Most mortgages brokers can get a fee from the lender (apart from a few of the "direst " ones) so they shouldn't need to charge you anything. I have never charged a client a fee, even if the loan is only £150k, as the lender usually pays around 0.35 - 0.4% thus paying the broker £500 - £600.
I was speaking to an investment manager yesterday and their stance is that rates will start to go up this time next year but only very slowly and will rise no more than 2% over the next 3-5 years. As mentioned on here the differential between banks standard variable rates & the BOE base rate used to be around 2%, whereas now it is at least 3.5% and can be as much as 5%. This will be squeezed back down again once rates rise.
Certainly fixing your mortgage rate for 3-5 years at anything below 4% would seem sensible, although 2 year fixes just mean you will be looking to remortgage just as rates are increasing. tough one.
quite a few of my clients owe me big time when I managed to get them lifetime trackers at 0.39% above base back in 2007 - one even got. 0.1 below base !!!!
Did you know base rate was going to fall to 0.5% then?
If those clients do owe you for arranging them a tracker does that mean that those that you arranged a long term fixed rate owe you a kicking?
I also maintain (and this is not personal) that if a broker is not charging a fee then be wary as I was under the impression that they have to offer to be fee based if they call themselves 'Independent'. If you don't do that does that mean that you are not independent? I only ask because those lender fees sound quite high for residential loans. As you don't charge a fee do you only use the banks that pay you more?
I still maintain that the best brokers charge a fee, and they tend not to ram loads of expensive insurances down your throat. It's a false economy to employ someone that says they will work for nothing as no one ever does. At least if they are upfront about what they charge you know what you will be paying and what you are getting for it.
Agree with KHA. I remember a broker approaching me and spending a week negotiating his fee on a piece of business as he would not entertain working with my company unless we paid him in line with others even though our terms were clearly better for his customer, just disgraceful behaviour.
My own personal view for what it's worth is that rates will only rise slowly and stop at a historically low level, and indeed may not rise at all.
The UK housing boom is limited to London and the SE and any frothiness seems to be most prevalent amongst cash buyers (which would concern the BoE less). Inflation is virtually non-existent and where it is present (eg. energy), it is more than offset by clear deflation (eg. clothing, gadgets etc.).
There are considerable and understated disinflationary factors present in the global economy (technology, the debt overhang from the crisis, high youth unemployment, immigration, cheap emerging market labour etc.) which may mean the old 'boom and bust' cycle is over, replaced by mediocre growth which to those without much wage bargaining power (the vast majority sadly) will feel like recession.
Either way it is important to remember that it is 'real' interest rates (after inflation) which matter, not nominal rates. Homebuyers in the 1970s faced punishingly high nominal rates initially but inflation soon ate away at the real value of the debt. Japan has had zero nominal interest rates for decades but relatively high real interest rates due to deflation - unsurprisingly Japanese property has been a terrible asset class.
With regard to a tracker vs fixed rate, the above view would seem to favour a tracker but the best rates available today are way higher than pre-crisis (as others have noted), and can moreover only go in one direction. Fixed rates are based upon expectations of future rates (aka the 'swap curve') and may not increase if base rates rise since much is already priced in (they might even move lower). Thus if I was remortgaging today, a 3 or 5 year fixed rate seems a good compromise.
Finally, the comments of some Lifers implies that the potential 'pain' of borrowers is a relevant factor for the BoE when making its rate decision. Notwithstanding my view on the path of rates above, I'd politely remind them of the following: 1. If it isn't hurting it isn't working (ie. the pain is the point if the BoE is someday concerned about overheating); 2. there is approx £1trillion in UK savings accounts (in addition to other products linked to interets rates) - a 1% increase in rates will put an extra £10bn into their pockets - someone's pain is another's pleasure. Savers may argue borrowers have had it too easy for too long.
Most mortgages brokers can get a fee from the lender (apart from a few of the "direst " ones) so they shouldn't need to charge you anything. I have never charged a client a fee, even if the loan is only £150k, as the lender usually pays around 0.35 - 0.4% thus paying the broker £500 - £600.
