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vfr

What Is The Uk Subprime Market?.

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Working example (x = original puchase date Feb 2001 on 3 times joint income)

:- I sold my latest house 19 months ago after owning it for 5 years and I sold it to a self employed person in a fairly volatile business. He struggled to get a mortgage even though he had a 2 year trading history of 100k a year. So how did he get it. He paid 5.99% which almost ‘then’ scuppered the deal as it pushed him to the monthly limit. Myself I’d remortgaged 20 months (x + 36 months) before on a fixed 2 year rate and was trying to time my exit. I didn’t quite make it and ended paying 1% redemption but then I only had one buyer interested so was playing hard to get, yet underneath was sweating like a pig as I felt I was getting top price. Any new rate I would take on again at the time would have cost us about £350 a month more and I’d have had to tie in for 2 more years to get that rate (x + 84). Not something I wanted to do. When I bought the property my wife was working but within a year she stopped which improved the quality of our lives but meant less foreign holidays , dinners and no more expensive home improvements but loads more time to realx without manic food shopping trips on the weekend. Still we struggled to contain costs within my income (the mortgage seemed massive and council tax continued to rise along with petrol and shopping seemed to be going through the roof ) so on both occassions when remortgaging we split the capital repayment in half and kept that on the new mortgage to pay off any credit cards that had slowly accumulated. Not massively but they needed sorting nonetheless. Then on year 3 we re-mortgaged on a very good fixed rate which I got because with the HPI we had so much equity (more than 40%). On income alone I would not have got the mortgage and would have had to go onto variable rate (ouch!). During this period my income had dropped by 15% . The guy that bought my property has had a bad year (we keep in touch through business) and will in 4 months have to remortgage. I keep an eye on house prices in the area and can say that if he had sold 3 months ago he would have got 3% more if he was lucky. He will be considered sub prime and the cost of his mortgage will be £2,700 per month on todays variable rates. How many people on the website know similar stories. Under stricter lending 3.5 x salary (and I have a decent income, 3 times the national average ) the same house would have to drop by 50% for me to afford it with a 15% deposit. Am I subprime? or ask your self the same question Not if there is a massive correction with the now inevitable HPC. The only way is down.

and the real killer would be that in not bieng able to prove your income and going on a variable rate you can not increase your capital and therefore no longer have a get out of jail free card to meet any credit card debts. it's not looking good at all.

Edited by vfr

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You're sub prime if you have a history of failed payments and ccjs.

From wiki.

Subprime lending is typically defined by the status of borrowers. A subprime loan is, by definition, a loan made to someone who could not qualify for a more favorable rate. Subprime borrowers typically have low credit scores and either a limited credit history, or histories of payment delinquencies, charge-offs, or bankruptcies. Because subprime borrowers are considered at higher risk to default, subprime loans typically have less favorable terms than their traditional counterparts. These terms may include higher interest rates, regular fees or an up-front charge.

Subprime is not only what you say it is only typical of what is defined as subprime (typical = prime example). It is more empcompassing and this is what I was trying to make more obvious to people who think "that can't mean me!"

Edited by vfr

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Definition of "Sub Prime" *

Sub Prime: "Sub Prime" is an American phenomonum created by the Americans in America. In America some lenders have been lending to people who really should not have been given mortgages (like people on minimum wage, people who live in trailer parks, people on welfare and to raccoons, dead dogs and people aged over 100).

In the UK our lenders are much stricter and more responsible in who they chose to lend money to. That is why we DO NOT have anything to worry about in Britain concerning house price falls or increased home reposessions because everybody can easilly pay their 8 times salary IO mortgages. I must reiterate that eight times IO mortgages are NOT sub prime because as I mentioned earlier sub prime is an American problem.

