how much can i borrow? something that annoys me
Discussion
haworthlloyd1 said:
They never consider the meagre income they will have left each month and they never consider what they can actually afford - no wonder banks are in a mess. They simply borrow the max the bank says they can because they are clearly thinking ' if the bank let me borrow that then i must be able to afford it'.
Honestly, some of these people have no brain.
The banks are in a mess because they lent money to these idiots and because governments made it easy for them.Honestly, some of these people have no brain.
And then you've got idiot underwriters that cannot understand accounts. I have accounts showing profits of circa £200,000 plus for the last 2 years and profits of £90k from 3 years ago, a forecast from the accountant of between £150 and £200k profits for this year, bank statements to show the money coming in and they say I don't earn enough for a £142,500 mortgage!
Just because I pay myself a small salary, take dividend up to the higher rate threshold and then take the balance as directors loan repayments to keep the tax liabilities to the minimum.
Still, that was Abbey a couple of weeks ago. RBS are now doing the same dance with the accounts. Perhaps I could get the Inland Revenue to explain it to them!
Just because I pay myself a small salary, take dividend up to the higher rate threshold and then take the balance as directors loan repayments to keep the tax liabilities to the minimum.
Still, that was Abbey a couple of weeks ago. RBS are now doing the same dance with the accounts. Perhaps I could get the Inland Revenue to explain it to them!
What you can get and what you can afford are two totally different things, and people can't see this.
A credit card debt of £1000 stuck on a high APR because noone else will offer you credit for a balance tranfer can be easily unmanageable by a low earner or those with little disposable income. Yet said lender will usually be happy to up the limit even if they see that only minimum repayments are being made.
A credit card debt of £1000 stuck on a high APR because noone else will offer you credit for a balance tranfer can be easily unmanageable by a low earner or those with little disposable income. Yet said lender will usually be happy to up the limit even if they see that only minimum repayments are being made.
haworthlloyd1 said:
i am forever being asked, "I earn £25,000, how much can i borrow"
they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
If I say you can borrow £150,000 they immediately start looking at £160,000 properties and try and max up everything they have.
They never consider the meagre income they will have left each month and they never consider what they can actually afford - no wonder banks are in a mess. They simply borrow the max the bank says they can because they are clearly thinking ' if the bank let me borrow that then i must be able to afford it'.
Honestly, some of these people have no brain.
Bit of a sweeping generalisation don't you think? There's no way I would have got my first flat if I hadn't done this but myself and my wife were at the start of our careers and with in 2 years both our salaries had more than doubled. Strangely the mortgage became easily affordable very quickly.they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
If I say you can borrow £150,000 they immediately start looking at £160,000 properties and try and max up everything they have.
They never consider the meagre income they will have left each month and they never consider what they can actually afford - no wonder banks are in a mess. They simply borrow the max the bank says they can because they are clearly thinking ' if the bank let me borrow that then i must be able to afford it'.
Honestly, some of these people have no brain.
I am assuming you're job is as an IFA so don't you think it should be your job to give best advice and discuss affordability with your clients during your fact find?
haworthlloyd1 said:
Ungarsee said:
haworthlloyd1 said:
i am forever being asked, "I earn £25,000, how much can i borrow"
they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
If I say you can borrow £150,000 they immediately start looking at £160,000 properties and try and max up everything they have.
They never consider the meagre income they will have left each month and they never consider what they can actually afford - no wonder banks are in a mess. They simply borrow the max the bank says they can because they are clearly thinking ' if the bank let me borrow that then i must be able to afford it'.
Honestly, some of these people have no brain.
Bit of a sweeping generalisation don't you think? There's no way I would have got my first flat if I hadn't done this but myself and my wife were at the start of our careers and with in 2 years both our salaries had more than doubled. Strangely the mortgage became easily affordable very quickly.they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
If I say you can borrow £150,000 they immediately start looking at £160,000 properties and try and max up everything they have.
They never consider the meagre income they will have left each month and they never consider what they can actually afford - no wonder banks are in a mess. They simply borrow the max the bank says they can because they are clearly thinking ' if the bank let me borrow that then i must be able to afford it'.
