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View Full Version : Lloyds withdraws all mortgages above 60%



Triz
05-04-2020, 11:08 AM
Well this is a bit crap -Was hoping to move out this year into a bigger and nicer house...

https://www.financialreporter.co.uk/mortgages/alifax-withdraws-all-mortgages-above-60-ltv.html?fbclid=IwAR1rHspvsb1M0LqN1aq3KdfVSyC26SUd gh-U6Oo0QLggyoF4AgWFxTqhlSI

Basically Lloyds and it's intermediary brands have withdrawn all mortgages above 60% - So instead of the previous (roughly) 10% deposit required to purchase a house, which was already a challenge for most of us... has now been increased to you needing a whooping 40% deposit in order to purchase a house!

Depending upon where you live obviously, a nice modest house here where I live (2 bed, terrance) would set you back about 140k - Now you'd need £56,000 in your bank (or in equity) in order to purchase a house!

Hopefully this doesn't last long! - If you're saving up for a mortgage, don't let it put you off, hopefully it'll all stabilize in a few months (I hope)

At present it's only Lloyds, however all banks are expected to follow suit.

FlyingJesus
05-04-2020, 11:22 AM
Assume it's temporary but 40% is insane, a tiny studio apartment here is 150k+ with any actual HOUSE being 250+ in the worst areas. Might possibly be able to buy a place by the time I'm 50... AND NO THAT ISN'T IN THREE YEARS

Triz
05-04-2020, 11:39 AM
Hopefully its temp, some are saying it's because there are a lot of people on furlough thus banks don't want to risk lending whilst peoples incomes are limited, plus the interest rates are so low at the moment.

That said, the criteria for furlough is different anyway, if you try to get out a mortgage whilst on furlough, they'll only accept your furlough income, not what you're actually on potentially 95% of the year. So wouldn't matter if someone is on furlough, as it isn't effecting remortgages, only new mortgages.

So in theory it wouldn't have mattered if they kept it the same 10%, as people would be stupid to try and get out a mortgage for 10% when they're on furlough, as they wouldn't be able to borrow as much

scottish
05-04-2020, 11:49 AM
A few others have done it too (Halifax, Barclays), I think it's because they're expecting a housing crash (all purchasing/selling has been pretty much halted) and have extremely reduced staff levels so it'll reduce the amount of new applications/work they have to deal with.

scottish
05-04-2020, 11:56 AM
probably also worth mentioning, over 60% typically requires valuations on the property (home report or standard valuation) which is currently not possible due to the outbreak and they're not essential workers.

60% LTV will be when they can use automatic valuation systems to minimise risk and not require any/minimal human input.

a lot of these places have shut down offshore sites/call centers and will have limited staff, and with this causing issues to income then they'll have even more calls asking for mortgage holidays etc so it makes sense.

after the pandemic and everyone is open again in a few months they'll likely lift this.

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