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kman

Halifax Doing 5x Salary

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mr freind just got a mortgauge for 5x his salary from Halifax and I don't mean self cert, what's going on?

Confidence in low IRs ought to allow higher multiples of salary. If you check the ratio of mortgage repayments to incomes, it's remained pretty stable over many years, i.e. when IRs are long-term low, multiples of income can rise. US IRs are now thought to be at their peak, taking the pressure off UK IRs

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Confidence in low IRs ought to allow higher multiples of salary. If you check the ratio of mortgage repayments to incomes, it's remained pretty stable over many years, i.e. when IRs are long-term low, multiples of income can rise. US IRs are now thought to be at their peak, taking the pressure off UK IRs

Yep, because the US has got inflation figures as fiddled as ours - they want people to take on more debt to cover the growing gap between their wages and rising real inflation

The US/UK dare not raise IR - they will stay low for some time yet - real inflation however, well, that's another story....

Edited by dnd

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Yep, because the US has got inflation figures as fiddled as ours - they want people to take on more debt to cover the growing gap between their wages and rising real inflation

The US/UK dare not raise IR - they will stay low for some time yet - real inflation however, well, that's another story....

Nothing wrong at all based on the bare facts. If he's a doctor, lawyer, banker, accountant or whatever, in a jobwith a measurable career and and (large) salary progression that mortgage will be 3x not 5x in a couple of years - so what? But, if he has no real income/salary leaps other than "wage inflation" (when available then he will be property "rich" "cash poor for a long long time.

I am about to borrow 5 times gross income but next year it will be 3 times gross income. What is wrong with that. I am a bear by the way and think things are going tits up nest year but this is my final house and I think I have found "value" in my price bracket based on 4 years ago prices so I have no "ladder" worries anymore.

Edited by Tempest

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Nothing wrong at all based on the bare facts. If he's a doctor, lawyer, banker, accountant or whatever, in a jobwith a measurable career and and (large) salary progression that mortgage will be 3x not 5x in a couple of years - so what? But, if he has no real income/salary leaps other than "wage inflation" (when available then he will be property "rich" "cash poor for a long long time.

I have just remortgaged to the Halifax (and am in one of the professions). They offered us 5.4 times my salary (did not even bother putting in missus' payslips) - we only needed 2.2 - they did try to push the MEW approach too.... - er no, I like having 60% equity thank you very much - and anyway there are not that many places to put it where it will make you more than you would pay on having borrowed it at the moment (apart from a Bulgarian ski chalet :) )

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Enough said...

Most people in professional careers will see their salaries rising as their careers progress. My son's mortgage (3.6 times salary when he took it out 3 months ago) is now only 3.3 following promotion, and at 25 he has a lot of headroom above him still.

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Most people in professional careers will see their salaries rising as their careers progress. My son's mortgage (3.6 times salary when he took it out 3 months ago) is now only 3.3 following promotion, and at 25 he has a lot of headroom above him still.

Expect the utility bills are going in the opposite direction though.

Dames :)

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The Shylock, er lending business is much like a Great White Shark. It survives if it keeps moving forward and eating its prey. If it becomes stationary it starves and dies. Hence the term "loan shark."

Lenders only make money when they lend. People who work for lenders are paid by commissions. If the lending stops a lot of people are in trouble. The latest trend is sub-prime lending because there is only the bottom of the barrel left. 5 X is a clear indicator of a market on its last legs. IMO, of course.

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mr freind just got a mortgauge for 5x his salary from Halifax and I don't mean self cert, what's going on?

Simple. They've run out of people who can buy a house by borrowing less than that. Watch, it'll be six times next... then seven. Wake me up when they're doing nine times, that's what I need. Not that I'd be so stupid!

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I am about to borrow 5 times gross income but next year it will be 3 times gross income. What is wrong with that. I am a bear by the way and think things are going tits up nest year but this is my final house and I think I have found "value" in my price bracket based on 4 years ago prices so I have no "ladder" worries anymore.

A 67% income jump in a year?! Tell me about it....

If this is going to be your final house, does that mean you're approaching retirement? How will you pay the mortgage on a pension? (What will the multiple be then, eh?)

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If this is going to be your final house, does that mean you're approaching retirement? How will you pay the mortgage on a pension? (What will the multiple be then, eh?)

Strewth... :blink::blink::blink:

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Confidence in low IRs ought to allow higher multiples of salary. If you check the ratio of mortgage repayments to incomes, it's remained pretty stable over many years, i.e. when IRs are long-term low, multiples of income can rise. US IRs are now thought to be at their peak, taking the pressure off UK IRs

This is a common fallacy.Firstly it's low real rates that matter, not low nominal rates.

Low nominal rates just result in a longer implied duration to the loan.

People should be using the extra money to repay the loan, as it won't be eroded by inflation.

At the end of the day you still have to repay the capital if you want to buy the house.

But of course nobody wants to figure this one out...

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Like a chart of a stock racing to a spike peak, and then crashing back down...

so will be the changes in credit standards, which have gotten looser and looser in competition for business,

and may soon crash back to what they once were (from 100% back to 60%- in a hurry?)

WE WILL MOVE BACK to the past, and it will feel like progress

Will credit tightening happen quite quickly? Has anyone experienced/remember any credit tightening in the past? When? Or is this a first?

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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