To wonder if banks are worse now?

[DragonMummy1418]

When my dad got his first mortgage 45 years ago, he got a mortgage for 110% of the property!

Your lucky to get a 95% mortgage now.
It's so much more difficult to buy a property now, you need to have thousands and thousands for a deposit and schools aren't teaching proper money management, there's no class for it.
My parents never taught me about money management either so I had to the learn the hard way... by making a lot of mistakes!

I’m not sure any of that is indicative of banks being the problem.

Realistically expecting someone before purchasing a house to be able to show they can save enough to produce some of the money is sensible (if not a massive pain for people struggling to save)

They certainly can’t be blamed for parents and to a lesser degree schools not teaching young people about finances. Infact many banks do offer education schemes schools can use

I just think it's really strict.
We've paid our rent without ever missing one payment for the last 8 years so I think if you can prove your in stable employment, earn enough to pay the mortgage and have a very good history of rent payments then 100% mortgage shouldn't be out of the running. 🤷‍♀️

Banks have to go by more stringent legislation that has been put in place post the market crash in 2008.

It has got nothing to do with schools or salaries or anything. It’s got a lot to do with people being allowed to self certify their salary well above their actual earnings, completely unsuitable properties being mortgaged to the hilt, and basically reckless lending on behalf of the banks (knowing they’d get the money back on repossession).

In the background it is the fault of the banks for only thinking about making money and not their customers, but you don’t seem to know much about it!

I agree with you. I don't know how people can afford to save both for a deposit and the actual move as well as pay the rent. If they've paid the rent (similar sum to mortgage) for a long time, I think they should be given 100% mortgage, whilst being reminded that if the property drops in value, they'll be in negative equity. It would only be suitable if someone intended to stay in that house for years.

I'm surprised your Dad got a 110% mortgage 45 years ago. I didn't think those became available till the mid 80s. Before then, it was normally 90-95% with the added twist that very often the mortgage lender value the property at less than the accepted offer, so it was 90 or 95% of the reduced valuation.

I do agree that there should be financial education in schools, for the kids whose parents either don't care to teach them or simply have no idea themselves.

But it'll never come from banks, because people getting into debt makes banks money. So there's no incentive for them to try and educate the next generation to avoid it, the banks would miss out on all of the interest on their loans, credit cards and overdrafts.

As a public good though I think it would be fantastic for there to be basic financial management taught in schools or even the first year of uni as an option. I got into a significant amount of debt early in life (£8k) because I simply had no understanding of how the debt spiral works, how when you pay some of your CC off you're only taking a percentage of the payment off the debt as a lot it swallowed by interest. I wish I'd know that debt sucks you in because all of your income goes on paying the minimum repayments, meaning you have to use more debt for essentials like food and fuel, so the debt gets larger as the interest goes on faster than you can clear it while you're not clearing any of the actual debt and you're adding to it because that £100 you have left after outgoings each month you could use for food now goes on your credit card or loan repayment.

I take full responsibility btw. I should have known at eighteen to research this stuff, it was normalised for me by every student being given an interest free overdraft that increased every year, I never knew of a single person not using the whole lot year by year, then a year after you graduate, suddenly you owe a few thousand, I took a loan to clear it which then meant I couldn't afford essentials as I was spending that on the loan so used the overdraft, then transferred onto a credit card, the limit kept on increasing and before I knew it I was 24 and bankrupt. Which has long term serious ramifications and means now at 30 I still can't rent without a guarantor!

So YANBU OP. YANBU at all.

In the old days mortgages were low in proportion to salary - my mum and dad bought a house for 21k with a 110 percent mortgage on a salary of 10k. They also scrimped and saved every penny to get their first house - no holidays, no coffees, sometimes no meals between breakfast and dinner. The whole system and culture is different now.

I agree with you. I don't know how people can afford to save both for a deposit and the actual move as well as pay the rent.

You need a high income. And a partner. It's largely out of reach for people on a low income or singles unless you get a wedge of cash from relatives or can live with them rent free for months, years on end.

I know someone will be along to say they managed it all alone, to rent and save simultaneously to afford a mortgage deposit on minimum wage. But I don't see how it's financially remotely possibly, I really don't.

I’m a banker and even before that I was savvy with my money. I would personally prefer to teach my kids how to manage their money myself.

I don't think it's fair to blame banks and schools for your problems!

OP I think you'd get more useful and thoughtful replies if you rewrote this thread to discuss whether money management should be taught in schools. Otherwise it'll just descend into lots of 'it's not the bank's fault you are shit with money' or 'it's a parent's job to teach their kids not the school' (which basically writes off the kids who from no fault of their own don't have parents who know anything about managing money),

Or rewriting to solely discuss mortgages and the changes over the years.

The conflation of both is gonna send this thread straight into hell