Interesting mortgage idea

[runner]

Wonder would this work here?

 

[JoeB]

I doubt it.

His product seems to be a mortgage where the balance owed is reduced if the house value drops. (There are similarities to 'no recourse' mortgages available in the US)

While the product is nice for the house buyer what incentive is there for the lenders? They will just charge more for the large risk they're taking. The lenders would be exposed to the property market, and corrupt politics etc.

There's also a problem with valuing houses... we have no house price database despite calls for decades and promises made and broken. So it's unworkable until there is a house price database,.. or professional valuers,..

 

[Sunny]

Wouldn't even work in the US.

 

[truthseeker]

There's also a problem with valuing houses... we have no house price database despite calls for decades and promises made and broken. So it's unworkable until there is a house price database,.. or professional valuers,..

I agree Joe. When I took out my mortgage (on a new build) my bank told me I needed a professional valuation done - they recommended someone that they had accepted valuations from in the past.

He came to the property, stood in the middle of the sitting room, took out his mobile phone and phoned the estate agents who were selling the property and asked them how much they would price one of them for. They named the price I was paying, he thanked them, hung up, charged me 150 euro and wrote on a sheet of headed paper: Valuation = xxx Euro and gave it to me to hand to the bank.

That was the extent of the 'professional' valuation.

 

[JoeB]

Personally I would have complained to the bank about that. If the bank want a valuation they should pay for it. If they're happy to pay a schoolchild to pick a figure then that's fine... but I wouldn't be happy at being asked to go along with that farce.

 

[truthseeker]

Personally I would have complained to the bank about that.

I did complain. I was told that I was welcome to get a mortgage elsewhere if I didnt want to go along with their procedures. I was young, naive, and excited about buying my first home so I let it go. Of course now I wish Id never gotten that mortgage - but thats a different story!!