I was speaking to an investment manager yesterday and their stance is that rates will start to go up this time next year but only very slowly and will rise no more than 2% over the next 3-5 years. As mentioned on here the differential between banks standard variable rates & the BOE base rate used to be around 2%, whereas now it is at least 3.5% and can be as much as 5%. This will be squeezed back down again once rates rise.
Certainly fixing your mortgage rate for 3-5 years at anything below 4% would seem sensible, although 2 year fixes just mean you will be looking to remortgage just as rates are increasing. tough one.
quite a few of my clients owe me big time when I managed to get them lifetime trackers at 0.39% above base back in 2007 - one even got. 0.1 below base !!!!
Did you know base rate was going to fall to 0.5% then?
If those clients do owe you for arranging them a tracker does that mean that those that you arranged a long term fixed rate owe you a kicking?
I also maintain (and this is not personal) that if a broker is not charging a fee then be wary as I was under the impression that they have to offer to be fee based if they call themselves 'Independent'. If you don't do that does that mean that you are not independent? I only ask because those lender fees sound quite high for residential loans. As you don't charge a fee do you only use the banks that pay you more?
I still maintain that the best brokers charge a fee, and they tend not to ram loads of expensive insurances down your throat. It's a false economy to employ someone that says they will work for nothing as no one ever does. At least if they are upfront about what they charge you know what you will be paying and what you are getting for it.
I can charge a fee & then rebate the commission, but I can't see the point. Why charge £1000 and then rebate back £600 when I can just get the £600 from the lender. I call that a win-win situation.
Should one lender charge £500 & another £600 doesn't bother me. I have to show what is best for my client - if its the lower £500 then c'est la vie is the way I look at it. Of course, if a lender doesn't pay a fee at all I am can always charge my client the £1,000 or tell the client to deal with the lender direct.
as for the expensive insurance...........I am a firm believer that a borrower should have adequate cover for death & serious illness cover as well as cover against accident & sickness. If you call advising that a loan is fully covered so that dependants aren't left destitute or out on the streets should the un-expected happen as "ramming loads of expensive insurance down your throat" then yes, I hold my hands up to making sure my clients are fully aware of the facts.
Responding to the original question, the mortgage interest rate will always follow interest rates, and no one can predict precisely when interest rates will move. All we know is that rates are historically low and if the economy is improving interest rates will rise as soon as unconstrained inflation is seen as the major risk.
But Newyorkaddict makes the most relevant point, it is the rate relative to inflation and earnings that matters. I had a mortgage in the 1970's that was at least 9% interest, but inflation was kicking off at over 12% and earnings were increasing above inflation. All that mattered was whether you could afford the initial repayments, and they gradually reduced in real terms.
We are now in the 1970s in reverse where interest rate rises are likely to jump ahead of earnings, inflation is likely to remain in check, so your repayments on a floating rate are increasing in real terms. I would think that any fixed rate deal is better from the risk perspective in managing finances. Taking a punt on paying less interest for a few years but exposing yourself to the risk of an unsustainable financial burden is a high risk punt that you would only take if you were comfortably covering your outgoings and had a reserve.
If you are exposed to a currency risk, say Euros, you hedge the risk and it will cost you a premium to have certainty. If you want to take a position and bet on the Euro consider that the market has already done the guesswork in setting exchange rates, so assume it is a 50:50 bet on which way it will move.
Most mortgages brokers can get a fee from the lender (apart from a few of the "direst " ones) so they shouldn't need to charge you anything. I have never charged a client a fee, even if the loan is only £150k, as the lender usually pays around 0.35 - 0.4% thus paying the broker £500 - £600.
I was speaking to an investment manager yesterday and their stance is that rates will start to go up this time next year but only very slowly and will rise no more than 2% over the next 3-5 years. As mentioned on here the differential between banks standard variable rates & the BOE base rate used to be around 2%, whereas now it is at least 3.5% and can be as much as 5%. This will be squeezed back down again once rates rise.
