The Year Of The Fox Posted 8 October 2013 Posted 8 October 2013 Anyone tempted at all by this? I've had a look in here, but can't see any answers. http://m.bbc.co.uk/news/business-24447335 Does the borrower have to pay back the rest of the deposit that was guarenteed by the government? What would the cons be for a NONE first time buyer using this scheme to move to a better/newer home?
MooseBreath Posted 8 October 2013 Posted 8 October 2013 Yes the borrower does have to pay back the whole lot. If you're already on the property ladder then you'd be better off saving for a larger deposit because that will get you a better rate.
Rincewind Posted 8 October 2013 Posted 8 October 2013 Anyone tempted at all by this? I've had a look in here, but can't see any answers. http://m.bbc.co.uk/news/business-24447335 Does the borrower have to pay back the rest of the deposit that was guarenteed by the government? What would the cons be for a NONE first time buyer using this scheme to move to a better/newer home? I can see one reason not to be tempted.
absolutelegend Posted 8 October 2013 Posted 8 October 2013 If i was a first time buyer, working hard to save a deposit, I'm pretty sure I would think this was a good thing. I also understand that building soc's are already offering near 95% mortgages, so maybe this isn't as big a story as it's being made out to be. However, with the government guranteeing some of the loan, then hopefully this will be reflected in the rates that Lloyds and RBS are able to offer people.
Saxondale Posted 8 October 2013 Posted 8 October 2013 Anyone tempted at all by this? I've had a look in here, but can't see any answers. http://m.bbc.co.uk/news/business-24447335 Does the borrower have to pay back the rest of the deposit that was guarenteed by the government? What would the cons be for a NONE first time buyer using this scheme to move to a better/newer home? The government bit doesn't really have any bearing on the buyer, they're simply underwriting part of the loan - ie. taking some of the risk of the lending.
The Year Of The Fox Posted 8 October 2013 Author Posted 8 October 2013 So its not actually a 5% deposit that you're paying then?
Lobsterboyuk Posted 8 October 2013 Posted 8 October 2013 What happens when interest rates go up? People joining this scheme are borrowing at a high multiple of their earnings, won't take much of a rate rise before their repayments skyrocket and become even more unaffordable. Also if the government are underwriting 15% of this loan and carrying the risk, why can the banks be allowed to charge a premium fee and interest rate compared to their 80% loan to value products?
MooseBreath Posted 8 October 2013 Posted 8 October 2013 So its not actually a 5% deposit that you're paying then? Yes, it is. The govt guarantees 15%, which means if you default, the tax payer comes to the rescue and the bank gets their 15%. But if you don't default, the guarantee is never used and it works just like any other mortgage.
The God Emperor Posted 8 October 2013 Posted 8 October 2013 isnt this pretty much the same as the scheme that sparked the housing and banking crisis or am I remembering it wrong?
MooseBreath Posted 8 October 2013 Posted 8 October 2013 isnt this pretty much the same as the scheme that sparked the housing and banking crisis or am I remembering it wrong? You're remembering it wrong
The Year Of The Fox Posted 8 October 2013 Author Posted 8 October 2013 Yes, it is. The govt guarantees 15%, which means if you default, the tax payer comes to the rescue and the bank gets their 15%. But if you don't default, the guarantee is never used and it works just like any other mortgage. So I could buy a bigger house than I'm already in whilst putting down half the % i did 2 years ago? (I put 10% down)
MooseBreath Posted 8 October 2013 Posted 8 October 2013 So I could buy a bigger house than I'm already in whilst putting down half the % i did 2 years ago? (I put 10% down) Yes you could
The God Emperor Posted 8 October 2013 Posted 8 October 2013 You're remembering it wrong I just had a quick look, yes I am remembering it wrong
Jon the Hat Posted 8 October 2013 Posted 8 October 2013 The newbuy scheme with the 20% equity loan is a fantastic deal. This is encouraging the housing market to get moving by helping first time buyers (mostly) get on the ladder. As someone who bought his house with a 100% mortgage I am all in favour!
Saxondale Posted 8 October 2013 Posted 8 October 2013 Basically it's non news, because banks were offering 95% mortgages again anyway. They may be a little picky about who they lend to, but that may transpire to be the case on this scheme anyway. New homes aren't exactly cheap anyway, so finding a 5% deposit is still going to mean, in most cases, finding £7,500 grand or so. I dare so most people at whom this scheme is aimed won't have that money in their back pocket anyway, so its impact probably isn't going to be as stark as some people are forecasting.
ADK Posted 8 October 2013 Posted 8 October 2013 Terrible idea, going to lead to another housing bubble. Cynical attempt by the Tories to make themselves popular.
Strokes Posted 9 October 2013 Posted 9 October 2013 Used a similar scheme to buy my house in December, it was the lend a hand scheme. I'm not sure if this is the same but we actually got mortgage rates as if we had put 25% deposit. Which means our mortgage and living cost were significantly lower than renting as before. Only downside is dealing with the solicitors, they are wankers.
Webbo Posted 9 October 2013 Posted 9 October 2013 Used a similar scheme to buy my house in December, it was the lend a hand scheme. I'm not sure if this is the same but we actually got mortgage rates as if we had put 25% deposit. Which means our mortgage and living cost were significantly lower than renting as before. Only downside is dealing with the solicitors, they are wankers. You're not wrong.
MooseBreath Posted 9 October 2013 Posted 9 October 2013 Basically it's non news, because banks were offering 95% mortgages again anyway. They may be a little picky about who they lend to, but that may transpire to be the case on this scheme anyway. New homes aren't exactly cheap anyway, so finding a 5% deposit is still going to mean, in most cases, finding £7,500 grand or so. I dare so most people at whom this scheme is aimed won't have that money in their back pocket anyway, so its impact probably isn't going to be as stark as some people are forecasting. It isn't just for new homes though. Outside of London I would have thought most people looking to get on the ladder go for properties worth about £100k, so now they only need £5k rather than about £20k.
MooseBreath Posted 9 October 2013 Posted 9 October 2013 Terrible idea, going to lead to another housing bubble. Cynical attempt by the Tories to make themselves popular. [Labour press]blah blah blah Tories are wrong blah blah blah[/Labour press]
Strokes Posted 9 October 2013 Posted 9 October 2013 Terrible idea, going to lead to another housing bubble. Cynical attempt by the Tories to make themselves popular.Your right, let's all vote labour, they would never a create boom and bust economy. Oh wait.
FoxesAreBlue Posted 9 October 2013 Posted 9 October 2013 You're not wrong. When I bought my 1st flat my solicitor was brilliant. Every other **** involved with the deal (in particular Steve the Mortgage Advisor you cvnt), I hope they rot in hell.
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