my advice

100% don't do it !

Good luck..

Me and the Mrs both pay 40% tax, and went for advice..

As we only have a £10k deposit, we where told the best they could offer was £100k 😐

and that was with a 7.5% rate..

The best advice they could give was "go and rent and save like ****"

so, where are goin to carry on living on one wage, and saving the other..

Banks are still worried about prices crashing further.

The bigger the deposit the less risk for them if you default as they have more of a chance getting the loaned money back while any negative equity is paid for by your deposit.

I would imagine regardless of earnings the loan amount in Teetosugars case was controlled by risk management by the bank.

Thats what we thought- mortageabilty wise we where fine, its just that we had "such a small deposit…"
Actually at least £82k (and £60k+ take home). Which does make me wonder why you haven't been "saving like ****" up to now if you've only got £10k deposit. Of course your mortgageability wouldn't be so fine if one of you lost your job and interest rates went up – which is the sort of thing the banks take into account in the current climate.

The thing is, with people asking about 100% mortgages, has nobody learnt anything? In the good old days of stable economic systems even 90% mortgages were pretty much unheard of – people saved up a deposit first. Though I'm probably ignoring the way our whole economy is driven by debt nowadays 🙄

Will,

Rather than post peoples names here please e-mail me direct at taylorbarrs@googlemail.com and I'll send you some names and numbers.

actually, the bottom (or near bottom) of the market is exactly the safest time for 100% mortgages 🙂

I gather you will also need to demonstrate a good credit history (i.e. not a zero credit history, but one, say with a credit card that you manage well) these days. Seems counter intuitive to me, but was on Moneybox so it must be true 🙂

Very true – one issue being that they need to stop doing so at some point when we are no longer at or near the bottom (the other being that they won't realise the loan value when they try to dispose of the asset, even if the market hasn't fallen, hence 90% is a reasonable maximum at any time).

…and of course the prices were driven by the ability to get a 100% mortgage on a silly multiplier.

Anyone who has a joint income of £80K should be laughed out of the room if they are only offering up a deposit of £10k.

Ok people are bringing up examples of £5k deposits 10yrs ago BUT when i bought my first house 10yrs ago i also put down a £6k deposit, difference was that was a much much higher percentage of my take home earnings.

£10k is a very low percentage of your available income and shows that either you have not got the ability to pay a mortgage of any greater amount than that offered OR you have shown little commitment to getting a mortgage and curbing your spending.

Personally i think banks have a duty to carry on taking this course of action. The government has absolutely no right to start pressuring the banks into silly lending which got us into this trouble in the first place.

This is not to be confucsed with the banks sitting on the money though. They should not be doing that either. It should be the correct interest for the correct risk. For the OP i would say he stacks up as a bad risk unless he can demonstrate a reason for such a poor deposit.

Then he has demonstrated that he isnt suitable to borrow anything more than that offered and should not be complaining. Thread finished

Some very big assumptions being made about the op's ability to save built on not a lot of knowledge of the person in question (nothing new there from what I've read in the past).

We can only work on assumptions unless the OP posts up the details of his past OR we have the benefit of a Mortgage interview with the OP which i would assume the lender would have. In which case that comments is no better than our presumptions.

The fact that someone has gone through the education system and come out with debts is not something the banks should have to bend over and take ot for. You know the chances are that you are going to finish your education in debt. You know that you are going to have to save for a few years to get a deposit etc etc. What difference does this make to the banks.

Its simple, if you want to get a mortgage you show an ability to pay it by having a good deposit or proof that you have enough income to cover the outgoings. If he has only £10k deposit from that income he has not demonstrated that ability unless there are other circumstances as you explained. But unless we know them, he doesnt get the money.

When I bought my house, 11 years ago, I had saved a £16k deposit on a salary of £26k – didn't take that many years either, just lived frugally.

Exactly.- Assuming of course I'm still employed..!!

Scott TB – in your professional opnion , what do you think the situation will be with regard to the availability of 95% mortgages in 12 months from now?
My neice and her boyfriend have just decided to get hitched and have started saving for a deposit. They're hoping that things will have returned to a more normal state (pre 125% mortgages to anybody with a handshake) by then. Is this likely or do you think they will need to wait (and save) longer?

Really?

I may have this all wrong, but I don't think money is in short supply.

CF quantitative easing

I've said this here before (and I don't mind if someone (preferably someone other than Stoner) wants to explain why I've got it wrong as I can hardly believe it myself) but BANKS DO NOT NEED TO TAKE DEPOSITS IN ORDER TO LEND MONEY – they just create a loan and at the same time, write down the amount they have lent as an asset on their books. The reason they won't lend though, is because there is no longer a market for those assets (debts) so they can't resell them and take a profit without taking a corresponding risk.

Anyhoo, the point is 100% mortgages just don't exist, but from experience, London & Country (brokers) offer the best (free) advice out there on what is available – if I wanted a mortgage I'd ring them.

I'll lend you a deposit a extortionate level of interest! 😀

I've said this here before (and I don't mind if someone (preferably someone other than Stoner) wants to explain why I've got it wrong as I can hardly believe it myself) but BANKS DO NOT NEED TO TAKE DEPOSITS IN ORDER TO LEND MONEY – they just create a loan and at the same time, write down the amount they have lent as an asset on their books. The reason they won't lend though, is because there is no longer a market for those assets (debts) so they can't resell them and take a profit without taking a corresponding risk.

Well, there's nothing stopping banks just giving away money either but they don't. It's all about perceptions of risk and given the beating that banks have had recently from risky lending they're perceiving a much higher level at the moment than they were. The deposit reduces the risk to them.

Ok, a fair few questions and opinions and, being a sucker for punishment and having time on my hands (I'm currently being made redundent – oh the joy of financial services) so here goes….

a) 95% Mortgages – I wouldn't expect to see them retuning for a good few years yet I'm afraid. The lenders would need to see a positive, sustained upwards trend in house prices as well as increased funding to them via wholesale money markets to justify it.

b) anagallis_arvensis – I'm afraid I can't give you specific advice here; but send me your location in the country (taylorbarrs@googlemail.com) and I can put you in touch with a decent advisor who'll be happy to help.

c) London & Country – I know L&C (they used to be one of my key accounts) and if you're happy to deal over the phone and all you want is mortgage advice (as opposed to full financial advice covering protection, pensions, etc) then they are brilliant.

d) Credit Score – the 999 refered to will be the credit score on an Experian or Equifax file. It's for guidence only – every lender will have their own credit score system and each will have their own "perfect client", so don't pay too much attention to the score on your credit file. I'd have to agree with the comments made that if you occupation is Armed Forces most score cards will punish you for it – it's a high risk occupation!

e) Quantitive Easing/Lack of Money (this might get heavy – sorry!):

Basically lenders can no longer sell debt on, the market is simply not there. So all lending is Balance Sheet Lending, i.e. they keep the loans. This means they have to fund the loans themselves in the long term, this ties up the money so they can't produce a new loan until older loans are paid-off.

Second issue is that they require money to be deposited to lend it out, this is from 2 sources – you and me (retail) and institutions (wholesale). Wholesale money is lacking (poor sales = no profit, so nothing to bank!) and retail money is fiercly competitive – that's why you can get a savings account at 3% when base rate is sub 1%. The problem is then; if you got the money in at 3% you have to lend it at over that to cover the 3%, plus your costs, plus porfit – hence mortgage rates are 4.5% and over.

Phew!