Moreover, in the UK we have what is known as a "breath test" where we use a mirror to check whether the person taking out the loan is alive. Therefore, I would like to inform the FSA that we would never give a mortgage to a dead raccoon (more likely to be a squirrel in the UK in any event as I have not seen many raccoons in my neck of the woods) or a dead dog. Now move along please good sheeple citizens of the UK and remember to buy a house tomorrow as you may get locked off the ladder FOREVER!!!

Morons Thank you.

* (according to UK Vested Interests involved in making huge sums of money in the residential property sector).

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Definition of "Sub Prime" *

Sub Prime: "Sub Prime" is an American phenomonum created by the Americans in America. In America some lenders have been lending to people who really should not have been given mortgages (like people on minimum wage, people who live in trailer parks, people on welfare and to raccoons, dead dogs and people aged over 100).

In the UK our lenders are much stricter and more responsible in who they chose to lend money to. That is why we DO NOT have anything to worry about in Britain concerning house price falls or increased home reposessions because everybody can easilly pay their 8 times salary IO mortgages. I must reiterate that eight times IO mortgages are NOT sub prime because as I mentioned earlier sub prime is an American problem.

Moreover, in the UK we have what is known as a "breath test" where we use a mirror to check whether the person taking out the loan is alive. Therefore, I would like to inform the FSA that we would never give a mortgage to a dead raccoon (more likely to be a squirrel in the UK in any event as I have not seen many raccoons in my neck of the woods) or a dead dog. Now move along please good sheeple citizens of the UK and remember to buy a house tomorrow as you may get locked off the ladder FOREVER!!!

Morons Thank you.

* (according to UK Vested Interests involved in making huge sums of money in the residential property sector).

very funny reply sub mokey and this just about sums up in a amusing way what I have been trying to say. Everyone seems to living in denial and most peole in teh uk are sub -something or other

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Definition of "Sub Prime" *

(like people on minimum wage, people who live in trailer parks, people on welfare and to raccoons, dead dogs and people aged over 100).

everybody can easilly pay their 8 times salary IO mortgages. ...

sub prime ... American problem.

"breath test" ... mirror to check whether the person taking out the loan is alive.

... dead raccoon (more likely to be a squirrel in the UK in any event as I have not seen many raccoons in my neck of the woods) or a dead dog.

Voted by me: Funniest posting I've seen to date.

Disclaimer: I have not read every posting on these boards, so please do not write to me pointing out or trying to justify funnier postings. The judges decision is final. No liability is accepted.

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Voted by me: Funniest posting I've seen to date.

Disclaimer: I have not read every posting on these boards, so please do not write to me pointing out or trying to justify funnier postings. The judges decision is final. No liability is accepted.

Got to say, while I really liked SMIIs post, it was your 'disclaimer' that really got me laughing. Nice one :lol:

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Guest happy?
Definition of "Sub Prime" *

Sub Prime: "Sub Prime" is an American phenomonum created by the Americans in America....

We've always had sub-prime. Far end of the High Street known as Pawnbrokers - talented individuals who know their business.

Problem started when the near end of the High Street started grubbing around as well thinking they could do it better without getting dirty. What these people have been passing around as CDOs belong in a brown-wrapper - now known as Porn-brokers

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You're sub prime if you have a history of failed payments and ccjs.

I'd add self-cert/lie-to-buy mortgages. Also IO mortgages where borrowers have not considered how to pay back the capital.

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Guest muttley
I'd add self-cert/lie-to-buy mortgages. Also IO mortgages where borrowers have not considered how to pay back the capital.

You can include BTL where the LL's rent doesn't cover the mortgage too. As SlumpMonkey says, sub-prime is a US phenomena....we don't have it over here. We don't have elevators or sidewalks either.

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OK

What proportion of the UK housing market is thought to be Subprime?

What banks etc , hold the majority of these mortgages?

What banks etc, would be least effected by the Subprime market?

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OK

What proportion of the UK housing market is thought to be Subprime?

What banks etc , hold the majority of these mortgages?

What banks etc, would be least effected by the Subprime market?