Certainly fixing your mortgage rate for 3-5 years at anything below 4% would seem sensible, although 2 year fixes just mean you will be looking to remortgage just as rates are increasing. tough one.
quite a few of my clients owe me big time when I managed to get them lifetime trackers at 0.39% above base back in 2007 - one even got. 0.1 below base !!!!
Did you know base rate was going to fall to 0.5% then?
If those clients do owe you for arranging them a tracker does that mean that those that you arranged a long term fixed rate owe you a kicking?
I also maintain (and this is not personal) that if a broker is not charging a fee then be wary as I was under the impression that they have to offer to be fee based if they call themselves 'Independent'. If you don't do that does that mean that you are not independent? I only ask because those lender fees sound quite high for residential loans. As you don't charge a fee do you only use the banks that pay you more?
I still maintain that the best brokers charge a fee, and they tend not to ram loads of expensive insurances down your throat. It's a false economy to employ someone that says they will work for nothing as no one ever does. At least if they are upfront about what they charge you know what you will be paying and what you are getting for it.
I can charge a fee & then rebate the commission, but I can't see the point. Why charge £1000 and then rebate back £600 when I can just get the £600 from the lender. I call that a win-win situation.
Win-win for who? You.
What about transparency for the customer, or do the concepts behind RDR mean nothing to you?
There's a comment on this thread that mortgage advice is "free" and you yourself would have us believe that your advice costs the customer nothing. But that's just not true.
Not having a dig. And everyone deserves to get paid for the advice they give. But at the moment the true cost of this advice is generally hidden away from the customer. That can't be right in this day and age.
To be fair, the brokers always advise how much they are being paid by the lender on the paperwork. It's not hidden, in fact it's really transparent.
A broker like golfaddick could spend hours and hours of his time talking to timewasters or just people whom he is unable to help. I also find it a bit more palatable to not have to part with cash per se in return for brokers help. It is fine with me for their fee to come off the lender.
Lending fees, however, I think are utterly criminal. Some banks and building societies charge more than the cost of a decent second hand car for you to have the privelege of borrowing money secured against your greatest material asset at an inflated rate and then do it all again in a few years. Revolting that and I hope some loophole is found to reimburse everyone who has ever had to pay a lending fee
Osborne also spoke last night and said he would grant the BoE new powers to impose maximum loan-to-value and loan-to-income ratios on mortgage lending, which Carney welcomed in his speech to London's financial community.
They're worried about loosening standards on lending and this is a factor in UK house prices being up 11% in the last year (more in London & South East),
Imposing stricter LTV/LTI ratios could temper the situation on its' own, but still expect the first rise in base to be Q1 2015 at the moment.
To be fair, the brokers always advise how much they are being paid by the lender on the paperwork. It's not hidden, in fact it's really transparent.
A broker like golfaddick could spend hours and hours of his time talking to timewasters or just people whom he is unable to help. I also find it a bit more palatable to not have to part with cash per se in return for brokers help. It is fine with me for their fee to come off the lender.
Lending fees, however, I think are utterly criminal. Some banks and building societies charge more than the cost of a decent second hand car for you to have the privelege of borrowing money secured against your greatest material asset at an inflated rate and then do it all again in a few years. Revolting that and I hope some loophole is found to reimburse everyone who has ever had to pay a lending fee
Hmm. So you are happy a bank pays your broker a fee but don't want the same bank to charge you a fee, so effectively they would be buying in the business.
Not all mortgages have high fees, you can shop around and find one with lower than what you state. Ultimately fee plus interest is simply the cost of borrowing money (risk) and there needs to be a cost or no one would ever lend any. Why people would be reimbursed for paying a lending fee which is clearly stated in a contract they have accepted I can't understand.
