Does anyone still offer 100% mortgages?

shamblertine

I know AIB does but do any other banks/building societies offer 100% mortgages?

ntlbell

thankfully, I don't think any are now

shamblertine

why do you say thankfully?

CamperMan

ntlbell wrote: »

thankfully, I don't think any are now

why are you thankful for that?

ntlbell

shamblertine wrote: »

why do you say thankfully?

Have you been out of the country for a long time?

CamperMan

OP read this. link

shamblertine

ntlbell wrote: »

Have you been out of the country for a long time?

so 100% mortgages caused the crisis?

ntlbell

shamblertine wrote: »

so 100% mortgages caused the crisis?

It hand a very big hand to play yes.

shamblertine

ntlbell wrote: »

It hand a very big hand to play yes.

thats just not true

testicle

Does anyone offer mortgages anymore ?

lucky-colm

doubt if aib still do 100% mortages

ntlbell

shamblertine wrote: »

thats just not true

How so?

shamblertine

lucky-colm wrote: »

doubt if aib still do 100% mortages

They do for professionals whose salary is likely to increase to 60k or so in the next 3-5years, which hopefully includes me although I'm not qualified yet.

shamblertine

ntlbell wrote: »

How so?

lets not get into a long boring pointless drawn out argument and agree to disagree

CamperMan

shamblertine wrote: »

They do for professionals whose salary is likely to increase to 60k or so in the next 3-5years, which hopefully includes me although I'm not qualified yet.

sounds unfair to me, why should someone earning big bucks get a 100% mortgage when they can clearly afford the deposit.

shamblertine

because they would be lower risk than people earning less

leeroybrown

CamperMan wrote: »

sounds unfair to me, why should someone earning big bucks get a 100% mortgage when they can clearly afford the deposit.

Banks have a very narrow definition of 'professional'. They'd happily give money to people in this category such as newly qualified doctors and other people who fall into their definition of career professions who have a very good chance of being good for the money.

CamperMan

shamblertine wrote: »

because they would be lower risk than people earning less

is that so??, architects are losing jobs, solicitors that deal with the property side of things are struggling, there are many professional jobs that are no longer safe!

greendom

Bearing in mind the continuing fall in house prices, as soon as a 100% mortgage is offered, it is worth more than 100%. Putting aside the mess the banks are in at the moment and their reluctance to lend anybody anything, handing out loans that are a high proportion of the house value is just lunacy currently.

shamblertine

CamperMan wrote: »

is that so??, architects are losing jobs, solicitors that deal with the property side of things are struggling, there are many professional jobs that are no longer safe!

I know but professionals are no more likely to be losing their jobs than non professionals, in which case the higher earner will be viewed more favourably

shamblertine

greendom wrote: »

Bearing in mind the continuing fall in house prices, as soon as a 100% mortgage is offered, it is worth more than 100%. Putting aside the mess the banks are in at the moment and their reluctance to lend anybody anything, handing out loans that are a high proportion of the house value is just lunacy currently.

but negative equity isn't going to affect your ability to make repayments, so it doesn't make any difference to banks if you have a 100% mortgage or a 92% mortgage

Plastic Bari

I think 95% Would be a good and fair target! Has anybody seen 95% around ? Everywhere i seem to look its always 92% !!!

greendom

shamblertine wrote: »

but negative equity isn't going to affect your ability to make repayments, so it doesn't make any difference to banks if you have a 100% mortgage or a 92% mortgage

Well it does to the bank if you default. And in the current climate, it's a bad idea both for the lender and borrower to have such a high loan percentage.

I agree that if you don't intend to move and you have no problem in making the repayments, then negative equity doesn't matter at all. There's no guarantee that this situation will continue for the length of the mortgage though is there ?

lucky-colm

shamblertine wrote: »

They do for professionals whose salary is likely to increase to 60k or so in the next 3-5years, which hopefully includes me although I'm not qualified yet.

i stand corrected :mad:

shamblertine

greendom wrote: »

Well it does to the bank if you default. And in the current climate, it's a bad idea both for the lender and borrower to have such a high loan percentage.

I agree that if you don't intend to move and you have no problem in making the repayments, then negative equity doesn't matter at all. There's no guarantee that this situation will continue for the length of the mortgage though is there ?

Why does loan percentage matter to a bank? Surely its simply a matter of assessing if you can make the monthly repayments.