1. I don't know the answer to that . My guess would be pure speculation. I would be interested to find out. my experience is otherwise purely anocdotal

2.and what is really annoying is I can't find anything showing who are the biggest lenders of mortgages to higher risk customers. Bristol and west, northern rock, HSBC, I know have marketed hard into the BTL and self cert.

Sorry I can't help

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OK

What proportion of the UK housing market is thought to be Subprime?

What banks etc , hold the majority of these mortgages?

What banks etc, would be least effected by the Subprime market?

Any answers?

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Guest Winnie
Definition of "Sub Prime" *

Sub Prime: "Sub Prime" is an American phenomonum created by the Americans in America. In America some lenders have been lending to people who really should not have been given mortgages (like people on minimum wage, people who live in trailer parks, people on welfare and to raccoons, dead dogs and people aged over 100).

In the UK our lenders are much stricter and more responsible in who they chose to lend money to. That is why we DO NOT have anything to worry about in Britain concerning house price falls or increased home reposessions because everybody can easilly pay their 8 times salary IO mortgages. I must reiterate that eight times IO mortgages are NOT sub prime because as I mentioned earlier sub prime is an American problem.

Moreover, in the UK we have what is known as a "breath test" where we use a mirror to check whether the person taking out the loan is alive. Therefore, I would like to inform the FSA that we would never give a mortgage to a dead raccoon (more likely to be a squirrel in the UK in any event as I have not seen many raccoons in my neck of the woods) or a dead dog. Now move along please good sheeple citizens of the UK and remember to buy a house tomorrow as you may get locked off the ladder FOREVER!!!

Morons Thank you.

* (according to UK Vested Interests involved in making huge sums of money in the residential property sector).

one of the best ever posts, thank you. :lol::lol::lol::lol::lol:

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OK

What proportion of the UK housing market is thought to be Subprime?

What banks etc , hold the majority of these mortgages?

What banks etc, would be least effected by the Subprime market?

I can tell you as I am a sub prime broker

About 10% of the market is considered sub prime, however if you look at self cert or fast track shed loads.

25% of all mortgage have no repayment vehicle.

The big players in this market are:

SPML (Southern Pacific Mortgage Lender)

GMAC RFC

Kensington

Platform

Preffered

Which Lenders will not be affected thats a tough one but the big high street players Halifax, Barclays, Abbey should do ok.

I have been using DB Mortgages alot as you can get 90%self cert with unlimted arrears, fantastic. But I heard they just pulled out of the market, I will speak with thier BDM Monday to find out.

At the momment there are about 30 sub prime lenders in the market mainly owned by the big investment banks.

Lenders like BM Solutions and TMB are middle ground they will take a bit of messy credit nothing serious, they mainly specialise in self cert

You would be surprised at the type of people that have bad credit and there are many reasons.

Hope this helps

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I can tell you as I am a sub prime broker

About 10% of the market is considered sub prime, however if you look at self cert or fast track shed loads.

25% of all mortgage have no repayment vehicle.

The big players in this market are:

SPML (Southern Pacific Mortgage Lender)

GMAC RFC

Kensington

Platform

Preffered

Which Lenders will not be affected thats a tough one but the big high street players Halifax, Barclays, Abbey should do ok.

I have been using DB Mortgages alot as you can get 90%self cert with unlimted arrears, fantastic. But I heard they just pulled out of the market, I will speak with thier BDM Monday to find out.

At the momment there are about 30 sub prime lenders in the market mainly owned by the big investment banks.

Lenders like BM Solutions and TMB are middle ground they will take a bit of messy credit nothing serious, they mainly specialise in self cert

You would be surprised at the type of people that have bad credit and there are many reasons.

Hope this helps

Thank you for your reply

So a quarter of all mortgages have no repayment vehicle.

Edited by Malarkey

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I can tell you as I am a sub prime broker

About 10% of the market is considered sub prime, however if you look at self cert or fast track shed loads.

25% of all mortgage have no repayment vehicle.