Unless you have access to the magic database which all independent financial advisers have it is impossible to shop around on a level playing field. People like golfaddick who I don't know personally, make a living by utilising this database and making it simple for idiots like me to see the best rate or to compare comparabr rates. When they find one or a few that suit my needs or the needs of any client they print off some information which includes how much commission they will get from the lender. If there is no fee from them and no fee from the lender it is the lender paying them, not me (directly anyway)
What I was saying is that is a touch more palatable to most than dear golfie showing me a computer screen and without directly advising me and asking for a fee when I make my mind up
I have absolutely no problem with these guys earning their money this way. In the murky, turgid business of moving and buying houses the good ones are worth it. There are some absolute shithouses doing it who need striking off but the same can be said for most professons
If we are talking about estate agents or fixed fee conveyancing solicitors then they can all trapse off to hell in a broken handcart for all I think of them and their filthy, grimy world they inhabit. Absolute vermin of the highest order. And any financial adviser based in am estate agency should be struck off as they are deviants as gar as I am concerned
We are having a mini export boom, a stronger pound (from interest rate rises) which is already happening could affect that making our goods more expensive abroad
We are having a mini export boom, a stronger pound (from interest rate rises) which is already happening could affect that making our goods more expensive abroad
Well, maybe, but a lot of the raw materials used are imported (or priced in US$) so they'll be cheaper....
I got my first mortgage two years ago but we were unable to get one with the 10% we had saved because previous applications messed our credit rating up (tip don't make too many applications which do a credit check).
Ended up taking a loan out in my parents name to make the deposit up to 20% which made our mortgage repayments much lower but the mortgage and the loan together equal only slightly more than we would have been paying with a 90% mortgage. Its a 5 year fixed and the loan is for 5 years so we don't have to worry too much about our mortgage rates going up at the end of the fixed period because we will have paid off the loan.
Possibly a tip if you are worried about not being able to afford it when the fixed rate ends.
Heaven knows what we are exporting - we don't make anything except weapons.
Well, since you ask, the UK has the 11th largest manufacturing industry in the world. Manufacturing accounts for 54% of UK exports and directly employs around 2.6mn people. (For example my niece's husband works for a firm which designs and manufactures moulds and machinery for the pre-cast concrete industry. Most of their products go overseas.) Then there are JCBs; Rolls Royce aero & marine engines; Range Rovers; Jaguars; Minis; (in fact around 1.2mn cars in total plus another 2mn engines) Scotch; textiles; chemicals and pharmaceuticals; the electronics industry employs 850,00 people and is the World's 5th largest. The plastics industry turns over £19bn per annum - 35% is exported. Construction is big too. In fact the list is almost endless.
You always know when a bust is round the corner when someone says 'which may mean the old 'boom and bust' cycle is over'. Opening up the fiscal plug, and toppling the monetary dam, can't work every cycle. 1.4 trillion of personal debt at low level interest rates is unaffordable when rates move quickly, and people have no potential for wage inflation: YOU'VE GOTTA JOB, BE THANKFUL, WE THE DIRECTORS ARE THE ONLY ONES WHO GET PAYRISES.
My guess is taper in the US will lead to great uncertainty in the markets, uncovering the same problems in the bond and derivative markets as before. And when you have a dead President in 2016, no doubt the arguement will be with neo-cons of an Austrianist approach. Over the next 1-2 years rates won't be as low as this for years, and interest rates will further decouple from wage inflation. Anyone who thinks access to finance is getting cheaper in the next few years would have to be a delusional estate agent.
As people have pointed out cafcfan much manufacturing in this country constitutes importing goods from China, maybe a little bit of assembly, and putting a badge on it. The economist will argue knowledge is the key profit maker. Designing an iPhone is the real profit maker, building it is a fraction of the cost/profit base. Shame it employs no one at home, and is indicative of an unsustainable debt based retail economy.
Having an open viewing on the wife's flat today 3 out of 10 pulled out beforehand saying new mortgage affordability rules meant they could no longer get a mortgage
The hype: The affordability tests are there to stop young people "overstretching" and getting themselves into trouble financially.
How touching. The truth of the matter is that the lenders want to increase their returns whilst decreasing their risks. One way of doing that is restricting what first time buyers can borrow thus effectively kicking them out of the market place whilst lending to the buy to let investors who can put down a sizeable cash deposit. Higher interest rates and charges to them can then be justified by saying that they are taking money that first time borrowers could borrow!
