First Time Buyers Move In For £99

[manxchatterbox]

....but doesn't that mean you have a 100% mortgage??

 

looks far too risky if you look at this article:-

 

A MORTGAGE crisis is looming for first-time buyers over the aggressive marketing of interest-only and 100pc mortgages by banks and building societies, the Consumers' Association said yesterday.

 

The Financial Regulator yesterday also warned banks and borrowers to exercise caution. A spokeswoman for the watchdog said there were huge risks associated with 100pc and interest-only mortgages.

 

Figures in a research report by Davy Stockbrokers estimated recently that up to four out of every 10 mortgages sold to first-time buyers are now 100pc homeloans.

 

The report also found that the average first-time buyer was being offered a 35-year mortgage in a bid to counteract rapidly rising housing prices.

 

Yesterday, chief executive of the Consumers' Association Dermott Jewell said the promotion of 100pc and interest-only mortgages was "dangerous and an accident waiting to happen".

 

"We were promised by the financial industry when these products were introduced that they would only be offered to a certain few. That is certainly not the case now."

 

With interest-only mortgages, the monthly payments to the lender only go towards paying off the interest on the loan, but none of the capital.

 

In the case of 100pc mortgages, a consumer borrowers the full price of their home.

 

Most lenders will offer you a percentage of the value of the home you want to buy - for example, 92pc of the value. It was traditional to have to provide 10pc of the value of the home from your savings.

 

A spokeswoman for the Financial Regulator said banks had a responsibility to ensure that the mortgage products they provide were suitable for lenders.

 

Consumers themselves need to take into account likely changes in their own circumstances, such as a change in career or the arrival of children.

 

In Britain, in the past few days interest-only and 100pc mortgages have been put at the top of a list of "emerging retail risks" by regulators there. The prospect of rising interest rates for Irish consumers has prompted market watchers to raise fears about the sustainability of the housing market.

 

A further 1pc rise in interest rates could see many borrowers having to put aside as much as 39pc of their net income to cover homeloan costs.

 

For a €360,000 loan over 35 years, the hit to net income would work out at about €189 a month, Davy Stockbrokers has worked out.

 

 

or look at this link also on the same subject:-

 

http://www.businessworld.ie/livenews.htm?a...rollingnews.htm

[ste1205]

....but doesn't that mean you have a 100% mortgage??

 

 

Not necessarily.

 

We bought our first flat in London with a £99 deposit.

 

The 5 per cent deposit was paid by the mortgage company. The interest was also fixed for two years and then reverted the banks standard variable rate.

 

The only condition was that we had to stay with the lender for 5 years or pay 6 months interest to move mortgage.

 

We would never have got on the property ladder without it.

[ade]

I have to say, I think it's long overdue. The UK has been offering 100% mortgages for years, and over here used to be a max of 95% IIRC. Does a couple who save for years in order to pay a deposit of say £8.5k on a £170k house, really come to less risk than a couple who manage to actually get on the property ladder by putting £99 down? A young couple who fork out maybe £700 a month on a rented house stand little chance of being able to save an additional £8.5k without at least some help, or having no social life during the entire saving process.

 

As far as I'm concerned, getting people into their own 'owned' property without having to pay extortionate rental fees for years is a good thing.

[Albert Tatlock]

I think it is better that people are encouraged to save a deposit (rather than just pay £99), as this lowers the risk of them defaulting on a mortgage and ensures that they are disciplined enough to 'make regular payments'. IMHO, the fact that more and more developers/lenders are accepting £99 and allowing people to move in is a worrying sign, a sign that those 'controlling' the housing market are getting desperate to support current house prices by pulling in the more desperate (and higher risk) first time buyers.

 

We all need a place to live, and this fact should not benefit people who just happened to have been born at the right time and got into the market in the 90s, many of whom are now stopping young couples buying houses - having bought second homes in order to rent them out.

 

A policy of building a sufficient number of houses, aligning housing planning/development policies to average earnings would be much better. Tieing up high levels of our earnings into mortgages and rents stifles entrepeneurs, and forces more people below the poverty line.

 

In not so many years current policies will lead to a large percentage of the population who have no way of buying their own home, no way of affording to start a business, followed by the ultimate collapse of the housing market. IMHO, this collapse is less likely to happen on the Isle of Man as we have limited space and are likely to have a peak population - but it will eventually force Manx people off the island who cannot afford houses here, and replace them with more affluent people from the UK (i.e. those who bought in the 90's and pensioners seeking to avoid inheritance tax).

 

However, whatever the outcome, the banks will always be the winners, as regardless of what house prices do in the future, a debt is a debt.

[viperbl]

I think it is better that people are encouraged to save a deposit (rather than just pay £99), as this lowers the risk of them defaulting on a mortgage and ensures that they are disciplined enough to 'make regular payments'. IMHO, the fact that more and more developers/lenders are accepting £99 and allowing people to move in is a worrying sign, a sign that those 'controlling' the housing market are getting desperate to support current house prices by pulling in the more desperate (and higher risk) first time buyers.

 

This is a good thing.

 

Remember that the banks will look at people’s credit files and lifestyle to asses if they can afford the repayments and are not going to default on the mortgage. They will not just hand them out!

 

Also remember that for a lot of people this will be a long term investment, so wither a small deposit or not was put down now, in the future years there will most likely be equity growing.

[casio]

Bah!

 

Piffle on a jaundiced tit.

 

I called Heritage Homes and the lady on the phone informed me that the bargaintastic £99 and move in offer only applies to the new apartments on Douglas prom, nothing else.

 

Considering my missus won't consider living anywhere but Ramsey, that fucks that one in the arse, so to speak.