If you default, then in the current climate both parties are screwed either way. If the bank repossesses they will be left with a house in negative equity which they won't be able to sell because of policies they have introduced to make it harder to get mortgages. So giving 92% mortgages or 100% mortgages doesn't make a damn bit of difference to them.

shamblertine

Plastic Bari wrote: »

I think 95% Would be a good and fair target! Has anybody seen 95% around ? Everywhere i seem to look its always 92% !!!

no not according to this website:

http://www.mortgages.ie/index.cfm/spKey/customers.mortgage_rates.lender_facilities?CatId=1

although UB offers 95% mortgages to professionals

greendom

shamblertine wrote: »

Why does loan percentage matter to a bank? Surely its simply a matter of assessing if you can make the monthly repayments.

If you default, then in the current climate both parties are screwed either way. If the bank repossesses they will be left with a house in negative equity which they won't be able to sell because of policies they have introduced to make it harder to get mortgages. So giving 92% mortgages or 100% mortgages doesn't make a damn bit of difference to them.

In the current climate I agree with you - and for that reason even 92% is too high - loans should be no more than 70% of the current house value- this gives the borrower more leway if he is struggling and gives the lender more hope of retrieving some of the loan if there is a default

shamblertine

but that will just ensure prices keep crashing and remain in negative equity for a long time, which again increases risk for them

greendom

shamblertine wrote: »

but that will just ensure prices keep crashing and remain in negative equity for a long time, which again increases risk for them

But then that just goes to prove that house prices are still far too high and still have a long way to drop.

MarkR

shamblertine wrote: »

Why does loan percentage matter to a bank? Surely its simply a matter of assessing if you can make the monthly repayments.

If you default, then in the current climate both parties are screwed either way. If the bank repossesses they will be left with a house in negative equity which they won't be able to sell because of policies they have introduced to make it harder to get mortgages. So giving 92% mortgages or 100% mortgages doesn't make a damn bit of difference to them.

For preceisely the reason you mentioned. The banks don't want to be left with a house worth less then the outstanding loan. The want a house that they can sell quick to cover what's left of the loan. It's not about your payments, it about what happens if you miss your payments.

oceanclub

Plastic Bari wrote: »

I think 95% Would be a good and fair target! Has anybody seen 95% around ? Everywhere i seem to look its always 92% !!!

95% would be good for banks if they thought that house prices were going to go down less than 5%. But they know that it's going to be more - therefore, anyone taking out a 95% mortgage, if forced to sell, will not be able to pay back the bank.

P.

gurramok

shamblertine wrote: »

Why does loan percentage matter to a bank? Surely its simply a matter of assessing if you can make the monthly repayments.

If you default, then in the current climate both parties are screwed either way. If the bank repossesses they will be left with a house in negative equity which they won't be able to sell because of policies they have introduced to make it harder to get mortgages. So giving 92% mortgages or 100% mortgages doesn't make a damn bit of difference to them.

Climate has changed. Banks need to make money and the only secure way of doing that from mortgages is getting deposits without having a house they cannot sell at a profit when repossessed.
They know instant negative equity is on the cards hence they do not want a greater risk of default.

The shoe was on the other foot when prices rose constantly, equity was produced on paper and 100% mortgages looked good to them as a small risk.

The above points answer what ntlbell was stating, those 100% mortagges played a part in where we are now.

shamblertine wrote:

thats just not true

Tell that to the tens of thousands of mostly young people in negative equity right now, alot of them took out 100% mortgages on apts at the peak which have crashed in value and they are stuck where they are for many years.

oeb

shamblertine wrote: »

but negative equity isn't going to affect your ability to make repayments, so it doesn't make any difference to banks if you have a 100% mortgage or a 92% mortgage

When you take out a loan you need to secure something against it that is equal or greater than the value of the loan. If you have Negative equity (Liabilities (Mortgage) are greater than assets (House Value)) you put the bank in the position where should they need to reposess your house (And there are many reasons you might not be able to keep up payments, more than simply losing your job) they will lose money. Because the house prices are still falling, they are very unlikely to offer 100% mortgages as it is nearly certain that the collateral offered up against loan will soon be worth less than the loan (ignoring intrest for now).

In a rising market banks have the freedom to offer 100% loans because it does not really matter to them if people can pay them back or not. Either the house owner pays back the loan plus intrest (profit for the bank), or the bank can quickly sell on the house at a profit. Either way they are covered.

In todays market the bank will more than likely make a loss on the value of the house, and it will take longer to shift. At the moment there are lots of people defaulting on their loans, which means losses for the banks (in a lot of cases, particularly if the house was bought in the last three or four years). Banks are unlikely to give 95% plus to anyone they do not see as safe. People who are very unlikely to lose their jobs (For example, doctors or dentists, possibly army personell, possible members of AGS etc) (They would also need to be in an income bracket that would enable them to make the payments of course).

That is my understanding of how it works anyway.