Result: social mobility in the form of more people owning their homes takes a massive hit and we become more "Europeanised" as the majority are forced to rent from a wealthy minority as happens throughout most of the rest of Europe. Property ownership is a British thing. An Englishman's home is his castle and all that.
Over simplified obviously to allow for the constraints of a football forum but my take on it and not a million miles from the real motives.
Sub - Prime started all this in that grossly unsuitable people were lent to in the name of political correctness. Now that the financial institutions have taken a hit in diminished returns the baby has been thrown out with the bathwater and the poor ordinary aspirational working class oik trying to better him (or her) self pays for it as usual.
How can genuine affordability tests be a bad thing?
People love to bash the banks.
Lend too much to joe public = banks fault because those poor sods don't have the brain power to think about what they can afford and should have had the bank advising them better.
Affordability tests = bad thing. You are stopping joe public being able to buy a house because you are not lending them enough.
Charging a fee= bad thing. Thought you were a charity and lending money out of the goodness of your hearts.
Don't get me wrong, banks have done many bad things, and are being held to account for it quite rightly. Affordability tests are not one of those bad things though.
I love this thread. On a Mirrwarrrr forum the person asking the question would be called a middle class wanker and the number of posts would stop at one.
How can genuine affordability tests be a bad thing?
People love to bash the banks.
Lend too much to joe public = banks fault because those poor sods don't have the brain power to think about what they can afford and should have had the bank advising them better.
Affordability tests = bad thing. You are stopping joe public being able to buy a house because you are not lending them enough.
Charging a fee= bad thing. Thought you were a charity and lending money out of the goodness of your hearts.
Don't get me wrong, banks have done many bad things, and are being held to account for it quite rightly. Affordability tests are not one of those bad things though.
depends on how they quantify "affordability". The new MMR guidelines are a joke if that is what the banks are now following. As an advisor I previously was able to say to a client " so & so bank will lend 4x income, so you can borrow xxx" Now, all the lenders do is ask you to fill in an affordability calculator - adding in outgoings such as council tax, utility bills, transport costs etc.....all for a property that you haven't moved into and wont know these figures. On asking a lender what to put in they either say "guess" or more commonly they will have it already pre-populated based on the average for that type of dwelling. Also, woebetide you if you have children - this will severely go against you in the affordability stakes as they expect you to be paying ££££ for nursery fees, childcare costs, afterschool tuition etc etc. I recently had a client who could show months & months of bank statements showing her quite frugal outgoings but was turned down by 4 lenders saying that as she had 3 kids she could only afford £150k even though her income was around £50k pa......totally ignoring the fact her husband did not work and was a househusband,
Not read this thread but I can say with some confidence they ain't about to go down
given the announcement today from BoE that may or may not be true, i.e. bank rates may not be as high as people expected and therefore affecting the long term mortgage rates you can get, any views @golfaddick et al?
Comments
Google it - if you are a first time buyer only. Interesting concept.
If those clients do owe you for arranging them a tracker does that mean that those that you arranged a long term fixed rate owe you a kicking?
I also maintain (and this is not personal) that if a broker is not charging a fee then be wary as I was under the impression that they have to offer to be fee based if they call themselves 'Independent'. If you don't do that does that mean that you are not independent? I only ask because those lender fees sound quite high for residential loans. As you don't charge a fee do you only use the banks that pay you more?
I still maintain that the best brokers charge a fee, and they tend not to ram loads of expensive insurances down your throat. It's a false economy to employ someone that says they will work for nothing as no one ever does. At least if they are upfront about what they charge you know what you will be paying and what you are getting for it.
The UK housing boom is limited to London and the SE and any frothiness seems to be most prevalent amongst cash buyers (which would concern the BoE less). Inflation is virtually non-existent and where it is present (eg. energy), it is more than offset by clear deflation (eg. clothing, gadgets etc.).
There are considerable and understated disinflationary factors present in the global economy (technology, the debt overhang from the crisis, high youth unemployment, immigration, cheap emerging market labour etc.) which may mean the old 'boom and bust' cycle is over, replaced by mediocre growth which to those without much wage bargaining power (the vast majority sadly) will feel like recession.
