Mortgages delayed 2 years - let's wait and see?

Kez100

Generali wrote: »

If they can repay their negative equity and the rolled up interest they have no need for the scheme!

This is where quotes of quotes lose context. The quote I was replying to was talking of people moving for jobs and how this system will make that *worse* and they should just sell earlier and take the hit and move to new job. I cannot see this option will make it worse as no one has to go with it if they can buy themselves out of NE - it will be a stopgap for people caught between a rock and a hard place.

Also the implication made to simply sell and move just isn't an option in today's market anyway. You cannot sell in NE unless you can repay the difference and how many of these people are in that position?

As others say, I think this is also a good strategy to stop worries by people who may never need to use it. Just to know it is there as an option if the worst occurs.

bubblesmoney

why should FTBs who dont own a home and have been prudent and saving for years for a deposit and not availing any benefits ever, have to subsidise the foolish ventures of other people who didnt take adequate precautions regarding their finances and jumped in and bought a place they couldnt afford and also didnt have any safety net for bad times.

all this does is to support the bums who lived beyond their means. not surprised that brown feels some solidarity with this group of chumps because his govt has lead the way in living beyond the means by taking loans in good times and blown all the savings and now planning on taking more loans. isnt it time the world caught on and stopped buying the uk govt bonds. looks like that is happening already from what i read from a few links posted on this board recently.

people need to save in the good times and live within their means in the good and bad times. if something as basic as that doesnt enter peoples thick skulls then they get to become the UKs chancellor for a decade and then get promoted to PM and then the chimps that follow him claim he is a world leader because of his economic wizardry.:mad:

silvercar

From January, anyone on income based benefits will see the interest on their mortgage paid upto a max of 200k's worth after 3 months.

Accepting that people don't get repo'd within 3 months, what does this new scheme do?

Only people it will effect will be those with mortgages over 200k, so they can defer the interest.

Are there really that many people who have been given mortgages over 200k that won't have any savings? Chances are most people with large mortgages will have had a deposit, so won't be in negative equity and would have had the option of selling.

vivatifosi

bubblesmoney wrote: »

why should FTBs who dont own a home and have been prudent and saving for years for a deposit and not availing any benefits ever, have to subsidise the foolish ventures of other people who didnt take adequate precautions regarding their finances and jumped in and bought a place they couldnt afford and also didnt have any safety net for bad times.

Life isn't always as straightforward as that. I don't like to discuss my own circumstances and certainly didn't come here for tea and sympathy (I think there are better boards for that though I don't go there either), but I could potentially lose my house if my husband loses his job and we use all of his redundancy and any investments we have. I'm currently bringing in about 30% of what I would have done in better times through my small business. I have been rebuilding the business up having had to have several months off to be treated for cancer and did not try to claim any benefits, preferring instead to live off savings.

Now I have no savings, just investments, the value of which have dropped like a stone. I could not get mortgage protection insurance because of the cancer (for which I have the all clear), which incidentally I only found out about while the mortgage and the purchase of the house were going through. We have a low LTV because we have always chosen not to over-extend ourselves and be prudent and our house is modest. Our previous house had an LTV of 20% and we were only at 40% when we bought this one (that went down and is now at about 40% again). I wasn't foolish, and used my safety net, but sometimes life deals you a curved ball you can't see coming.

It should be the case that I still won't need to use this fund even if my DH loses his job because we will get some sort of redundancy payout (and we are the type of peeople to live on baked beans on toast and hang on to money for as long as possible), but its nice to think that there could be a safety net if I need it, very much like one of the two people Silvercar mentioned. The best case scenario, which is still entirely possible, is that the redundancies coming to his workplace don't touch his department.

However, back to my earlier point and in spite of the above, I'm still very cynical of Brown and what this all really means once the detail is delivered. I'm sure that there will be a way somehow of saying because you don't have dependents/do have savings or investments/have contributed to a pension or anything else he comes up with will mean I'm inelligible...

RobertoMoir

purch wrote: »

It is very poor underwriting indeed if you expect to pay 100% of what is underwritten.

Hopefully the actual cost to the underwriter (i.e. all of us) will be minimal as only a few of the mortgages will default after the 2 years.

Well hopefully, but you can't be too optimistic when planning this stuff. There must be a large amount of money allocated to supporting this scheme somewhere, even if its money that hasn't yet "been printed", so to speak.

purch wrote: »

I can't see how this will help in the longer run, as the deferral will only lead to an eventual increase of the Debt owed.....basically pushing the problem back 2 years.

Fair one. I don't think it's intended to help in the long term in the slightest. I think this plan is designed to buy off people with poor maths skills and/or an inability to see things unless they're right under their nose, and only for as long as it takes to call an election.

To be fair, I suppose you could apply my last paragraph to everything that comes out of the mouth of any politician, but this one does seem a little more cynical and blatant than most. From where I'm sitting, either the people who thought of it are complete idiots or they think the rest of us are, and I'm not sure I like either one of those conclusions very much.

Lotus-eater

RobertoMoir wrote: »

Fair one. I don't think it's intended to help in the long term in the slightest. I think this plan is designed to buy off people with poor maths skills and/or an inability to see things unless they're right under their nose, and only for as long as it takes to call an election.

To be fair, I suppose you could apply my last paragraph to everything that comes out of the mouth of any politician, but this one does seem a little more cynical and blatant than most. From where I'm sitting, either the people who thought of it are complete idiots or they think the rest of us are, and I'm not sure I like either one of those conclusions very much.

Wish I had written that

IveSeenTheLight

dopester wrote: »

Well the person I was referring to didn't seem to have negative equity or debt issues. He/she came asking questions about moving to the London area (with a job offer in Bloomsbury), and was focussed on the costs of renting/buying in the surrounding area. Could she afford it was most in his/her mind.

The market intervention by Labour and Brown is more likely to keep house prices, and rents higher (for a little bit) than they should be, as debt sufferers don't have to sell/move. Given a natural course without intervention, the prices could drop and so allow him/her to move in to the new area, and take up a job to help the economy.. pay more in taxes, help recovery, ect ect.

surely the position would still be available / filled given that the person in your scenario chose not to take the position.

When the position is filled then that position would be helping the economy... pay their taxes, help recovery etc.

The world doesn't grind to a halt because of the decision the person in your scenario might take.

IveSeenTheLight

purch wrote: »

I can't see how this will help in the longer run, as the deferral will only lead to an eventual increase of the Debt owed.....basically pushing the problem back 2 years.

are you assuming that peoples situation won't change in that two years?

purch

are you assuming that peoples situation won't change in that two years?

No, but I am assuming that the situation in the general economy, and especially the housing market won't have improved hugely in that time span.

WTF?_2

dopester wrote: »

To be more specific:

(click the for full thread/post)



Yet people here are celebrating at the fact mobility is reduced for those with opportunity.. especially those will skills and in know-how that is still in demand. You'd rather have people remain in their houses, even though they can't afford them, and keep prices higher than they should be... rather than letting prices adjust and allowing opportunity to those with skills in demand.

For all you know.. this person might have the skills and creativity to help the next big company in the UK, and generate jobs and opportunity for others. Yet most likely they won't move because they can't afford the area - made worse by Gordy's plan. Forget "out with the old, in with the new"... but keep the old happy and comfortable and lock out the new from opportunity.

Pulling up the ladder behind them has long been the HPI mantra.

That's how it worked in the boom, that's what the government is facilitating in the bust.

The latest interest payment relief programme is just going to make lenders more hesitant to give new loans - which will hit FTBs.