Reply to: Tackling them debts

[AtW]

Can you imagine a Saudi turning up in Luton (er London) in the flash car, going for walk in the good thawb? They'd blend right in!!

At least those cars won't be towed away for lack of insurance ...

[scooterscot]

Nah rename Luton to London, and London to Londinium then flog London to Saudi and laugh

Can you imagine a Saudi turning up in Luton (er London) in the flash car, going for walk in the good thawb?

They'd blend right in!!

[amcdonald]

We pay them off over the next 50 years (optimistic)

Cap in-hand to the IMF and declare ourselves bankrupt (which we are)

Or third option, sell London to Saudi.

Nah rename Luton to London, and London to Londinium then flog London to Saudi and laugh

[Mich the Tester]

Or third option, sell London to Saudi.

That would never work; it'd end up under Sharia law and then the Saudi princes would stop coming to get plastered in the nightclubs.

[AtW]

Or third option, sell London to Saudi.

They prefer to rent...

[AtW]

So AtW, you have no reason for posting this other than to try and make a non-existent point about the economy from short-term ups and downs.

My apologies for quality of my posts being radically different from that degenerate sockie of yours that posts inane tulip about trains

[scooterscot]

One of two things will happen

We pay them off over the next 50 years (optimistic)

Cap in-hand to the IMF and declare ourselves bankrupt (which we are)

Or third option, sell London to Saudi.

[Doggy Styles]

So AtW, you have no reason for posting this other than to try and make a non-existent point about the economy from short-term ups and downs.

[sasguru]

atw you make me laugh. Still renting after all this time, and now prices are going to accelerate again.
If you had bought a house in the early noughties, it would have made more money for you than SKA has to date.

[AtW]

It's all about creating financial timebombs for the next party to inherit, as the electorate only thinks shortterm is it any wonder those in government act likewise

Indeed.

Electorate is just cannon fodder caught in cross fire and this time they are going to nuke from orbit to be sure...

[amcdonald]

So what did Govt do?

1) helped reduce deposits to 5% by putting tax payer on the hook for any losses
2) keeps rates very low to maintain bubble - so now those who buy now won't have a chance to service debts when rates go back up to 5% where they belong.

It's all about creating financial timebombs for the next party to inherit, as the electorate only thinks shortterm is it any wonder those in government act likewise

[AtW]

Banks have tightened up their interest only lending criteria (too far in my opinion) because of a few instances where people took out interest only mortgages many years ago and chose to bury their heads in the sand favouring lower repayments each month to support better lifestyles

Banks still lend way too high multiples. If they had not done so then property bubble would not have happened in this country because nobody would be able to buy at inflated prices (other than rich foreigners).

Interest only mortgages defy common sense and should not exist in principle and in any case deposits must be sufficiently high to ensure people act responsibly.

So what did Govt do?

1) helped reduce deposits to 5% by putting tax payer on the hook for any losses
2) keeps rates very low to maintain bubble - so now those who buy now won't have a chance to service debts when rates go back up to 5% where they belong.

[AtW]

I'd expect some sort of inflationary monetary policies of the sort that will justify my next renewal coming with a 20% hike.

We live in strange times, where inflation applies to - fuel, food, rent, transport etc.

On the other hand deflation applies to - wages, plasma TVs.

[AtW]

so we'll see what happens next

We won't just see it, we'll feel it!!!

[Power Mortgages Ltd]

In other news.

Return of the interest-only mortgage - Telegraph

Rent your house from the bank.


It's all back to how it was. This govt are paying lip service to debt and are encouraging the banks rackup dubious debt ready for more money printing and bailouts.

There is no political will among LibLabCon to operate any other way, and to expect otherwise is frankly ludicrous.

I love how the DT call it 'controversial interest only mortgages' as if interest only is now the devils doing.

Banks have tightened up their interest only lending criteria (too far in my opinion) because of a few instances where people took out interest only mortgages many years ago and chose to bury their heads in the sand favouring lower repayments each month to support better lifestyles and hoping that their future would change sufficiently so that they could repay the mortgage at a later day after they got that million pound a year salary they were destined to get or that inherritance from old aunt Ethel which never came in the end. Come the end of the 25 years when the banks came calling for their money back they then pleaded ignorance that they were unaware their mortgage was so cheap because they werent actually repaying the debt and called hardship at being forced to sell their family home and move out with very little equity (because of course they had remortgaged any equity gain the property had benefit from along the years to consolidate other debts, make home improvements or go on holidays etc).

The FSA or now FCA as they are known wanted to ensure that this couldnt happen and published guidelines for interest only lending to which lenders have interpretted in different ways. Those lenders (like Halifax for example) who enforced very strict criteria essentially making it impossible to get interest only unless you have a nailed on, water tight repayment vehicle which you can prove now pretty much stopped doing interest only over night and applications for interest only were then placed with those lenders who had a more liberal interpretation of the guidelines but after being bombarded with one main type of business (interest only) they had to tighten up their criteria realising their exposure to complaints regarding interest only was growing and each lender followed suit until we are left in a position now whereby interest only is simply not available above 75% at all and above 50% loan to value with most lenders you need to prove the water tight repayment vehicle. It is only where loan to value is below 50% that lenders will accept things like 'sale of mortgaged property' as the repayment vehicle and even then you normally need to have over £150k equity in the property.

The interest only mortgage with Clydesdale mentioned in the articel is a revolutionary one of a kind mortgage which is new to the market and had to go through rigorous tests and complaince through the FSA/FCA to be approved which they did.

The fact the mortgage reverts to repayment at the end of the initial 3 year interest only period means that the mortgage will not be a lifetime interest only mortgage which has been the problem in the past and I genuinely feel it serves a very good purpose for someone who may wish to keep the initial costs down whilst they get used to the costs of running a home (like first time buyers for example) or someone who know's their career path will see their income increase significantly in the coming years like trainee Doctors for example.

A lot of contractors have often favoured the interest only mortgage quite often alongside an offset mortgage as it provides that additional flexibility of making over payments as and when they wish to whilst keeping the monthly payment down in case of periods without contract as well as utilising the war chest by offsetting that against the mortgage. Sadly lenders interest only criteria has made it very difficult to now do this.