Either way it is important to remember that it is 'real' interest rates (after inflation) which matter, not nominal rates. Homebuyers in the 1970s faced punishingly high nominal rates initially but inflation soon ate away at the real value of the debt. Japan has had zero nominal interest rates for decades but relatively high real interest rates due to deflation - unsurprisingly Japanese property has been a terrible asset class.
With regard to a tracker vs fixed rate, the above view would seem to favour a tracker but the best rates available today are way higher than pre-crisis (as others have noted), and can moreover only go in one direction. Fixed rates are based upon expectations of future rates (aka the 'swap curve') and may not increase if base rates rise since much is already priced in (they might even move lower). Thus if I was remortgaging today, a 3 or 5 year fixed rate seems a good compromise.
Finally, the comments of some Lifers implies that the potential 'pain' of borrowers is a relevant factor for the BoE when making its rate decision. Notwithstanding my view on the path of rates above, I'd politely remind them of the following: 1. If it isn't hurting it isn't working (ie. the pain is the point if the BoE is someday concerned about overheating); 2. there is approx £1trillion in UK savings accounts (in addition to other products linked to interets rates) - a 1% increase in rates will put an extra £10bn into their pockets - someone's pain is another's pleasure. Savers may argue borrowers have had it too easy for too long.
I can charge a fee & then rebate the commission, but I can't see the point. Why charge £1000 and then rebate back £600 when I can just get the £600 from the lender. I call that a win-win situation.
Should one lender charge £500 & another £600 doesn't bother me. I have to show what is best for my client - if its the lower £500 then c'est la vie is the way I look at it. Of course, if a lender doesn't pay a fee at all I am can always charge my client the £1,000 or tell the client to deal with the lender direct.
as for the expensive insurance...........I am a firm believer that a borrower should have adequate cover for death & serious illness cover as well as cover against accident & sickness. If you call advising that a loan is fully covered so that dependants aren't left destitute or out on the streets should the un-expected happen as "ramming loads of expensive insurance down your throat" then yes, I hold my hands up to making sure my clients are fully aware of the facts.
But Newyorkaddict makes the most relevant point, it is the rate relative to inflation and earnings that matters. I had a mortgage in the 1970's that was at least 9% interest, but inflation was kicking off at over 12% and earnings were increasing above inflation. All that mattered was whether you could afford the initial repayments, and they gradually reduced in real terms.
We are now in the 1970s in reverse where interest rate rises are likely to jump ahead of earnings, inflation is likely to remain in check, so your repayments on a floating rate are increasing in real terms. I would think that any fixed rate deal is better from the risk perspective in managing finances. Taking a punt on paying less interest for a few years but exposing yourself to the risk of an unsustainable financial burden is a high risk punt that you would only take if you were comfortably covering your outgoings and had a reserve.
If you are exposed to a currency risk, say Euros, you hedge the risk and it will cost you a premium to have certainty. If you want to take a position and bet on the Euro consider that the market has already done the guesswork in setting exchange rates, so assume it is a 50:50 bet on which way it will move.
With low savings rates it might be worth having the flexibility given by the variable rate and over paying to finish earlier without penalty.
So the speculation is now, that they will rise by the year end, or early next year at the latest.
(Which Is what I predicted yesterday. I thank you :-)
What about transparency for the customer, or do the concepts behind RDR mean nothing to you?
There's a comment on this thread that mortgage advice is "free" and you yourself would have us believe that your advice costs the customer nothing. But that's just not true.
Not having a dig. And everyone deserves to get paid for the advice they give. But at the moment the true cost of this advice is generally hidden away from the customer. That can't be right in this day and age.
A broker like golfaddick could spend hours and hours of his time talking to timewasters or just people whom he is unable to help. I also find it a bit more palatable to not have to part with cash per se in return for brokers help. It is fine with me for their fee to come off the lender.
