Desparate F T B S Are Using Cash Back Mortgages To Get In

[Realistbear]

http://www.whatmortgageonline.co.uk/news1/...p?unqueid=16992

First-time buyers opt for

free

cash.

Cash back mortgages soared over 200 per cent in March

, with 11 per cent of borrowers opting for them compared to only three per cent in February, the latest Mortgage Direct survey has revealed.

“Cash back mortgages are winning them over as they see the immediate benefit of receiving cash on completion to help finance vital purchases, such as basic furniture or to even recuperate the amount invested in legal fees etc.”

Gladdy said: “The increase in borrowers opting for two-year fixed rate mortgages indicates that

borrowers are now incredibly rate sensitive

. They are opting for the lowest deal available and two-year fixed rates have been among the most competitive.”

So the market for FTBs is now dependent on "free" cash. "Free" cash is truly a feature of Gordon's "Miracle Economy" where everything is free.

"IR sensitive" at a time when IR are moving up bodes well for financial trouble and repossession figures that will make recent rises seem like a mear trickle.

[Seamaster]

So?

I was offered a cash-back mortgage by the Rock back in 1997, during the period popularly described as a slump.

[Wickedkitten]

I think it's probably more dependent on the fact that 1000 is probably .01% of the amount of interest that the bank is going to be earning off you anyway so they may as well give it to you, especially when they can get it back usually if you change your mortgage in a specified time period.

Don't see the point of this topic to be honest.

[Converted Lurker]

I think it's probably more dependent on the fact that 1000 is probably .01% of the amount of interest that the bank is going to be earning off you anyway so they may as well give it to you, especially when they can get it back usually if you change your mortgage in a specified time period.

Don't see the point of this topic to be honest.

Six days old this news. Realistbear, keep up FFS

[bubbleturbo]

So?

I was offered a cash-back mortgage by the Rock back in 1997, during the period popularly described as a slump.

That may be so, but it seems you are missing the point. The significant aspect is that there is a huge increase in the number of these mortgages being sold.

People would only take out a mortgage such as this if they were desperate for cash and pushing the limit of affordability.

[Guest]

... at a time when the avg house was 3 x avg salary.

You'd never have been repossessed if you went tits up: There would be people queueing up to buy without any particular "IR sensitivity" concerns.

Which, now I think of it, is precisely RealistBear's point.

[Bingley Bloke]

It just goes to show how stupid people are when they'll pay tens of thousands more for something than it's worth 'cause they know they'll get a few hundred back after they've bought it. Perhaps I should start advertising £1 coins for sale at £50 each. Clearly there's plenty falling for such scams

[othello]

The bubble is growing.

[ʎqɐqɹǝʞɐɥs]

Six days old this news. Realistbear, keep up FFS

Yeah I noticed hes been flagging recently.

[LivingTheDream-JustLikeLeedsUtd]

They need to get the cash back to pay off their 0% credit cards they used to generate a deposit.

[Seamaster]

It just goes to show how stupid people are when they'll pay tens of thousands more for something than it's worth 'cause they know they'll get a few hundred back after they've bought it.

Thing is, I remember being told "how stupid people are" and what "a scam" it was, for exactly the same reasons, ten years ago. I didn't go for it myself, but I know a few FTBs back then who did, and it worked out pretty well for them. They bought a place, used the additional capital to fix it up, furnish it, etc, lived comfortaby for a few years and then moved on with a big deposit to show for it. Nice.

[Bingley Bloke]

Thing is, I remember being told "how stupid people are" and what "a scam" it was, for exactly the same reasons, ten years ago. I didn't go for it myself, but I know a few FTBs back then who did, and it worked out pretty well for them. They bought a place, used the additional capital to fix it up, furnish it, etc, lived comfortaby for a few years and then moved on with a big deposit to show for it. Nice.

Ten years ago the average house price wasn't six time the average salary, so I wouldn't have called it a scam then. But today, enticing someone to pay twice what something is worth by offering refund maybe 2% of the overcharge, certainly is a scam. Can you see the folks who've fallen for it in the last year or so having massive equity to deposit on their next purchase in another five to ten years? I think not.