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A Third Of Homeowners Will Be Unable To Prove Income When Applying For A Re-mortgage

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A third of homeowners will be unable to prove income when applying for a re-mortgage

Nearly a third of homeowners admit that they are unsure if they will be able to produce proof of income to a new lender. This worrying development, which Moneynet.co.uk has discovered, highlights the difficulty a large proportion of remortgagors face when trying to secure adequate finance when their current deal comes to an end...

55 per cent of the borrowers questioned are on a fixed or discounted deal coming to an end this year, or in early 2009, therefore any falling into both categories are running a significant risk. The research revealed that over a third are servicing a mortgage debt equating to a sum three times greater than their current gross annual income.

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

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A third of homeowners will be unable to prove income when applying for a re-mortgage

Nearly a third of homeowners admit that they are unsure if they will be able to produce proof of income to a new lender. This worrying development, which Moneynet.co.uk has discovered, highlights the difficulty a large proportion of remortgagors face when trying to secure adequate finance when their current deal comes to an end...

55 per cent of the borrowers questioned are on a fixed or discounted deal coming to an end this year, or in early 2009, therefore any falling into both categories are running a significant risk. The research revealed that over a third are servicing a mortgage debt equating to a sum three times greater than their current gross annual income.

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

Yikes. And gulp. There but for the grace of HPC go I?

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I am off for a lie down, cannot handle any more bear food, all we wanted was the cost of house's to fall in line with affordability, not a great big complete melt down of house prices, which as each day passess seems to become more of a possibility?

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I am off for a lie down, cannot handle any more bear food, all we wanted was the cost of house's to fall in line with affordability, not a great big complete melt down of house prices, which as each day passess seems to become more of a possibility?

Well yes but thats a small price to pay, not everyone will be hurt.

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Hadn't really considered that scenario too much....

Also seems to me to put a stop to any idea that we will see 2 years of drops and then back on with the party. People will come off their fixed rates this year and then start to struggle, 9 months worth of non or reduced mortgage payments and the banks will come knocking (I think at that stage of the down turn it's going to be much less than 9 months before the lenders coming looking to recover something).

I think there are a good number of people in trouble now who will be going bust in the next 2-3 years to keep the momentum up.

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the big issue in relation to this is that re-mortgage biz increased by 43% yoy in the latest figures as mortgage approvals plunged to circa 50,000. Re mortgaging is about to become impossible (at a decent rate) unless you have minimum 30% equity in your home. Lenders are about to revert en masse into becoming cost centres; squeezing every dime out of existing customers and for the most part shunning new business. There are literary millions of recent mortgagees (past 3 years) who will be locked into their original agreement as no one else wants them, or wants to buy in 'churn'.

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The research revealed that over a third are servicing a mortgage debt equating to a sum three times greater than their current gross annual income.

Excuse my dumbness but isn't 3 x gross income a sensible multiple for a mortgage? :blink:

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In all seriousness, the evidence points to this crash being far worse than in the early 90s.

well, the bigger the bubble....

I expect lenders to come up with new schemes to allow remortgaging with a huge penalty, such as extending the mortgage for another 20 years, minus the equity, just for the borrower to hold onto the asset. Some kind of plan to keep the distressed borrowers on the razor's edge, somewhere between bankruptcy and forced rent.

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A third of homeowners will be unable to prove income when applying for a re-mortgage

Nearly a third of homeowners admit that they are unsure if they will be able to produce proof of income to a new lender. This worrying development, which Moneynet.co.uk has discovered, highlights the difficulty a large proportion of remortgagors face when trying to secure adequate finance when their current deal comes to an end...

55 per cent of the borrowers questioned are on a fixed or discounted deal coming to an end this year, or in early 2009, therefore any falling into both categories are running a significant risk. The research revealed that over a third are servicing a mortgage debt equating to a sum three times greater than their current gross annual income.

