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LadyDay
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Posted: Tuesday March 13th, 2007 20:40 |
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please can someone break it down for me
i have googled and get the bit on that you yourself agree that you can afford
please can someone give me a list of plus and minuses
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Le Moor
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Posted: Tuesday March 13th, 2007 23:29 |
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LadyDay wrote: please can someone break it down for me
i have googled and get the bit on that you yourself agree that you can afford
please can someone give me a list of plus and minuses
A Self-Cert Mortgage is a mortgage where no proof of income is required. The lenders are saying, "If you borrow less than 75% of the purchase price for e.g., we feel that your deposit is a big enough security for us to take a risk on not requiring to see your payslips or accounts if you're s/employed". They do still however ask that you declare what your income is on the application. The income declared must still match the lending criteria even though you are not proving it.
Last edited on Wednesday March 14th, 2007 06:34 by Le Moor
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Incognito
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Posted: Wednesday March 14th, 2007 01:32 |
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Good if you earn cash in hand money but I think the interest rates are higher.
These are useful for brothas keeping a money monkey babymother and/or the CSA off your scent LOL.
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Incognito
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Posted: Wednesday March 14th, 2007 01:41 |
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Saying that, I know people who have obtained mortgages from fraudulent financial advisors. You end up with a mortgage you can't afford but worse case you get a property you can rent or part rent to bring in the balance you can't afford.
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Le Moor
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Posted: Wednesday March 14th, 2007 06:55 |
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Incog, Interest rates are normally the same for self certs. You are technically viewed with some lenders as less of a risk because SC normally come with higher deposit criteria.
Yes crooked Brokers up and down the country use this type of mortgage to obtain funds for people who otherwise wouldnt be able to qualify. Simply by inflating the clients income to match the criteria. It is mortgage fraud nevertheless and one needs to be aware that if caught out, either the broker will be responsible for the lie or the client. This can happen for example if the accessors when checking your application find adverse credit or undisclosed committments on your credit file. At this point they reserve the right to request proof of your income as your credit rating has thrown you slightly outside of the criteria. They may also as another checking measure, put in a call to your employers to check your story about income etc. Obviously if you've lied the stories wont match unless you have anticipated the call somehow with someone schooled on giving the correct answers. Some ultra dodgy characters submitt fradualent payslips at this stage as well and end up incriminating themselves when further checks are done. Some get away with it too...
A few years back there was a big documentary on it and since then a few lenders tightened up their procedures. Maybe that was just to please regulators. The bottom line is banks are in the business of lending you money and they never make their criteria too difficult to obtain. Abbey National have recently led the way in being THE most irresponsible lender by lending the most money per your income. Northern Rock are worse imo but they dress it up differently so its not publicly obvious that they will lend huge amounts per your income.
Years ago banks used to lend 3 times your single income. Then we had the house price explosion, so the banks increased this multiple to 4 times and in Abbeys case five times your single income. Just so this matches the purchase prices of homes and means they hit their lending targets. However the issue is affordability. If houses prices have increased and wages havent followed respectively, then the gap on affordability widens.
For this reason i reckon we are potentially sitting on one of the worse recessions EVER. If interst rates keep rising then the amount of people who have borrowed mortgage amounts unproportionately to their incomes will become evident. Put that together with the high balances at present on credit cards, and you can see that the carnage will be epic. The only saving grace is that people have more equity in their homes now than they ever did, so remortgaging or downsizing could save some if this were ever the case.
We need another few years of stagnant house prices to allow the elements to replenish themselves. Not happening at the moment though.
Last edited on Wednesday March 14th, 2007 08:04 by Le Moor
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Backatya
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Posted: Wednesday March 14th, 2007 13:43 |
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Le Moor wrote: The bottom line is banks are in the business of lending you money and they never make their criteria too difficult to obtain. However the issue is affordability. If houses prices have increased and wages havent followed respectively, then the gap on affordability widens.
Le Moor makes some very valid points. I underline those two because they are often overlooked by the average punter in his/her rush to 'own' property. The net result often being that people get in over their head where even a slight change in your 'regular income' circumstances (e.g. a below inflation cost of living rise, or no cost of living rise at all) can mean that you find yourself struggling to pay your 'relatively-easy-to-acquire' mortgage.