 

That's the last time I pray to the mortgage gods, bastards.

 

 

they have apartments in Ramsey, i bet they will do it up there if it works! leave it a week or so and see

[localyokel]

Also remember that for a lot of people this will be a long term investment, so wither a small deposit or not was put down now, in the future years there will most likely be equity growing.

 

I admire your optimism.

 

Just explain again then .... so they are a white hot investment opportunity .... so thats why they are tryng to shift them by the van load at 99 quid down instead of holding onto them themselves and renting them out so they keep the long term capital appreciation.

 

I see ...

 

Where do I sign again?

[thebees]

Oh the lovely bedsits on the promenade, yeah £99 is about all they are worth

My boss put a down payment on one in November last year, apparently he has made over £15K already...scuse me? how does that work? (please do not tell me - I am quite aware of the way the housing investment market works)

[viperbl]

Just explain again then .... so they are a white hot investment opportunity .... so thats why they are tryng to shift them by the van load at 99 quid down instead of holding onto them themselves and renting them out so they keep the long term capital appreciation.

 

I am not saying they are white hot, but if you plan to stay there for a number of years, there is no big difference with a deposit or not as it is not likely to be in negative equity in 10 years for example.

 

It is also much better than renting, which, lets face it, is throwing money away.

 

Also remember that not everyone can hold on to properties to rent out, even companies need capital for future projects possibly.

 

This kind of thing has been happening in the UK for long enough now. It’s possibly not ideal having 100% mortgage, but for a lot of people it’s a light at the end of tunnel and gets them on the property ladder and in their own house.

 

I have not looked at these properties, but my experience the banks over here will not release the money unless they believe it’s worth it.

[localyokel]

I have not looked at these properties, but my experience the banks over here will not release the money unless they believe it’s worth it.

 

Well in my experience banks will lend on anything that fits the computerised models that they allow managers to lend within. Its a numbers game, they have to lend money and to do that they have to do just two things 1. Find someone who wants to borrow money and 2. find an asset to secure the loan against.

 

It ain't rocket science.

 

If there was a keen rental market people would be holding on to these things. As it is they are selling.

[viperbl]

If there was a keen rental market people would be holding on to these things. As it is they are selling.

 

Its a good start, maybe these flats are not for everyone, but hopefully this will change things over here and more of the deals will come up for first time buyers and allow them to own their own property.

 

Can only be a good thing as far as I can see...

[localyokel]

If there was a keen rental market people would be holding on to these things. As it is they are selling.

 

Its a good start, maybe these flats are not for everyone, but hopefully this will change things over here and more of the deals will come up for first time buyers and allow them to own their own property.

 

Can only be a good thing as far as I can see...

 

I'm sorry ... experience tell me that when someone is bending over backwards to sell you something there is always a reason why.

 

First time buyers should not be "allowed" to buy property, they should be "able" to buy property - it is a free market everyone has the right to buy and by feeling you are being "allowed" this opportunity you are falling into the trap.

[viperbl]

I'm sorry ... experience tell me that when someone is bending over backwards to sell you something there is always a reason why.

 

First time buyers should not be "allowed" to buy property, they should be "able" to buy property - it is a free market everyone has the right to buy and by feeling you are being "allowed" this opportunity you are falling into the trap.

 

There could very well be ... but for example, I have purchased properties in the UK for below market rate, you could look at that and ask why, it was becuase the company needed money, fast and people got good deals...

[scoobe]

As long as you can pay the mortgage, and intend to hold on to your home for the long term, 5 years +, there is no problem with a 100% mortgage.

 

As for there not being enough housing available, in my experience, that is tosh. A market where there are more buyers than sellers results in properties being on the market for weeks, not months or years. A by-product is also rampant price inflation. Although it is quite possible for the inflationary element to happen on its own just by sellers/estate agents greed.

 

I bought a property last year, and virtually all of the sellers were desperate to sell, nothing that I was interested in, having been on the market for less than six months, many were much much longer, some sellers leaving the island, some sellers looking to move to a more suitable property.

 

From stories I have heard, It appears there is a lack of low cost rental properties, there is not a lack of housing for sale. Affordable housing? I've seen better houses, for cheaper prices, than the so called first time buyers houses that are currently for sale from developers.

 

And its true, a mortgage company won't lend you more than they think they could realise for a property should they have to sell it under distraint. Otherwise, they would ask you to take an insurance policy, with them as beneficiary, to cover any possible shortfall. Banks aint generally stupid.

[localyokel]

... but for example, I have purchased properties in the UK for below market rate, you could look at that and ask why, it was becuase the company needed money, fast and people got good deals...

 

I don't need to ask why.

 

The dynamics of the local property market are these: 1. There is no property shortage but there is a shortage of people wanting to sell at below what they think is the market price, and there are investors not wanting to release too much property onto the market as it lowers prices. 2. At the top end people are sat on a lot of cash who can afford to hold long term so if it was a great prospect its been bought, if it had good potential its been bought, if its not a total crock of cr*p its been bought. Its when investors stop buying in large numbers that you start worrying.

 

In 1992 we had a housing shortage, but not since. What we have now is a market that does not want to supply where the demand is because in the past investors have been prepared to outbid first time buyers and re-let.

 

So what you then have to look at is buyers - in the past lots of people have been moving to the IOM with cash because they've sold up in the UK and this drove up prices for 10 years or so. Now these people are not coming in such numbers at the mid level - but the market is pretty good for £500,000+ properties. The rental market is also patchy in the mid range because of oversupply.

 

So if your sat on big blocks of property who can you sell to?

 

All of a sudden people who wouldn't even talk to first time buyers are packaging first time buyer offers.