Jump to content
House Price Crash Forum
Sign in to follow this  
0q0

Building Society Letter - 85% Mortgage Btl

Recommended Posts

Well known building society - letter received saying "As you know the demand for housing is on the up and up...borrow up to £2m, 85% of property value, repayment or IO mortagge, 110% rental income ratio."

Are they stark raving mad???

Share this post


Link to post
Share on other sites

I presume that 110% rental income ratio means rent must cover 110% of the mortgage interest.

On an 85% loan with an IR of 6.5%, this means the gross rental yield would have to be more than 6% of the property's value.

(110% x 85% x 6.5% = 6.01%)

I don't think this is easily achievable, at least outside London.

(My current and previous landlord are both yielding less than 4.5% gross even assuming no voids - and both have had voids)

Share this post


Link to post
Share on other sites
I presume that 110% rental income ratio means rent must cover 110% of the mortgage interest.

On an 85% loan with an IR of 6.5%, this means the gross rental yield would have to be more than 6% of the property's value.

(110% x 85% x 6.5% = 6.01%)

I don't think this is easily achievable, at least outside London.

(My current and previous landlord are both yielding less than 4.5% gross even assuming no voids - and both have had voids)

Hi SU,

I'm in Gtr London, was really annoyed when I saw that letter. Am seriously thinking of taking my savings out of there. Catchline is "When you take out a Buy To Ler mortgage your finances could really take off." Yeah, like a hot air balloon in a hurricane.

And they say they may also phone to see if a BTL mortgage is wanted!

Push push push from these bankers, makes me very cross.

Share this post


Link to post
Share on other sites
Hi SU,

I'm in Gtr London, was really annoyed when I saw that letter. Am seriously thinking of taking my savings out of there. Catchline is "When you take out a Buy To Ler mortgage your finances could really take off." Yeah, like a hot air balloon in a hurricane.

And they say they may also phone to see if a BTL mortgage is wanted!

Push push push from these bankers, makes me very cross.

You have to see it from their perspective. Unless they keep lending they starve. It matters not if the borrower can repay as the commission gets paid no matter what. It is what drives HPI-driven miracles over the edge.

Edited by Realistbear

Share this post


Link to post
Share on other sites
Hi SU,

I'm in Gtr London, was really annoyed when I saw that letter. Am seriously thinking of taking my savings out of there. Catchline is "When you take out a Buy To Ler mortgage your finances could really take off." Yeah, like a hot air balloon in a hurricane.

And they say they may also phone to see if a BTL mortgage is wanted!

Push push push from these bankers, makes me very cross.

Clear evidence of a huge and catastrophic credit crunch.

Isn't it? :huh:

How come the bears have studiously ignored this "coal-face" post about the credit crunch?

No......

surely not......

They are fulll of crap and only listen to information that supports their twisted view of the world?

That really is shocking!

Shocking, I tells ya!

Share this post


Link to post
Share on other sites
Well, to be fair, I think there is probably a little bit.

Not much mind.

There's a great deal of SB in the UK, as the evidence and regular press reports over the last few weeks goes to show. We havent yet entered fully into the reset season which begins in earnest in q1 08.

Share this post


Link to post
Share on other sites
It doesn't surprise me at all that these loans are being offered (they're not in business unless they're lending) but I suspect that only people with a decent deposit and good record need apply.

It would be interesting to see if someone who may have previously just scraped a mortgage before the Credit Crunch hit, would now be offered the same deal (if at all) ?

Or are you suggesting that the Credit Crunch didn't happen, or that it simply doesn't matter?

Buckers

I am saying that there is no credit crunch. It is not affecting lending on the highstreet.

My theory is that the banks are colluding to force central bank rates down and transfer risk away from themselves, just because they can and it is profitable for them. NR is being used as a threat to the central banks, but the board will be receving huge wedges from the big boys of the banking world to sacrifice NR shareholders for the greater good of the banking world. In global terms NR is an irrelevance, like some far west USA mortgage bank you haven't even heard of (Idaho Temperance Lodge Homestead Funding Corp. or some such).

Share this post


Link to post
Share on other sites
There's a great deal of SB in the UK, as the evidence and regular press reports over the last few weeks goes to show. We havent yet entered fully into the reset season which begins in earnest in q1 08.

Nationwide have admitted they have 250,000 resets due before Christmas IIRC.

Share this post


Link to post
Share on other sites
Guest DissipatedYouthIsValuable
Clear evidence of a huge and catastrophic credit crunch.

Isn't it? :huh:

How come the bears have studiously ignored this "coal-face" post about the credit crunch?

No......

surely not......

They are fulll of crap and only listen to information that supports their twisted view of the world?

That really is shocking!

Shocking, I tells ya!

STF, if you really just want a good punch in the face, I'm happy to travel. You big fanny.

Share this post


Link to post
Share on other sites
STF, if you really just want a good punch in the face, I'm happy to travel. You big fanny.

As if the medical profession doesn't get enough bad press, here we have a GP threatening assault and making misogynistic remarks deriding female genitalia.

It's like Shpiman mark II !!! :o

Share this post


Link to post
Share on other sites
Nationwide have admitted they have 250,000 resets due before Christmas IIRC.

Of course Uncle Gordon will be taking the sting out of that with a pre-Christmas quarter or half point IR cut on the back of the ONS's excellent work on reducing CPI.

Share this post


Link to post
Share on other sites
Guest DissipatedYouthIsValuable
As if the medical profession doesn't get enough bad press, here we have a GP threatening assault and making misogynistic remarks deriding female genitalia.

It's like Shpiman mark II !!! :o

I admit that associating you with genitalia of any kind is certainly a derision of genitalia.

Share this post


Link to post
Share on other sites
It doesn't surprise me at all that these loans are being offered (they're not in business unless they're lending) but I suspect that only people with a decent deposit and good record need apply.

It would be interesting to see if someone who may have previously just scraped a mortgage before the Credit Crunch hit, would now be offered the same deal (if at all) ?

Or are you suggesting that the Credit Crunch didn't happen, or that it simply doesn't matter?

Buckers

I think that the biggest thing that people dont take into account, is that good credit, prime loans etc, is based on pre hpi standards.

it used to be no more than 3.5 gross pay, and a good credit score was considered excellent. AND there was the assumption that there would be mild, inflation matching hpu to go along with it.

now, however, the loans are averaging twice as much of gross pay, and there is a very real possibility that hpi will slow or plateau.

But the loans are still being judged by the pre-hpi standards, so in effect, almost ALL the loans are subprime, when you take in the current marketplace.

Share this post


Link to post
Share on other sites

This is a Zero tolerance thread

Offenders will be given a mortgage with Northern Rock

Share this post


Link to post
Share on other sites
Clear evidence of a huge and catastrophic credit crunch.

Isn't it? :huh:

How come the bears have studiously ignored this "coal-face" post about the credit crunch?

85% of property value ... 110% rental income ratio

Are you blind or just ignorant?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 355 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.