Tuesday, December 16, 2008

The Return Of Credit – Not Exactly Cheap Though.

Nationwide brings back 95% mortgage

A Times run article to show 95% mortgages are returning, sad to see they will ever return personally as its one of the reasons that has the UK in the mess thats makes it what it is today with people working 50 years to fund a shoe box. Interesting to note you can have it fixed at 7.2% APR though.

Posted by rimmer @ 11:20 PM (871 views)
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12 thoughts on “The Return Of Credit – Not Exactly Cheap Though.

  • The resposibility for all this mess is America and the U.K. governments. They went off to war and left us all with some sweeties to keep us quiet. The fat bankers saw it of course and jumped on the band wagon and nicked the cash. No better than the Russian Mafia realy. The thing is we are all gonna lose our money now and we still dont see that we cant win. I say the banking system will fold in the coming year.

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  • 95% mortgages have been around for decades and were not the cause of the problem. 100% & 125% mortgages perhaps, but 95% is quite a big deposit for a buyer to save up, especially when you add on the legal fees & survey costs etc. Good vetting by the banks ensuring that the buyers have a good credit history and sufficient income to support the loan are essential too of course.

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  • And not one of you has posted on here.

    LTV’s are very important to HPC.

    This from the article :-

    ”A new two-year tracker for customers with a 5 per cent equity stake costs 5.49 per cent, 3.49 percentage points above base rate. Nationwide’s best tracker deal for customers with a 40 per cent deposit is 4.49 per cent, 2.49 percentage points above base”.

    This makes houses as affordable as they were 3 years ago for people without much of a deposit.

    Add to this the tale/rumour of interest rates dropping another 2% and this will bring FTB’s to the market.

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  • Sorry I can’t remember, have the Nationwide got government money in their or are they still one of the independent ones ?

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  • Well is seems that everyone (except the readers of this site) is agreed. The solution to house price insanity fuelled by cheap credit is “more cheap credit to fuel further house price insanity”.

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  • Well thank you Hubbers

    Glad someone noticed this.

    To me this is a mega talking point because none of expected 95% lending so soon.

    Further, I’m not sure Nationwide have government backing, so they’re doing this off their own backs.

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  • From what I recall Nationwide is not in dire straights and did not get government help. It is a building society and so owned by it’s members… of which I am one!
    It seems that the 95%LTV is only for re-mortgaging… and presumably for people with good credit ratings.
    As it is not open to FTB’s then I am not outraged.

    In the article Andrew Montlake, a broker, said: “Re-entering the 95 per cent market is a bold move… However, it is first-time buyers who would benefit most and they have been excluded.”

    When house prices are falling at 2% a month how *EXACTLY* is a 95% LTV a benefit to a FTBer when it means they will be in **negative equity** within 3 months?

    From the article: “Mortgage experts hope the introduction of 95 per cent loan-to-value deals by Nationwide will encourage other lenders to follow suit”
    I sure these so called “experts” do hope that… but only to save their jobs… not to benefit FTBers!!

    Shame The Times journalist did not call these experts on this!

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  • Yeah, would’ve expected more comments. Nationwide apparently confident with their finances? Will people be confident enough with the economy to take this up?

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  • “But the new home loans, which are only available to existing customers who are moving house, come at a high price.” This is the critical point – it excludes FTBs. This is only going to offer a slight lifeline to people who NEED to MOVE but don’t have much equity left. I don’t even think its for remortgaging. The problem for movers is still that there aren’t enough FTBs to close out chains. This doesn’t change that and I think they know it! Its nothing more than a clever ploy to come across all caring to the sheeple.

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  • well observed has browne.

    I found that info elsewhere, it almost appears that this article was dressed up a little (advertising revenue anyone).

    IMO it’s articles such as this that need to watched for and analyzed, because this is where the bottom of HPPC will be found – when the money starts to flow and hugh LTV’s come back.

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  • little professor says:

    At 7.18% APR, when the base rate is 2%, they have priced themselves out of the market – this is just a symbolic gesture

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  • LP
    I could get 3.64% the other day with 40% deposit at HSBC, 1.64% above base

    I don’t consider 5.49% or 3.49% above base as priced out of the market.

    I would expect someone without much equity to pay more than someone with, that’s just sensible business.

    My oint was that 5.49% is no higher than a couple of years ago ( in fact a little less maybe).

    Hash browne did raise the point that it was for existing customers only – which is very relevant.

    If you were to see deals like this for FTB’s IMO that would slow the falls as they would be able to get offers in on rates that were affordable to them.

    At the moment however I sincerely hope we don’t see this as I think FTB’s deserve sensibly priced property.

    Keep yours eyes open for these deals though.

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