Edit : It is also worth noting, that people who hold negitive equity are much more likely to default. Many people see a major issue with paying back a loan for 10% or 15% more than the value of their home. There are few downsides to defaulting (other than reposetion)

Salome

EBS are offering up to 100% mortgages on affordable housing schemes based on a LTV of 80%.

confuzed

Salome wrote: »

EBS are offering up to 100% mortgages on affordable housing schemes based on a LTV of 80%.

would anyone please explain what does that mean?
100% mortgage of 80% LTV.

Xiney

Why would people want 100% mortgages available (ever again)?

If banks only give out 90% or, better, 80% mortgages, and people have to have a 10-20% deposit to buy, it ensures house prices won't go f*cking nuts because it limits the prices based on what people can afford to save in the first place.

Also, if buyers can't manage to save up a down payment, it doesn't bode well for their financial planning skills and ability to repay a mortgage.



There are about a million and one other reasons not to give out 100% mortgages.

oceanclub

Salome wrote: »

EBS are offering up to 100% mortgages on affordable housing schemes based on a LTV of 80%.

I think that's ****ing outrageous. The government have already had to cover EBS under the guarantee scheme and they have _already_ written off 20% of their property loans (http://www.irishtimes.com/newspaper/finance/2009/0313/1224242800049.html). Now, here they are giving 100% of the cost of a property to people who are the least able to deal with any property drop, and which they know _for a fact_ will be worth less than that. The government should nail their bollocks to a ****ing tree over this.

P.

leeroybrown

confuzed wrote: »

would anyone please explain what does that mean?
100% mortgage of 80% LTV.

LTV means loan-to-valuation ratio. A €160k loan for a property valued at €200k gives you a LTV of 80%.

oceanclub wrote: »

I think that's ****ing outrageous.

It's not quite a classic 100% mortgage. The buyer is only getting a loan for a maximum of 80% of the value of the home even if they are getting that section as a 100% mortgage.

EDIT: I'll also add that as far as I know the mechanisms involved in the Affordable Housing scheme will impose additional limitations on the maximum borrowings and repayments based on income.

confuzed

leeroybrown wrote: »

It's not quite a classic 100% mortgage. The buyer is only getting a loan for a maximum of 80% of the value of the home even if they are getting that section as a 100% mortgage.

That's right it is effectively 80% mortgage. Why on this earth they give confusing statements.
SO NONE OF THE BANKS GIVE 100% MORTGAGE. Although AIB website says 100% mortgage for young professionals but i think practically days are over.

trevorku

Aib offering 100%? You must be mistaken, ive scoured every bank in the country and all wont give more than 92% which is rubbish because it means you need a deposit of between 15k and 25k or something before they even give you the loan, oh how I wish I had taken a 100% mortgage before the economy collapsed, surely it cant stay like that forever?

leeroybrown

confuzed wrote: »

That's right it is effectively 80% mortgage. Why on this earth they give confusing statements.

Technically it is a 100% mortgage as the buyer is borrowing the entire reduced 'affordable' price and supplying no deposit themselves. The fact that it's an affordable housing scheme means that they are subject to additional limitations and commitment that make it a viable offer for the bank.

Another point to note is that for Affordable Housing the availability of near-100% mortgages are the rule not the exception. Ulster Bank also offer 100% of the reduced 'affordable' price. I'm sure there are others out there who will do it to.

trevorku wrote: »

Aib offering 100%?

As 'confuzed' says it's specific to their 'Young Professionals' mortgage packages. They're targeting young recently qualified doctors, dentists, etc. who have a large disposable income, no kids, a secure medium term income with secure salary future increases. Right now the number of 'professionals' who qualify for this is very restrictive. I think that BoI still offer a similar mortgage.

shamblertine

Xiney wrote: »

Also, if buyers can't manage to save up a down payment, it doesn't bode well for their financial planning skills and ability to repay a mortgage.

Its not that they can't manage to save it up, its just that it will take them many years to save up. The majority of first time buyers will be on lowish income, therefore saving up 25k or so for a deposit for a one bed apartment will take a long time, perhaps until they are 30 or over. In that time, they may have started a family and so need somewhere bigger than a 1 bed, which means they will have to save for an even bigger deposit which will take more years. So young people these days will only likely be able to buy property when they are about 35 or older.

trevorku

EBS First Mortgage features

* Choice of variable or fixed interest rates - or a split loan, where some of your repayments are at a fixed rate and some are at a variable rate
* Up to 92% loan to property value (LTV) available
* EasyStep(1) option available - reduced mortgage repayments for the first 3 years
* Option to repay interest only(2) for the first three years, depending on what you earn and the amount you want to borrow
* 35 year term available

leeroybrown

The poster above who brought EBS up was referring specifically to their affordable housing mortgage not to their normal first time buyer mortgage. They probably shouldn't have mentioned in the first place as it's not really a standard 100% mortgage and the confusion it's caused is derailing this thread.

