You are reading a single comment by @NickCJ and its replies.
Click here to read the full conversation.
-
It’s mental, but in 2009 there were plenty of folk who were paying variable rate who couldn’t remortgage on to a lower rate even with the same lender because they in theory couldn’t afford it, despite the fact it would bring payments down.
These are the same folk that had l̶i̶e̶d̶ ̶a̶b̶o̶u̶t̶ self-certified their income, right?
NickCJ-
No. It could easily be change in circumstances such as partner being out of work or divorce or increased living costs (oldies moving in)... there's a lot of reasons people can't afford things and it doesn't have to be their fault.
-
Or the price drops had left them in negative equity so they couldn't remortgage. Happened to lots of people outside London.
Velocio
aggi
As well as @Velocio ‘s good advice you also need to watch lending multiples - as the % loan to value rises the amount lenders will give you against your earnings drops.
It can be a real issue for people who, say, borrowed 5x earnings at 80% LTV, house prices drop and they’re then borrowing at 90% LTV and no one will lend them 5x earnings any more so they have no option to stay on the standard variable rate.
It’s mental, but in 2009 there were plenty of folk who were paying variable rate who couldn’t remortgage on to a lower rate even with the same lender because they in theory couldn’t afford it, despite the fact it would bring payments down.