The big players in this market are:

SPML (Southern Pacific Mortgage Lender)

GMAC RFC

Kensington

Platform

Preffered

Which Lenders will not be affected thats a tough one but the big high street players Halifax, Barclays, Abbey should do ok.

I have been using DB Mortgages alot as you can get 90%self cert with unlimted arrears, fantastic. But I heard they just pulled out of the market, I will speak with thier BDM Monday to find out.

At the momment there are about 30 sub prime lenders in the market mainly owned by the big investment banks.

Lenders like BM Solutions and TMB are middle ground they will take a bit of messy credit nothing serious, they mainly specialise in self cert

You would be surprised at the type of people that have bad credit and there are many reasons.

Hope this helps

Thanks for the information. I am guessing seeing your figures that what I call dodgy mortgages in the Uk would probbaly increase the figure to 30% outside London and with Butolet 35% in london. What is the main rwson for self certs ( I know I had my reasons at the time) though and are they all paying slightly over the odds?

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Definition of "Sub Prime" *

Sub Prime: "Sub Prime" is an American phenomonum created by the Americans in America. In America some lenders have been lending to people who really should not have been given mortgages (like people on minimum wage, people who live in trailer parks, people on welfare and to raccoons, dead dogs and people aged over 100).

In the UK our lenders are much stricter and more responsible in who they chose to lend money to. That is why we DO NOT have anything to worry about in Britain concerning house price falls or increased home reposessions because everybody can easilly pay their 8 times salary IO mortgages. I must reiterate that eight times IO mortgages are NOT sub prime because as I mentioned earlier sub prime is an American problem.

Moreover, in the UK we have what is known as a "breath test" where we use a mirror to check whether the person taking out the loan is alive. Therefore, I would like to inform the FSA that we would never give a mortgage to a dead raccoon (more likely to be a squirrel in the UK in any event as I have not seen many raccoons in my neck of the woods) or a dead dog. Now move along please good sheeple citizens of the UK and remember to buy a house tomorrow as you may get locked off the ladder FOREVER!!!

Morons Thank you.

* (according to UK Vested Interests involved in making huge sums of money in the residential property sector).

A phrase which is being touted a LOT in the media all of a sudden is that unlike the US, the UK has no sub-prime problem because lenders here are more responsible than in the US.

When reading these claims, it is important to ask two questions:

1. What is the average salary here and in the US

2. What is the average house price here and in the US

Even compared to just the bubbly bits of the US market, house prices here are way higher and average wages are lower. Given that, it's hard to see how we're not setting ourselves up for some major sub-prime problems in the very not too distant future.

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OK Then what is the percentage of UK property held by a mortgage?

I believe there are 12million mortgages so 1.2 million are sub prime. But sub prime can range from a default on a credit card to unlimted missed payments

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I believe there are 12million mortgages so 1.2 million are sub prime. But sub prime can range from a default on a credit card to unlimted missed payments

I thought the likes of platform would still only consider people with near perfect credit history? not like those who continue to default etc?

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I thought the likes of platform would still only consider people with near perfect credit history? not like those who continue to default etc?

Platform will take:

Accept

Max £7,500.00 in CCJs unsatisfied. This condition does not incur any rate loading.

Ignore:

1) CCJs registered 24 months ago or over.

2) Ignore all Defaults.

3) CCJs which have been fully paid 6 months ago or over prior to application.

4) CCJ under or up to £100.

Arrears

Accept:

1) Max 1 missed payment in the last 3 months, which may be unpaid at the time of application. This condition does not incur any rate loading.

2) Max 4 missed payments in the last 12 months, which may be unpaid at the time of application. This condition does not incur any rate loading.

IVA/Bankrupt

Accept:

1) IVA must be discharged at least 1 year prior to application. This does not incur any rate loading.

2) Bankruptcy must be discharged at least 1 year prior to application. This does not incur any rate loading.

This is from my software Trigold

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