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| Northern Rock Launches Riskier 90% Mortgage http://www.x404.co.uk/forum/viewtopic.php?f=19&t=12792 |
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| Author: | pcernie [ Mon Feb 28, 2011 3:13 pm ] |
| Post subject: | Northern Rock Launches Riskier 90% Mortgage |
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| Author: | l3v1ck [ Mon Feb 28, 2011 7:29 pm ] |
| Post subject: | Re: Northern Rock Launches Riskier 90% Mortgage |
I still think there should be a law banning 100% mortgages. Maybe a maximum of 95% would be about right? |
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| Author: | tombolt [ Mon Feb 28, 2011 7:33 pm ] |
| Post subject: | Northern Rock Launches Riskier 90% Mortgage |
That doesn't bother me so much as too high multiples of earnings. Negative equity isn't such a problem as people who can't afford their mortgages. |
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| Author: | l3v1ck [ Mon Feb 28, 2011 7:48 pm ] |
| Post subject: | Re: Northern Rock Launches Riskier 90% Mortgage |
That's also true. |
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| Author: | rustybucket [ Mon Feb 28, 2011 9:04 pm ] | |||||||||
| Post subject: | Re: Northern Rock Launches Riskier 90% Mortgage | |||||||||
I think 90% would be better. Think how quickly a house can drop 10% of its (supposed) value. |
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| Author: | l3v1ck [ Mon Feb 28, 2011 9:15 pm ] |
| Post subject: | Re: Northern Rock Launches Riskier 90% Mortgage |
True but during times of downturn, that could be self limited by the banks (as it has been the last year or two). When prices are rising, banks tend to be much less cautious. But as recent history has shown, they don't always see the bust coming. |
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| Author: | rustybucket [ Mon Feb 28, 2011 10:00 pm ] | |||||||||
| Post subject: | Re: Northern Rock Launches Riskier 90% Mortgage | |||||||||
That's the point though - there's always a bust. So why not lend assuming that it's coming? |
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| Author: | finlay666 [ Mon Feb 28, 2011 11:15 pm ] | |||||||||
| Post subject: | Re: Northern Rock Launches Riskier 90% Mortgage | |||||||||
The main issue is the organisations lending more than those lending can realistically repay, fiddling sums so you get a mortgage of x degrees more than your net (not gross, so most of that is taxed to start) salary is insane |
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| Author: | tombolt [ Tue Mar 01, 2011 12:20 am ] | ||||||||||||||||||
| Post subject: | Northern Rock Launches Riskier 90% Mortgage | ||||||||||||||||||
The short termism that is a result of being answerable to shareholders. Pragmatism and long term strategy goes out of the window when there're huge profits to be made. By the time it goes south, those few people responsible would hope to have made a huge profit and got out before it was too late. I'm generally not one for government regulation, but certain markets need it. You really can't let Market forces run riot when the organisations involved are too big to fail. |
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| Author: | dogbert10 [ Tue Mar 01, 2011 7:51 am ] | |||||||||
| Post subject: | Re: Northern Rock Launches Riskier 90% Mortgage | |||||||||
Quite agree - if people aren't earning enough, then they shouldn't be given a mortgage that's beyond their finances. Anything else is just asking for trouble. |
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| Author: | adidan [ Wed Mar 02, 2011 8:20 am ] | |||||||||
| Post subject: | Re: Northern Rock Launches Riskier 90% Mortgage | |||||||||
When I worked in the field (early 00's) it would be a maximum 90% LTV IIRC. Maybe 95%. 100% and even 110%/120% mortgages were available at one time which just seems a stupid idea from the outset. |
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