: I’ve seen the mortgage offer & I know what he earns. I didn’t believe it at first either when my friend told me but I’ve seen the paperwork. From my experience, what a bank/ lender states on its website & what goes on in reality can be very different It's normally the other way round though. I had an offer in principle from HSBC about five years ago. It was based on my salary, deposit and credit check. They then reduced this by about 12,000 once I found a place and gave some info about the costs (all very low, which makes me think they never intended to lend the original figure). Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted November 28, 2018 Share Posted November 28, 2018 16 hours ago, pizza said: Just done the maths on this. Monthly payments on the best 2 year fixed deal I could find at 1.79% are £993. Monthly after tax income is £1,869. So more than 50% of take home pay spent on debt service. Thanks for that, of course interest rates can go up - so he and the bank are in a dangerous position. Quote Link to comment Share on other sites More sharing options...
Kosmin Posted November 28, 2018 Share Posted November 28, 2018 4 hours ago, Si1 said: https://www.trinityfinancialgroup.co.uk/article/metro-bank-raises-mortgage-income-multiple-to-55-times-salary-for-professionals The link looks like 55 times! I clicked the link just to check they weren't that crazy. I wonder if actually banks are lending 5 or 5.5 times to a small group of people (usually professionals, as in the link quoted, who may be assumed to have stable earnings and probably pay rises) because they are constrained elsewhere. They can only lend above 4.5 times to 15%, but perhaps lots have children, credit cards etc. so there are a large number borrowing much less than 4.5 times income. Quote Link to comment Share on other sites More sharing options...
JohnLondon Posted November 28, 2018 Share Posted November 28, 2018 15% of a lenders overall lending can be in excess of 4.5X LTI. There is no upper limit as long as the application passes it’s affordability checks Quote Link to comment Share on other sites More sharing options...
zugzwang Posted November 28, 2018 Share Posted November 28, 2018 6 minutes ago, iamnumerate said: Thanks for that, of course interest rates can go up - so he and the bank are in a dangerous position. Fortunately, there's a higher force at work ensuring that UK interest rates remain <1% forever. Quote Link to comment Share on other sites More sharing options...
spyguy Posted November 28, 2018 Share Posted November 28, 2018 29 minutes ago, iamnumerate said: Thanks for that, of course interest rates can go up - so he and the bank are in a dangerous position. Well thats it. MMR stress tests at 6% Quote Link to comment Share on other sites More sharing options...
GregBowman Posted November 28, 2018 Share Posted November 28, 2018 On 27/11/2018 at 11:22, spyguy said: Thast not what I experienced when I remortgages 2 years ago with HSBC. They checked everything. Wanted copies of bills, partners income and spend. And this was for a 0.8 LTE 5 year fix. Exactly my experience recently when organising my Daughters mortgage with my wife on it. Were very sniffy re her pension something like 5% but the Gov is throwing in 19% or something silly so thought no big deal. My wife always looked employed through my business of which I only won a third but they wanted all accounts etc when she is legally an employee like anyone else Quote Link to comment Share on other sites More sharing options...
GregBowman Posted November 28, 2018 Share Posted November 28, 2018 47 minutes ago, Kosmin said: It's normally the other way round though. I had an offer in principle from HSBC about five years ago. It was based on my salary, deposit and credit check. They then reduced this by about 12,000 once I found a place and gave some info about the costs (all very low, which makes me think they never intended to lend the original figure). Exactly my recent experience Quote Link to comment Share on other sites More sharing options...
JohnLondon Posted November 28, 2018 Share Posted November 28, 2018 Rules have changed, mortgage offers are now binding which means they cannot just change their minds Quote Link to comment Share on other sites More sharing options...
Riedquat Posted November 28, 2018 Share Posted November 28, 2018 2 hours ago, JohnLondon said: Rules have changed, mortgage offers are now binding which means they cannot just change their minds Presumably subject to the details given when the mortgage in principle was offered being confirmed, otherwise we'd be effectively back to self cert. Quote Link to comment Share on other sites More sharing options...
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