Lending fees, however, I think are utterly criminal. Some banks and building societies charge more than the cost of a decent second hand car for you to have the privelege of borrowing money secured against your greatest material asset at an inflated rate and then do it all again in a few years. Revolting that and I hope some loophole is found to reimburse everyone who has ever had to pay a lending fee
They're worried about loosening standards on lending and this is a factor in UK house prices being up 11% in the last year (more in London & South East),
Imposing stricter LTV/LTI ratios could temper the situation on its' own, but still expect the first rise in base to be Q1 2015 at the moment.
Not all mortgages have high fees, you can shop around and find one with lower than what you state. Ultimately fee plus interest is simply the cost of borrowing money (risk) and there needs to be a cost or no one would ever lend any. Why people would be reimbursed for paying a lending fee which is clearly stated in a contract they have accepted I can't understand.
Unless you have access to the magic database which all independent financial advisers have it is impossible to shop around on a level playing field. People like golfaddick who I don't know personally, make a living by utilising this database and making it simple for idiots like me to see the best rate or to compare comparabr rates. When they find one or a few that suit my needs or the needs of any client they print off some information which includes how much commission they will get from the lender. If there is no fee from them and no fee from the lender it is the lender paying them, not me (directly anyway)
What I was saying is that is a touch more palatable to most than dear golfie showing me a computer screen and without directly advising me and asking for a fee when I make my mind up
I have absolutely no problem with these guys earning their money this way. In the murky, turgid business of moving and buying houses the good ones are worth it. There are some absolute shithouses doing it who need striking off but the same can be said for most professons
If we are talking about estate agents or fixed fee conveyancing solicitors then they can all trapse off to hell in a broken handcart for all I think of them and their filthy, grimy world they inhabit. Absolute vermin of the highest order. And any financial adviser based in am estate agency should be struck off as they are deviants as gar as I am concerned
Ended up taking a loan out in my parents name to make the deposit up to 20% which made our mortgage repayments much lower but the mortgage and the loan together equal only slightly more than we would have been paying with a 90% mortgage. Its a 5 year fixed and the loan is for 5 years so we don't have to worry too much about our mortgage rates going up at the end of the fixed period because we will have paid off the loan.
Possibly a tip if you are worried about not being able to afford it when the fixed rate ends.
My guess is taper in the US will lead to great uncertainty in the markets, uncovering the same problems in the bond and derivative markets as before. And when you have a dead President in 2016, no doubt the arguement will be with neo-cons of an Austrianist approach. Over the next 1-2 years rates won't be as low as this for years, and interest rates will further decouple from wage inflation. Anyone who thinks access to finance is getting cheaper in the next few years would have to be a delusional estate agent.
The hype: The affordability tests are there to stop young people "overstretching" and getting themselves into trouble financially.
How touching. The truth of the matter is that the lenders want to increase their returns whilst decreasing their risks. One way of doing that is restricting what first time buyers can borrow thus effectively kicking them out of the market place whilst lending to the buy to let investors who can put down a sizeable cash deposit. Higher interest rates and charges to them can then be justified by saying that they are taking money that first time borrowers could borrow!
Result: social mobility in the form of more people owning their homes takes a massive hit and we become more "Europeanised" as the majority are forced to rent from a wealthy minority as happens throughout most of the rest of Europe. Property ownership is a British thing. An Englishman's home is his castle and all that.
Over simplified obviously to allow for the constraints of a football forum but my take on it and not a million miles from the real motives.
Sub - Prime started all this in that grossly unsuitable people were lent to in the name of political correctness. Now that the financial institutions have taken a hit in diminished returns the baby has been thrown out with the bathwater and the poor ordinary aspirational working class oik trying to better him (or her) self pays for it as usual.
People love to bash the banks.
Lend too much to joe public = banks fault because those poor sods don't have the brain power to think about what they can afford and should have had the bank advising them better.
Affordability tests = bad thing. You are stopping joe public being able to buy a house because you are not lending them enough.
Charging a fee= bad thing. Thought you were a charity and lending money out of the goodness of your hearts.
Don't get me wrong, banks have done many bad things, and are being held to account for it quite rightly. Affordability tests are not one of those bad things though.