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

So how were they approved for mortgages in the first place!?

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well, the bigger the bubble....

I expect lenders to come up with new schemes to allow remortgaging with a huge penalty, such as extending the mortgage for another 20 years, minus the equity, just for the borrower to hold onto the asset. Some kind of plan to keep the distressed borrowers on the razor's edge, somewhere between bankruptcy and forced rent.

hey stuckmojo are you off to watch exodus on tour next month.

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Excuse my dumbness but isn't 3 x gross income a sensible multiple for a mortgage? :blink:

I think the comment was inferring that the borrowers had self-declared incomes 3x higher than the actually were.

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A third of homeowners will be unable to prove income when applying for a re-mortgage

How the hell did they prove their income in the first place? ohh hang those were the days they didn't have to prove anything! what a corrupt system & what a bunch of muppets who still think house prices are sustainable..

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Stalin will enact anti-repo legislation preventing lenders from repo'ing. Lenders will instead be forced to extend mtg. terms, or swap debt for deferred equity in houses on borrower application, which will be unwound in 5/10 years time. They'll do anything they can to put a floor under house prices maybe around 20/30% off tops.

I am not expecting existing borrowers to be permitted to default en masse. We are already seeing "key worker" subsidies along these lines. They'll simply extend this to more public sector workers first and then wider still if needs be. All imho of course.

Stalin will call it the "New Homes Deal" or some such socialist bollux. Cameron will agree with it 'coz it means votes. Done deal.

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Stalin will enact anti-repo legislation preventing lenders from repo'ing. Lenders will instead be forced to extend mtg. terms, or swap debt for deferred equity in houses on borrower application, which will be unwound in 5/10 years time. They'll do anything they can to put a floor under house prices maybe around 20/30% off tops.

But that wouldn't put a floor under house prices. On the contrary it would make mortgages even more expensive because of the risk that lenders would be left carrying the can.

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How the hell did they prove their income in the first place? ohh hang those were the days they didn't have to prove anything! what a corrupt system & what a bunch of muppets who still think house prices are sustainable..

Forty times income anyone? OK here's how it works/worked; take your 200K equity (profit from your previous home) and obtain a 400K mortgage on the new home when you only have a verified income of 10K a year. All lenders would have bitten your hand off for 30%+ deposit on large loans 18 months ago, without asking many questions, if they did you simply found one that didn't. There were loads of 'em. Now trapped in the 600K house, that's probably going to be worth 400K inside 24 months, you still have the 400K mortgage, cant re-mortgage and property development isnt working, 'cos you got into it ten years too late. Very common scenario....

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Stalin will enact anti-repo legislation preventing lenders from repo'ing. Lenders will instead be forced to extend mtg. terms, or swap debt for deferred equity in houses on borrower application, which will be unwound in 5/10 years time. They'll do anything they can to put a floor under house prices maybe around 20/30% off tops.

I am not expecting existing borrowers to be permitted to default en masse. We are already seeing "key worker" subsidies along these lines. They'll simply extend this to more public sector workers first and then wider still if needs be. All imho of course.

Stalin will call it the "New Homes Deal" or some such socialist bollux. Cameron will agree with it 'coz it means votes. Done deal.

All quite possible.

Then the law if 'consequences unseen by fools' cuts in.

What lender will continue to lend if their right of claim to their security is taken away?

Edited by Knut

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Forty times income anyone? OK here's how it works/worked; take your 200K equity (profit from your previous home) and obtain a 400K mortgage on the new home when you only have a verified income of 10K a year. All lenders would have bitten your hand off for 30%+ deposit on large loans 18 months ago, without asking many questions, if they did you simply found one that didn't. There were loads of 'em. Now trapped in the 600K house, that's probably going to be worth 400K inside 24 months, you still have the 400K mortgage, cant re-mortgage and property development isnt working, 'cos you got into it ten years too late. Very common scenario....

spot on

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  • 297 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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