Equity 'going back into property'

IveSeenTheLight

GracieP wrote: »

Have they got they message or do they attempt to MEW but discover upon valuation that they don't actually have any equity left to release?

If the equity withdrawel figures are negative, that means that money is being put into equity, not taken out

In 2008, I put almost £20k in overpayments into my mortgages.
discussing with Mrs ISTL at the moment about puting another £12k in, in January.

Of course, there is alsways the option not to overpay so much and build up a rapid deposit in case another good oppertunistic property was to become available.

IveSeenTheLight

mewbie wrote: »

I'm assuming homeowners are shovelling cash / equity into their properties, while the crash leeches that equity away through the back door. So, it's slightly misleading. Yes they are not borrowing so much, and are paying debt back. But the property is worth less month on month.

Can it be paid back faster than it loses value thus retaining a reasonable equity percentage? Dunno.

200k property. Loses 1% month. Equals 2k. That's a fair amount to pay back in capital terms.

I don't know who these people are anyway. They obviously haven't got the Brown message. Spend for Britain.

{ISTL Holds hands up}
Me, Me, Me, I have been for quite a while rapidly repaying my mortgage debts.
As the interest rate lowered I managed to negotiate that the monthly payments stay the same, without impacting my pre ERP payment allowance.

Initially, the lenders tried to say that if I maintained my monthly payments, the extra would be deducted from my overpayment allowance. I debated back to them that they were re-calculating my monthly payment and as such the re-calculation on the new outstanding amount would in effect be re-setting my amortization period and thus also re-setting the amount I can over pay by.
I then debated I could in effect overpay even more.

They seemed to agree with me as they have allowed me to maintain my monthly payments without affecting my overpayment allowance before ERP.

that said, I'm not afraid of ERP as it is less than the interest I am paying on the debt and therefore money saving to invoke.

Gorgeous_George

I'm sick of the word 'equity'. It grinds on me. The only people who should use the word are actors and actresses.

Is there a better word(s) to describe potential money (equity) or unsecured debt (negative equity)?

Putting money into 'equity' = paying off one's debt. Remortgaging = taking on more secured.

Finally, when people say they are remortgaging to pay for home improvements I ask what was their most frivelous expenditure? Without that the home improvements could have been paid for with savings.

GG

amcluesent

>I ask what was their most frivelous expenditure?<

I don't regard my 200HP turbo-charged sports-coupe as frivolous. It's essential...

IveSeenTheLight

Gorgeous_George wrote: »

I'm sick of the word 'equity'. It grinds on me. The only people who should use the word are actors and actresses.

Is there a better word(s) to describe potential money (equity) or unsecured debt (negative equity)?

Putting money into 'equity' = paying off one's debt. Remortgaging = taking on more secured.

Finally, when people say they are remortgaging to pay for home improvements I ask what was their most frivelous expenditure? Without that the home improvements could have been paid for with savings.

GG

On a 25 year contract with a set monthly payback, what do you call the additional payments?

P.S. Re-mortgaging does not mean you are taking on more secured debt. You could be taking on less debt on a shorter period

mewbie_2

IveSeenTheLight wrote: »

They seemed to agree with me...

I suspect they just gave up arguing with you. I can see their point.

Generali

Gorgeous_George wrote: »

I'm sick of the word 'equity'. It grinds on me. The only people who should use the word are actors and actresses.

Is there a better word(s) to describe potential money (equity) or unsecured debt (negative equity)?

Putting money into 'equity' = paying off one's debt. Remortgaging = taking on more secured.

Finally, when people say they are remortgaging to pay for home improvements I ask what was their most frivelous expenditure? Without that the home improvements could have been paid for with savings.

GG

Well equity is what it is. You can change the word but the amount of an asset that is owned without debt secured against it is a concept that remains unchanged.

You could change the word 'Equity' to 'Sellafield' if you like but it's no different to changing the name of Windscale to Sellafield.

The problem isn't the concept of equity so much as the twin problems of people confusing unrealised gains in asset prices with cash and borrowing against increased asset valuations with income.

IveSeenTheLight

mewbie wrote: »

I suspect they just gave up arguing with you. I can see their point.

:rotfl: Well as long as it's money in my pocket I'm saving and not giving to them then I don't care if they gave up.:rotfl:

really, what organisation who make money on interest on lent money, would allow their returns to be less because they just "gave up".
They would insist I couldn't do what I wanted if I did not have a valid point.

Some institutions thrive on people not knowing the small print or understanding the terms you sign up to.

mewbie_2

IveSeenTheLight wrote: »

stuff

It was a compliment.

IveSeenTheLight

mewbie wrote: »

It was a compliment.

Thanks,

I really would recommend everyone takes the time to read the small print on any contracts they have, try to understand the product and the effect on any changes.

There is a host of benefits that can be obtained if you know what you are talking about

I once had a Contracts Manager at an Insurance company warn me of a 75% clause for the type of damage, inferring I was only going going to get 75% of the claimed amount.
I read the contract thoroughly and while there was a 75% clause, it was on the total insured amount, not the total claimed amount.
If I had accepted what he had said, I would have missed out on thousands of pounds. As it was, I was informed and advised them the correct interpretation.

I also once had a sump plug that had become galled. The car service manager tried to insist it would cost me a whole new sump. I assured him that the car was only serviced by their company and the damage must have been caused by them. the manager tried to tell me that these things just happen and he had 22 years of experience and unfortunately it was something I would have to pay for.
Long story short, after explaining that I knew about threads, cross threading, lubrication of threads, over torquing etcand having to take it up with his boss, the car was repaired fully at their costs.
How many people would have just accepted the few hundred pound costs?

Do not assume that people in certain positions are more knowledgable than you are. Make sure you fully understand and agree for yourself