At the end of the day the mortgage company has the security of an asset that can be taken away from you and sold to recoup their money.
Companies in the business of lending have a way of making it all seem like a walk in the park to get on the 'house ownership' ladder. But for a financial commitment that ties you up for around a quarter of your life, taking a long look before you leap is advice worth following.
Respect
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LadyDay
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Posted: Wednesday March 14th, 2007 23:13 |
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that makes it a lot more clearer.
i would get a mortgage anyway i can but dont want to over commit
this is all part of my research
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Myjoy
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Posted: Wednesday April 25th, 2007 22:32 |
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 Le Moor, bingo! This is the same kind of thing I was trying to explain to Incognito. Whereas when the building society was able to verify my credentials with my employers, what was the broker doing with the ex's credentials re verification. R u telling me that the broker and he was in cohoots! Then I really and truly am stuffed. As it was my employers that provided the funds, on my behalf, to purchase the property, what problems will this bring to me. If I lodged a complaint with a soliciitor what would be the implications for me? I am beginning to remember places and things too. Am I holding onto something that is worthless to my children in the long run? I really believe that sometimes you have to let people know that "money is the root of all evil' and when you get greedy you get nowt! This man must have seen me coming a long way off. I dont believe I cannot rectify this situation. Is tthere mo redress for situations such as these. If the building society themselves receive notification of a possible fraud would they investigate etc. What happens to the mortgagees etc I am beginnig to feel quite sick about this whole situation.
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Posted: Thursday April 26th, 2007 06:58 |
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Yep, had a friend who had this fraudulent independant financial advisor and to be honest in the game they are all at it. I remember whenI needed a mortgage and thought I'd take up his ex friends route just to keep it in the family more than anything else. I tell you the advisor was so suspicious of me he thought I was trying to shop him. He was used to having to inflate mortgages by some serious amount where with me I was borderline...he kept saying I wouldn't have any trouble getting the mortgage I need on the high road so why am I coming to him...again tried to explain that if he's a friemnd of my friend then he's mine too. In the end it was clear the mna was an a$$hole.....so I just got my mortgage from my own advisor I'd been with for 10 years.
Myjoy - at the end of the day, if you have a one to one relationship with your lender then they should tell you all of the risks but that isn't the case...as said many of these legal teams see you coming a mile of. I remember growing up and every second Thursday the insurance man would come to my house and my mum would pay her dues. She must have been doing that for over 25 years. She went to cash it all in and it's pure hard luck stories.
A report last week on critical illness insurance and how many people have their claims rejected after years of paying into it. Current trends suggest that as a percentage there are millions of people with policies who will not get paid out when that time comes.
There is only one reason these people lend you money, to make money. And when it comes to insurance there is only one reason why they take your money...to make money. These people are not your friends...you need to have your wits about you.
Just look at the endowment fiasco. The individuals involved know byu the time it catches up with them they'd have made their money long time.
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Posted: Thursday April 26th, 2007 07:14 |
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One thing I would suggest is beware a broker who charges extortionate fees.
When I first used my broker, he charged me £250. Since then he's not charged me anything at all.
What I didn't know until my last mortgage was that you pay the brokers, but they also get paid handsomely by the loan company. I think that's a rip-off and refuse to use any other broker.
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Myjoy
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Posted: Thursday April 26th, 2007 08:15 |
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Incognito - You havnt said what to do. Should I cut my losses and run or should I fight on as a principle.
Any one else! What to do?
I didnt cheat the system, so why should I lose out because of someone else's greed.
Le Moor - Whats your take?
Last edited on Thursday April 26th, 2007 08:16 by Myjoy
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Posted: Thursday April 26th, 2007 08:22 |
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Myjoy - have you sought legal advice yet? Find out what the worse case scenario is and make a decision from there. It might be a case where you could lose your home...and fork out money in legal fees to pay for that 'privilege'.
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Vezz.
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Posted: Thursday April 26th, 2007 08:26 |
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My Joy,
I don't understand your question. From what I gather from your other thread you bought the property over 10 years ago, and your ex over-inflated his earnings on the advice of the broker.
If so be the case, I don't think you should be concentrating on what happened then. Your first priority is to get your ex's name off the deeds, and you've been given excellent advice in the other thread.
