0q0 Posted October 16, 2007 Share Posted October 16, 2007 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??? Quote Link to comment Share on other sites More sharing options...
Selling up Posted October 16, 2007 Share Posted October 16, 2007 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) Quote Link to comment Share on other sites More sharing options...
0q0 Posted October 16, 2007 Author Share Posted October 16, 2007 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. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted October 16, 2007 Share Posted October 16, 2007 (edited) 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 October 16, 2007 by Realistbear Quote Link to comment Share on other sites More sharing options...
Smell the Fear Posted October 16, 2007 Share Posted October 16, 2007 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? 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! Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted October 16, 2007 Share Posted October 16, 2007 There is no sub prime in the UK Quote Link to comment Share on other sites More sharing options...
Smell the Fear Posted October 16, 2007 Share Posted October 16, 2007 There is no sub prime in the UK Well, to be fair, I think there is probably a little bit. Not much mind. Quote Link to comment Share on other sites More sharing options...
BTLlivingthedream Posted October 16, 2007 Share Posted October 16, 2007 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. Quote Link to comment Share on other sites More sharing options...
Smell the Fear Posted October 16, 2007 Share Posted October 16, 2007 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). Quote Link to comment Share on other sites More sharing options...
Realistbear Posted October 16, 2007 Share Posted October 16, 2007 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. Quote Link to comment Share on other sites More sharing options...
Guest DissipatedYouthIsValuable Posted October 16, 2007 Share Posted October 16, 2007 Clear evidence of a huge and catastrophic credit crunch.Isn't it? 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. Quote Link to comment Share on other sites More sharing options...
Smell the Fear Posted October 16, 2007 Share Posted October 16, 2007 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 !!! Quote Link to comment Share on other sites More sharing options...
Smell the Fear Posted October 16, 2007 Share Posted October 16, 2007 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. Quote Link to comment Share on other sites More sharing options...
Guest DissipatedYouthIsValuable Posted October 16, 2007 Share Posted October 16, 2007 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 !!! I admit that associating you with genitalia of any kind is certainly a derision of genitalia. Quote Link to comment Share on other sites More sharing options...
Lone_Twin Posted October 16, 2007 Share Posted October 16, 2007 STF, if you really just want a good punch in the face, I'm happy to travel. You big fanny. Your posts are unusually feisty today, even for you. . ST Quote Link to comment Share on other sites More sharing options...
Mr Nice Posted October 16, 2007 Share Posted October 16, 2007 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. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted October 16, 2007 Share Posted October 16, 2007 This is a Zero tolerance thread Offenders will be given a mortgage with Northern Rock Quote Link to comment Share on other sites More sharing options...
Damik Posted October 16, 2007 Share Posted October 16, 2007 Clear evidence of a huge and catastrophic credit crunch.Isn't it? 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? Quote Link to comment Share on other sites More sharing options...
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