Honestly, some of these people have no brain.
I am assuming you're job is as an IFA so don't you think it should be your job to give best advice and discuss affordability with your clients during your fact find?
However, my point is that people really don't even think about affordability. If they could borrow for a bigger house even if it left them with only £300 left per month after the mortgage there are many that would do it.
Yes, i know that it has proven to be a great decision for people that bought years ago etc and i'm not disputing that however my point is they DONT EVEN THINK about things and just blindly want to borrow as much as they can.
Obviously there are plenty of people out there that are financial timebombs but hopefully if something good can come from the credit crunch it will be that people will realise that s
t can actually happen.ukshooter said:
And then you've got idiot underwriters that cannot understand accounts. I have accounts showing profits of circa £200,000 plus for the last 2 years and profits of £90k from 3 years ago, a forecast from the accountant of between £150 and £200k profits for this year, bank statements to show the money coming in and they say I don't earn enough for a £142,500 mortgage!
Just because I pay myself a small salary, take dividend up to the higher rate threshold and then take the balance as directors loan repayments to keep the tax liabilities to the minimum.
Still, that was Abbey a couple of weeks ago. RBS are now doing the same dance with the accounts. Perhaps I could get the Inland Revenue to explain it to them!
I never underwrote mortgages, but if it was a finance deal I'd ask you to provide a letter from your accountant along the lines of.... Dear Sir, Salary is X, however total Mr. Shooters income last year was X from Y & Y in accordance with such and such legalisation.Just because I pay myself a small salary, take dividend up to the higher rate threshold and then take the balance as directors loan repayments to keep the tax liabilities to the minimum.
Still, that was Abbey a couple of weeks ago. RBS are now doing the same dance with the accounts. Perhaps I could get the Inland Revenue to explain it to them!
Not only did I borrow the max I could to buy my flat, I also borrowed the deposit as a graduate loan from the same bank. The repayments were far less than my previous rent had been. It was easy to afford it. It seemed like a bit of a gamble at the time.
10 years later the flat is worth 3 times what I paid, and the total mortgage left to pay is only about 2/3rds my annual salary.
sometimes it works out - and one of those times would be now, when property is cheap, interest rates are low, and the economy is about rock bottom and only likely to go up over the next 25 years.
10 years later the flat is worth 3 times what I paid, and the total mortgage left to pay is only about 2/3rds my annual salary.
sometimes it works out - and one of those times would be now, when property is cheap, interest rates are low, and the economy is about rock bottom and only likely to go up over the next 25 years.
haworthlloyd1 said:
they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
Who in their right mind would lend money without first determining whether the borrower can afford to repay it?Honestly, some of these money lenders and their agents must have no brain.
...or there was no history of debt being borrowed and paid off successfully?
With no credit history you are an unknown quantity to a lender.
Is it possible to get a credit card from your bank, for example, use it for a bit of regular petrol and grocery shopping and pay it off in full monthly?
With no credit history you are an unknown quantity to a lender.
Is it possible to get a credit card from your bank, for example, use it for a bit of regular petrol and grocery shopping and pay it off in full monthly?
haworthlloyd1 said:
i am forever being asked, "I earn £25,000, how much can i borrow"
they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
This has been part of the fundamental failing of the system... the public assume that the lenders do the checks to make sure they can afford to pay...they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
Podie said:
haworthlloyd1 said:
i am forever being asked, "I earn £25,000, how much can i borrow"
they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
This has been part of the fundamental failing of the system... the public assume that the lenders do the checks to make sure they can afford to pay...they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
I'm not a massive fan of some of the big banks at the moment, but they are dty bound to handover the above information.......
scotal said:
Podie said:
haworthlloyd1 said:
i am forever being asked, "I earn £25,000, how much can i borrow"
they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
This has been part of the fundamental failing of the system... the public assume that the lenders do the checks to make sure they can afford to pay...they will just borrow the absolute maximum anyone will lend with NO consideration as to what they can actually afford on repayments.
I'm not a massive fan of some of the big banks at the moment, but they are dty bound to handover the above information.......
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