With regard to your own mortgage, anyone can get a mortgage, even if you're bankrupt. These are called sub-prime mortgages, and they generally charge a higher rate of interest. The good thing is, after the tie-in period has ended (generally 2-4 years) you can shop around for a better rate.
The first thing to do is speak to a broker as to how much you can borrow. Not all brokers use the same lenders, so it may be best to shop around. Try to avoid the lenders you see advertised on TV and in the classified sections of newspapers.
If you want, I can give you the name of my broker, and you can call him for an informal chat.
Good luck.
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LadyDay
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Posted: Thursday April 26th, 2007 09:04 |
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oh vezz
pls pm me the details of your broker
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Posted: Thursday April 26th, 2007 11:49 |
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LadyDay wrote: please can someone break it down for me
i have googled and get the bit on that you yourself agree that you can afford
please can someone give me a list of plus and minuses
Hi Lady - you got some great information here but I would like to add mine because this what I counsel my clients on each day (but I am not a mortgage broker)
The bottom line is this:
if you have the income and the supporting documentation, the best type of mortgage to get (in terms of interest rates/terms and conditions) is always what we term here in the US, the full-documention loan with some downpayment.
I dont know what the acceptable amount is in the UK but in the area where I work in the US I would say a decent minimum downpayment is 3-5% of your loan amount.
In terms of risk to the lender, this is a low risk loan and thus translates into better interest rates/terms and conditions for you. This is always the best loan to get if you have the income and documentation to be approved for the sales price that you are looking for.
There are reasons not to do this type of loan and it usually has to do with clients who make alot of money but are self-employed and write-off alot in their taxes. Or people who get paid under the table and dont really have the documentation for their income etc.... or people who are just disorganized or dont what the headache of having their personal finances scrutinized under a microscope.
In the US we call the loan that you are asking about Stated Income Loans because you just state your income you dont have to provide the paperwork as proof. Of course, your income has to match up with your profession. For example, in general you wouldnt expect to see a bar tender making $120K and as Le Moor said that would be a red flag and would probably change your loan in underwriting from a stated product to a documented product.
There is also a No-Documentation loan but you have to put down 20% and have a good credit. The interest rate is higher on this loan but the process is streamlined and very quick. All they need is proof that the value of the house is equal to the sales price or more. Few of my clients do this loans and those that do usually have a ton of money and dont want to start producing the paperwork.
If this is your first house, Lady, go with a full documentation loan, if you can. The research shows that people with these traditional loans are less likely to have their homes foreclosed on them.
Call me if you ever want to buy property in Maryland/DC/Virginia!
Good luck!
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Le Moor
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Posted: Thursday April 26th, 2007 17:40 |
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@ Joy
From what i can fathom you're trying to see whether theres anything you can do to get you partner prosecuted for obtaining the mortgage fraudulently.
I cant really advise you on this as there's no telling what your Lender may do if they prove the mortgage was obtained fraudulently. Worse case senerio you could end up cutting off your nose to spite your face, as they may be within their rights to forclose the entire mortgage and demand their money back, i really dont know. There is also the issue of 'its your word against your partners' if he decides to maintain that you were aware of the fraud; which no doubt he will if you shop him up and he decides to bring you down with him. Could all get very messy and might not do you any favours. Best case senerio they prosecute him after a long drawn out court case and by default he is removed from the mortgage. Thats just a guess as it may not be possible to do this, again talk to a solicitor on this issue.
Personally i would be more focused on the things we spoke about on the other thread such as gaining sole possesion of your home and sole ownership. Speak to a Solicitor to stop him from entering the home, then talk to your Lender to see how much they will lend you if you transfer into sole names, then speak to a solicitor to see how much you would have to pay him as a settlement. Precisely in that order. From there you work out whats possible and whats not. If its not possible then with your solicitor work out your options based around the sale of the property.
Be patient and do one thing a step at a time. Keep it all to yourself and only liase through a solicitor.
Last edited on Thursday April 26th, 2007 17:48 by Le Moor
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Posted: Thursday April 26th, 2007 20:16 |
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Some great and sound advice on this thread.
@Joy
If you have time in todays Telegraph there is a very good article about a judgement in respect to an unmarried couple and their their rights to a property after splitting up.
