What did IFG mean about 80% mortgages?

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LDFerguson

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Gary Owens of IFG mortgage brokers was recently quoted...

"FIRST-TIME BUYERS are being asked to provide 20 per cent of the price of a house when applying for new mortgages, according to IFG, which owns the State's largest network of mortgage brokers.

Gary Owens, head of IFG Group's Irish operations, said this time last year first-time buyers were being offered mortgages at loan-to-value ratios up to the full value of the property but that offers for first-time buyers have since fallen to around 80 per cent of the value of the property."

Quote cut from [broken link removed].

I'm confused. I'm not aware of any lender who has capped loans at 80%. Yes, most have stopped offering 100%, but they've only cut back to 92%.

Anyone know what this comment was referring to?
 
Maybe he's just trying to make people think it is hard to get more than 80% - so that when his firm "suddenly" come up with a 92% offer clients think they are wonderful?
 
Yes, my cynical alter ego thought along these lines. A similar train of thought would suggest that it's generalised scare-mongering in an attempt to drum up business. If people start believing that they'll have to pony up a 20% deposit soon, they might rush to grab a 92% mortgage now.

On the other hand, with criteria becoming progressively stricter, maybe he meant that their experience is that approvals are only coming in at around 80% of what the clients wanted to proceed.

Or maybe he knows something about future lending policies that the rest of us don't? :confused:
 
Personally I believe this is a good thing. Remember the auld days when people actually saved for a deposit?

80% LTV will give you a lower rate of interest. While I am cynical as the rest I believe this tactic is actually to secure business in terms of not going under by taking on less risk.

We already see Bank Of Ireland not issuing any new mortgages.
 
LDFerguson said:
Gary Owens of IFG mortgage brokers was recently quoted...

"FIRST-TIME BUYERS are being asked to provide 20 per cent of the price of a house when applying for new mortgages, according to IFG, which owns the State's largest network of mortgage brokers.

Gary Owens, head of IFG Group's Irish operations, said this time last year first-time buyers were being offered mortgages at loan-to-value ratios up to the full value of the property but that offers for first-time buyers have since fallen to around 80 per cent of the value of the property."
Click to expand...

No mention of this on the relevant section of the [broken link removed], up to 92% available according to it.
 
slinky said:
We already see Bank Of Ireland not issuing any new mortgages.
Click to expand...

Wow, that's the first I've heard of that. Not a mention of it on the [broken link removed] either. Can you imagine going to the bother of filling in the online application form only to find that they're not doing any new mortgages.
 
BOI are only not accepting new applications in the UK, Ive had 3 new mortgage applications approved with them in the last week
 
In addition, Bank of Ireland have only stopped taking on new applications in the UK on a temporary basis as they had been swamped with them in the UK and couln't keep up. See [broken link removed].
 
IFG are a broker network, not a lender, they cannot decide what % of loans are the banks are giving out to FTB or anyone else for that matter.
 
In addition, Bank of Ireland have only stopped taking on new applications in the UK on a temporary basis as they had been swamped with them in the UK and couln't keep up. See [broken link removed].
Click to expand...

Am I being too cynical in thinking that BOI are not being fully honest here? The concept of a bank pulling a product range, even temporarily, because of too much business in the current environment strikes me as somewhat strange. Surely they should be grabbing all the business they can get (subject to quality control of their mortgage customers, of course, i.e. making sure they can actually make the stress-tested repayments)
 
McGrath said:
Am I being too cynical in thinking that BOI are not being fully honest here? The concept of a bank pulling a product range, even temporarily, because of too much business in the current environment strikes me as somewhat strange. Surely they should be grabbing all the business they can get (subject to quality control of their mortgage customers, of course, i.e. making sure they can actually make the stress-tested repayments)
Click to expand...

I have no insider knowledge. However, I know that most banks operate funding in tranches, e.g. they have a tranche of money which they themselves have borrowed at X% and can afford to lend out profitably at Y%. Under normal trading conditions, it would be easy to project how long such a tranche of money will last for. If they are receiving exceptional volumes of new applications, which would not yet all be on their systems to account for, they may have unwittingly taken in applications to a total value of more than their current tranche of money to back them. In the current climate, their next tranche of money may come at a higher cost.

So it would strike me as feasible that they would need to process all current applications before taking on new ones and that the new ones might need to be re-priced.

However, this may or may not be the true reason. I don't know.
 
You are right not to trust what the banks say. All will become clear in the coming months I am sure.
 
Have no idea! I am a ftb and only just received mortgage approval at 95% from EBS. They were very strict on it only being 95% and wouldnt give me a percentage over that but never mentioned 80% infact i have never even heard of this and believe me in the last year i have spoken to many many brokers, mortgage advisors and estate agents.
 
I am at loan offer stage wtth BOSI, i had thought all along we were getting 95% turns out the are only offering 90% LTV to us now. Half of me is annoyed while on the other hand i know its better in the long run
 
With the way other lenders in UK are pulling deals and products all over the shop, those that are taking apps such as Bristol & West (BOI) are indeed swamped. I guess they are taking the best and rejecting the rest. Would be a different approach to what was being done up to July.
 
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