60% Reduction In The Number Of Mortgage Deals!

[Its time to buy]

http://www.metro.co.uk/money/article.html?...p;in_page_id=36

Mortgage choice falls 60 per cent

Tuesday, March 25, 2008

Only 5,725 different deals are now available to borrowers The number of mortgage deals available has plummeted by nearly two-thirds since credit fears hit the market, according to new figures.

Just 5,725 different deals are now available to borrowers, down from 15,599 in July 2007, said financial information group Moneyfacts.

Those needing 'sub-prime' mortg­ages – people with poor credit hist­­ories, for example – have been hardest hit, with their choice nose-diving by 81 per cent. The news came as exp­erts warned it could be a year bef­ore the mortgage market stab­ilises and a further three years bef­ore it springs back.

'Even then we won't get back to the full availability of such cheap deals we saw before,' said Louise Cuming at Moneysup­ermarket.

Dunfermline Building Society yesterday became the latest player to pull out of the 100 per cent mortgage market. Only Abbey now off­ers the deal without conditions, such as a parent as guarantor, but its rates are so high the product is, in eff­ect, priced out of the market.

Standard Life is also set to pull its two-year tracker and fixed rate mortgages tomorrow and demand a 15 per cent dep­osit on its three-, five- and ten-year fixed-rate deals.

Buy-to-let loans have also suffered, with a 60 per cent slump in choice. Even mainstream mortgage offers have been hit. There are now 2,565 such deals, a third less than the 3,803 available in July.

Hoorah!!! EASY CREDIT TAP IS OFF!!!

Edited March 26, 2008 by notanewmember

[beans on toast]

No easy cresdit left. Mexican standoff between buyers and sellers. Next 3 months will be crucial.

[bobthe~]

It's not just the number of mortgages, as we all know, it's the LTV changes, and the poor sub primers having to go onto the SVR of the likes of Kensington and GMAC at what must be around 11% by now.

That and the actual amounts available in these deals is lower, plus that most of the business is now re-mortgaging all adds up to complete carnage.

Hey, I know we have all posted these before, but when you put it all together, it really is like watching an enormous hurricane heading landwards, isn't it?

[crash2006]

wait till summer they'll be no 90% mortgages any more, as it'll be max 75%. banks truly in the poop.

Edited March 26, 2008 by crash2006

[crash2006]

No easy cresdit left. Mexican standoff between buyers and sellers. Next 3 months will be crucial.

they'll be forced to sell when mortgages reset.

[Its time to buy]

Link is here http://www.metro.co.uk/money/article.html?...p;in_page_id=36

[Sofa Spud]

My tent coat me about £25 twelve years ago. I wonder if it'll soon be worth a lot more - just one rip when my cat jumped on it - otherwise OK.

[eric pebble]

No easy cresdit left. Mexican standoff between buyers and sellers. Next 3 months will be crucial.

Yup -- Who will blink first....

[Beggar Thy Children]

Well the buyers' eyelids are effectively propped open with matchsticks because they can't get a mortgage.

[dreamOn120k]

Let's start calling them mortgage products, a deal is a signed mortgage contract surely?

[narco]

The HPC is going to be harsher than anything witnessed in living memory. 1989 -1991 wlll look like the good old days.

50% drops across the board incoming. No question about it now.

[Guest Shedfish]

[Crashman Begins]

This will not help house prices to continue rising

Great crash 2 so far.

Mortgages & credit tightening

Trillion dollar pass the parcel

Houses on the market for over a year

Higher mortage bills

Higher petrol

Higher food prices

Higher home bills

Incereased car tax

Higher public transport costs

Job losses

[thedebtisreal]

No easy cresdit left. Mexican standoff between buyers and sellers. Next 3 months will be crucial.

You make it sound like some psychological battle of wills.

It's not.

There is very little capital left to lend. That is the be all and end all. Sentiment is now irrelevant. Sellers are now irrelevant. They are just experiencing the early denial stages of an asset crash. We'll see the shift to fear soon enough. I've put that time as september when London goes strongly YOY negative.

[Bloo Loo]

You make it sound like some psychological battle of wills.

It's not.

There is very little capital left to lend. That is the be all and end all. Sentiment is now irrelevant. Sellers are now irrelevant. They are just experiencing the early denial stages of an asset crash. We'll see the shift to fear soon enough. I've put that time as september when London goes strongly YOY negative.

better get a stock of P45s in

[Leonard Hatred]

I think we're now at the "flats will fall, but houses will be OK" stage.

[too soon to buy?]

does anybody know what proportion of existing mortgage deals out there are over 90% LTV (when signed, not now!!) and as such, how many lemmings will be heading over the SVR cliff come Summer 08 / 09?

IF there are LOADS of people remortgaging because the SVR will kill them, but there are no longer any more 90% LTV mortgage products (and hey, the V part of that equation probably prevents that come summer 08 anyway) AND People can't sell their homes because there is no point (won't cover mortgage) Then WILL the banks be interested in having LOADS of repos on their hands, or will they extend terms to existing borrowers?

[cells]

does anybody know what proportion of existing mortgage deals out there are over 90% LTV (when signed, not now!!) and as such, how many lemmings will be heading over the SVR cliff come Summer 08 / 09?

IF there are LOADS of people remortgaging because the SVR will kill them, but there are no longer any more 90% LTV mortgage products (and hey, the V part of that equation probably prevents that come summer 08 anyway) AND People can't sell their homes because there is no point (won't cover mortgage) Then WILL the banks be interested in having LOADS of repos on their hands, or will they extend terms to existing borrowers?

do you think the banks care about repos in this stage?

as long as a repo gets them the loan back they will do it (ie if the mortgage is 250k and the house 200k, but they can get 50k off the customer by taking other things they will)

If house prices drop 10% and LTV drop to a max of 90% that means right NOW you need 20% equity to avoid SVR

what if SVR drops to 80%? and house prices drop 10%? then right now you need to have 30% equity to avoid SVR.

there will be a lot of people moving onto SVR

[too soon to buy?]

do you think the banks care about repos in this stage?

as long as a repo gets them the loan back they will do it (ie if the mortgage is 250k and the house 200k, but they can get 50k off the customer by taking other things they will)

If house prices drop 10% and LTV drop to a max of 90% that means right NOW you need 20% equity to avoid SVR

what if SVR drops to 80%? and house prices drop 10%? then right now you need to have 30% equity to avoid SVR.

there will be a lot of people moving onto SVR

dead right. That's what I am saying, there will be tonnes of people unable to go onto SVR. 99% of all FTBers I'd say, plus the masses of MEW borrowers who now drive 4x4s. Proportionately, they could be in the majority.

My point is this though;

Will the bank WANT to repo the houses? If over 50% of their customers are unable to SVR for LTV reasons, then it is likely a good proportion of those will default given the way people stretch themselves. THerefore, will the banks want to make the problem worse by flooding an already destroyed market with yet more houses to sell?

Will the banks WANT an asset that is woth, say, £100k to remedy a £250k loan? Wouldn't they rather somehow keep the mortgagee solvent so at least theyu get some income against the £250k and avoid writing down a £150k loss (multiplied by lots of defaulted customers)?