@All
My company, "The Southsea Company Ltd" has a very good alternative investment much better than property it's called:
"Dutch Tulips" 
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Myjoy
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Posted: Thursday April 26th, 2007 23:00 |
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Dada
Many thanks for that I was hoping somebody would know about a case in point. I will try and get hold of the article mentioned and have a good read.
Le Moor
Wishful thinking on my part. All out revenge and all that, it would do the kids no good to try to prosecute or persecute their father. I will take the advice that has given to me by YOU ALL and act accordingly.
Vezz
Many thanks I will bear this offer in mind and take it up as and when. I will let you have my e-mail address in due course.
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Posted: Thursday April 26th, 2007 23:59 |
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LadyDay wrote: oh vezz
pls pm me the details of your broker
ps - in general you will get cheaper rates and/or fees and also better mortgage product if you work with a direct lender and not with a Broker. Anyway, that's how it works over here in the US.
I dont generally like dealing with Brokers unless I am working with a sub-prime client and then you dont really have much choice. if people come to me with good financials I always refer them to direct mortgage lenders.
I am not sure how the lending thing works in the UK anymore but I am sure it is the same principle.
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Posted: Friday April 27th, 2007 00:01 |
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Dada wrote: Some great and sound advice on this thread.
@Joy
If you have time in todays Telegraph there is a very good article about a judgement in respect to an unmarried couple and their their rights to a property after splitting up.
@All
My company, "The Southsea Company Ltd" has a very good alternative investment much better than property it's called:
"Dutch Tulips"
@ dada - I dont geddit. Please explain. (re: dutch tulips)
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Le Moor
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Posted: Saturday April 28th, 2007 04:15 |
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Happiness wrote: LadyDay wrote: please can someone break it down for me
i have googled and get the bit on that you yourself agree that you can afford
please can someone give me a list of plus and minuses
Hi Lady - you got some great information here but I would like to add mine because this what I counsel my clients on each day (but I am not a mortgage broker)
The bottom line is this:
if you have the income and the supporting documentation, the best type of mortgage to get (in terms of interest rates/terms and conditions) is always what we term here in the US, the full-documention loan with some downpayment.
I dont know what the acceptable amount is in the UK but in the area where I work in the US I would say a decent minimum downpayment is 3-5% of your loan amount.
In terms of risk to the lender, this is a low risk loan and thus translates into better interest rates/terms and conditions for you. This is always the best loan to get if you have the income and documentation to be approved for the sales price that you are looking for.
There are reasons not to do this type of loan and it usually has to do with clients who make alot of money but are self-employed and write-off alot in their taxes. Or people who get paid under the table and dont really have the documentation for their income etc.... or people who are just disorganized or dont what the headache of having their personal finances scrutinized under a microscope.
In the US we call the loan that you are asking about Stated Income Loans because you just state your income you dont have to provide the paperwork as proof. Of course, your income has to match up with your profession. For example, in general you wouldnt expect to see a bar tender making $120K and as Le Moor said that would be a red flag and would probably change your loan in underwriting from a stated product to a documented product.
There is also a No-Documentation loan but you have to put down 20% and have a good credit. The interest rate is higher on this loan but the process is streamlined and very quick. All they need is proof that the value of the house is equal to the sales price or more. Few of my clients do this loans and those that do usually have a ton of money and dont want to start producing the paperwork.
If this is your first house, Lady, go with a full documentation loan, if you can. The research shows that people with these traditional loans are less likely to have their homes foreclosed on them.
Call me if you ever want to buy property in Maryland/DC/Virginia!
Good luck!
Hi
Happiness,
Whats the average price of a 2 bed apartment in Maryland/DC/Virginia in an average area with good amenities and close to public transport?
Also what would this same property cost to rent per month?
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Posted: Saturday April 28th, 2007 19:26 |
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wow - that's a wide area to cover, Le Moor.
ok - let me narrow it down to Montgomery county in Maryland because that's where a do alot of business. I would say an average 2bedroom condo goes for about $250-300K with monthly condo fees (service fees) around $220-400/month.
2 bedrooms can rent from $1400/1500 upwards per month on average.
Do you have a specific area in mind?
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then you haven't even begun to think about what it means to be human" ~ Dr C.T.Vivian
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Dada
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Posted: Sunday April 29th, 2007 00:05 |
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@Happiness
Google Dutch Tulip & South China Sea Bubbles
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