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Star Letter Extra 11/01/13

  • 11/01/2013
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Star Letter Extra 11/01/13
Each Friday, Mortgage Solutions takes a look back at the best reader comments on the website.

Buy-to-let growth driving housing market activity

I expect it will continue to do so for some time for the following reasons; first-time buyers may still need a 15% deposit even with shared ownership, changes in interest-only rules has meant that most young professionals who would expect a significant rising income are prevented from borrowing this way, inconsistencies with lenders affordability calculators and underwriter assessments.

John Morgan
08 Jan 2013 | 16:58

Industry hopes Barclays 95% mortgage will force high LTV rate war

Nothing more than a publicity stunt. If parents had the spare 10% then surely they would gift the money to the child in order to get an 85% mortgage with any other Lender at a better rate… It makes you wonder just who is sharing the brain cell with who up there at Barclays.

Paul Turner
09 Jan 2013 | 13:33

Nationwide crowned intermediaries’ favourite lender in 2012 – BDRC

Better than some… but they will not retain this if they keep dipping into dual pricing every so often. It is very frustrating for brokers. I vote for Coventry – at least they believe in a level playing field.

Stuart Duncan
09 Jan 2013 | 17:15

FOS proposes £5m levy hike on firms

The gist of this article indicates the reason the FOS want extra income is to pay for staff primarily to deal with PPI complaints, which have emanated as a result(in the main) of misselling by banks and building societies. Should the extra then not come from the culprits not others.

10 Jan 2013 | 14:56

Scottish council considers funding deposits for first-time buyers

“By providing the value of the difference between a 75% loan-to-value (LTV) mortgage and a 95% LTV mortgage…”.

In fact the council would not provide the extra 20% deposit other than by depositing a similar amount with the lender.

They would then get the money back after 5 years, plus interest, as long as the borrower had not defaulted in the meantime. If they have, the lender can use the deposited monies to offset any losses. The borrowers still get a 95% mortgage, just on 75% LTV terms.

These schemes are already widespread across the UK funded solely by Lloyds TSB at the moment where it is known as the ‘Local Lend a Hand’ scheme.

The lender wins (more security), the borrower wins (95% mortgage available) and the council takes the bulk of the risk – but history shows only up to 2% of FTB mortgages lead to repossession so for every £1million they use on the scheme the council may lose only £20,000 or so. Far safer than depositing in an Icelandic Bank, and it stimulates growth in the local housing economy.

Andy Wilson, Andy Wilson Financial Services Ltd
11 Jan 2013 | 13:09

Thank you for your comments this week.

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