Sqaull20

Xiney wrote: »

Why would people want 100% mortgages available (ever again)?

If banks only give out 90% or, better, 80% mortgages, and people have to have a 10-20% deposit to buy, it ensures house prices won't go f*cking nuts because it limits the prices based on what people can afford to save in the first place.

Also, if buyers can't manage to save up a down payment, it doesn't bode well for their financial planning skills and ability to repay a mortgage.



There are about a million and one other reasons not to give out 100% mortgages.

Yeah it should be 20% or more for everyone.100% meant anyone that had an income could get a mortgage and alot of them didnt think long term, they wanted now and hoped for the best.If it was 40k of their own money which would take the average person years to spare, they wouldn't be so fast in signing the papers.

Xiney

shamblertine wrote: »

Its not that they can't manage to save it up, its just that it will take them many years to save up. The majority of first time buyers will be on lowish income, therefore saving up 25k or so for a deposit for a one bed apartment will take a long time, perhaps until they are 30 or over. In that time, they may have started a family and so need somewhere bigger than a 1 bed, which means they will have to save for an even bigger deposit which will take more years. So young people these days will only likely be able to buy property when they are about 35 or older.

You are still operating under the assumption of current property prices.

25k for a deposit for a one bed? No one bed should be more than 100 000 euro, and it would have to be a very well appointed, well positioned one.

This is what I'm saying: if people NEED to have a deposit of at least 10% (20% being better) then the amount people can save based on their income will determine the prices that people can sell at: if nobody is able to pay 300 000 for a one bed shoe box, then the prices will be set at more reasonable levels.

Also, in a two income couple earning, we'll say, 45k combined, (which until recently was not unheard of nor the combination of excessive wages) they should be able to save up 10 grand with perfect ease very year. That means in 3 years, they'd have 30k, which would be enough for a 20% deposit on a 3 bed 150 000 semi detatched home. That's where the market should be, frankly.

And people who spent 30k on a wedding and then got a 100% mortgage... well. I'm not personally loving this recession, seeing as I'm unemployed, but it really is a much needed wake up call.

oceanclub

trevorku wrote: »

Aib offering 100%? You must be mistaken, ive scoured every bank in the country and all wont give more than 92% which is rubbish because it means you need a deposit of between 15k and 25k or something before they even give you the loan

Yes, god forbid that someone show that are reasonably financially responsble before banks give them a 6-figure loan for a depreciating asset.

P.

shamblertine

Xiney wrote: »

You are still operating under the assumption of current property prices.

25k for a deposit for a one bed? No one bed should be more than 100 000 euro, and it would have to be a very well appointed, well positioned one.

No one bed should be more than 100,000 considering how small they are, but the reality is its extremely rare to find a 1 bed apartment in Dublin for less than 230,000, the majority of 1 bed apartments are 300,000 and over. Which is crazy. The apartments don't seem to be falling in price much at all, they still have a long long way to go.

Fighting Irish

CamperMan wrote: »

sounds unfair to me, why should someone earning big bucks get a 100% mortgage when they can clearly afford the deposit.

sure we'll just reward the people who don't put in as much effort

SkepticOne

shamblertine wrote: »

No one bed should be more than 100,000 considering how small they are, but the reality is its extremely rare to find a 1 bed apartment in Dublin for less than 230,000, the majority of 1 bed apartments are 300,000 and over. Which is crazy. The apartments don't seem to be falling in price much at all, they still have a long long way to go.

The only thing propping up the price at the moment is the "affordable" schemes. I doubt if many ordinary buyers are willing to pay this sort of money.

Xiney

shamblertine wrote: »

No one bed should be more than 100,000 considering how small they are, but the reality is its extremely rare to find a 1 bed apartment in Dublin for less than 230,000, the majority of 1 bed apartments are 300,000 and over. Which is crazy. The apartments don't seem to be falling in price much at all, they still have a long long way to go.

It's extremely rare NOW, because of 100% mortgages being handed out willy nilly and people thinking that it's ok to spend a third of a million euro on a 1 bedroom apartment! They have far to fall, but without some serious government intervention the market will ensure they do.

Here is the concept in short: if there is less money to spend, prices will fall. If people have more money to spend, prices will go up.

Being tied to a limited deposit limits the money people have to spend, therefore limiting the prices at which the majority of houses will be sold.


I've basically repeated the same thing three times now, and you seem to be having trouble grasping it. Oh well.