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Home owners to be moved off interest-only mortgages
http://www.x404.co.uk/forum/viewtopic.php?f=19&t=10400		 Page 1 of 1
Author:  Amnesia10 [ Sun Sep 05, 2010 9:59 pm ]
Post subject:  Home owners to be moved off interest-only mortgages
http://www.telegraph.co.uk/finance/pers ... gages.html

Quote:
Santander is one of several high street lenders which have introduced the new rules for borrowers with interest-only deals. Halifax is also understood to applied changes.
Borrowers without sufficient equity in their homes are being moved onto repayment deals once their initial deal has come to an end.
Banks said the move was part of “prudent” lending during the economic downturn and are unable to rule out imposing a further squeeze on borrowers in the months ahead.
It comes amid concerns that the housing market is heading for a double dip as economists predicted that home owners could lose the equivalent of more than the average salary off the value of their homes.
Nationwide reported house prices dropping 0.9 per cent in August, following a 0.5 per cent drop the previous month.
Santander told The Daily Telegraph that customers with less than 25 per cent equity in their home would be moved onto a capital repayment basis.

This should have been started two or three years ago. It is good that they are moving towards 25% deposits.
Author:  cloaked_wolf [ Mon Sep 06, 2010 2:50 am ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
But a bad thing for me as it means I won't be able to get on to the property ladder for another few years. Despite the fact that over the next 5 years, my salary should shoot up by a minimum of 4x what I earn now.
Author:  Amnesia10 [ Mon Sep 06, 2010 9:29 am ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
Yes but prices are still too high, and will come down, not by a lot. By around 20% at least, more if the government mess up.
Author:  Linux_User [ Mon Sep 06, 2010 2:30 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
I predict a noticeable rise in foreclosures...
Author:  mikepgood [ Mon Sep 06, 2010 2:52 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
Claims from people with now useless endowments anyone?
Author:  jonbwfc [ Mon Sep 06, 2010 3:13 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
mikepgood wrote:
Claims from people with now useless endowments anyone?

I got my first mortgage 15 years ago and it was obvious to me even then that interest only mortgages were no better a deal than putting the value of your house on a nag in the 2.30 at Kempton. People may well have been promised things that didn't turn out to be correct but that doesn't mean they had to believe them.

Jon
Author:  paulzolo [ Mon Sep 06, 2010 3:33 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
Linux_User wrote:
I predict a noticeable rise in foreclosures...


That’s the only way we’ll be able to improve our lot. We’re stuck because of rising prices too.
Author:  jonlumb [ Mon Sep 06, 2010 3:46 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
Whilst the 25% deposit is a grand idea for stability, it does equate to a significant amount of money and will completely bugger up people trying to get onto the property ladder. The Wench bought our house for about £180k some 4 years ago, and there's not a lot that's much cheaper in the area. For her that would have equated to a £45k deposit. When you consider that is nearly two years pre-tax earning in their entirety, and she's a fully qualified teacher (I not in a doss about profession) it does point out the staggering inconsistency in the system.
Author:  Amnesia10 [ Mon Sep 06, 2010 3:55 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
mikepgood wrote:
Claims from people with now useless endowments anyone?

Yes but endowments based on historical performance when they were being sold up to the late eighties made sense. Though the low returns from shares since then has meant that they were causing problems and there were reports of problems some years ago with endowments, with returns on endowments not being sufficient to cover the mortgage let alone provide a tax free lump sum as promised. So many had to increase endowment payments or switch to repayment mortgages. One thing that is clear is that fancy ways of buying a home are more likely to cost you dearly both financially. Maybe we need better regulations that ban fancy mortgages and only allow repayment mortgages. Some will complain that this will lead to mortgage rationing but maybe that is what will keep prices reasonable for first time buyers.

If you have the funds then property sellers will keep the prices high. Without first time buyers the property market is unsustainable and will have to fall.
Author:  cloaked_wolf [ Mon Sep 06, 2010 6:04 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
jonlumb wrote:
Whilst the 25% deposit is a grand idea for stability, it does equate to a significant amount of money and will completely bugger up people trying to get onto the property ladder.

+1.
Increased deposit means I now have to save even longer to get on the property market. The way things are going with the market, I'll be 40 before I manage to get my foot on the property ladder :lol:
Author:  Amnesia10 [ Mon Sep 06, 2010 8:21 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
cloaked_wolf wrote:
The way things are going with the market, I'll be 40 before I manage to get my foot on the property ladder :lol:

That is apparently the age of first time buyers who do not have family help.
Author:  tombolt [ Mon Sep 06, 2010 9:00 pm ]
Post subject:  Home owners to be moved off interest-only mortgages
I've pretty much given up on the idea myself. There are many benefits to renting.
Author:  Amnesia10 [ Mon Sep 06, 2010 10:20 pm ]
Post subject:  Re: Home owners to be moved off interest-only mortgages
tombolt wrote:
I've pretty much given up on the idea myself. There are many benefits to renting.

I only wished that there were much longer tenancies like on the continent.
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