100% Mortgage

[PeasAndRice]

Hi All,

I know anyone on here is unlikely to be 'informed' on these sort of things....but does anyone think the 100% (FTB) mortgage will ever come back, and if so when?

I know its a finger in the air job....but just curious as to others feelings...

Personally i feel i will be back, but not untill 2010?

Whats the thoughts?

[Sammy Snake]

They probably will return eventually but not for while - I think 2010 is a bit optimistic.

[Oneeyedvic]

Yes, certain that they will come back, but agree not as soon as 2010.

The housing market (in my opinion) will bottom out at around 2010 and the 100% mortgages (together with 5 times salary lends) will only return when people can't afford to get on the housing ladder - ie just before it peaks. This won't be until around 2018 in my opinion.

[PeasAndRice]

so additionally, what would your reccomendation be to a first time buyer that wants to buy late this year?

Save 15k and get on at the best rate you can, or plum for a 95% mortgage and suffer teh current +7% rate fixed?

ATM i can get 7.09, for a 10k deposit....on 170k...

should i wait will next year? what?

[Buenchico]

Given that one of the prime causes of the current worldwide economic recession was the collapse of the American sub-prime mortgage market, I would be extremely surprised to see the return of 100% mortgages. They're far more likely to be restricted to 90% or, at the very most, to 95%. Further the multiplier used by banks to calculate the maximum loan available (base upon the applicant's annual income) is likely to return to the former of levels of 2.5 to 3 times gross annual income, rather than the 6 (or more) times which was being offered prior to the financial crash. So, even if the banks were to theoretically offer 100% mortgages, most people wouldn't qualify because their gross annual income wouldn't be high enough.

Of course, there's no absolute rule barring anyone from getting a 100% mortgage now. I'd be prepared to bet that Richard Branson and Bill Gates would have no problems in getting a 100% mortgage on a small terraced house. It's only the people who actually want the mortgages who can't get them.

House prices are likely to continue to fall during the next year (at least). Your savings will (presumably) go up during that period, making it easier to get a mortgage. So waiting seems to be the best option.

Chris

[PeasAndRice]

thanks for that....seems a reasonable case to me

[Sasha13]

Totally agree with Buenchicho.

I honestly believe that anyone contemplating buying a house before the end of this year is mad.

I also think anyone contemplating buying a house that costs more than 3-3.5 times their salary or on more than a 90% LTV mortgage is nuts.

Have a look at www.housepricecrash.co.uk

Some VERY clever people on there who can give you many many many reasons as to why you should save as hard as you can for as long as you can before even thinking of buying.

I'm in the same position - I'm saving hard and watching and waiting. Prices have already come down a lot in this area and have a ways left to go yet.

Good luck!!!

[Uzoma]

Totally agree with Sasha13 & Buenchico.

It's really optimistic to expect the 100% mortgage until house prices are really on the up. Considering that lenders that went this way are the ones in the most trouble (HBoS, Bradford & Bingley) it will take a HUGE amount of risk and confidence in the market to predict it will rear its head again any time this decade.

As for a mortgage with less than a 25% deposit, I'm not sure that it's a good idea either.

Have a look on the BBC's website here --> http://news.bbc.co.uk/1/hi/business/7807724.st m . It doesn't bode well for house price increases any time soon. I'd say keep on saving, keep on watching.