Negative Equity

ILW

Joeskeppi wrote: »

At the time all the banks had pretty much identical rates and were falling over themselves to lend me money, I may as well have picked Abbey due to the fact they were first alphabetically.

That explains why it's not your fault then.

System

beecher wrote: »

There's a lot of anger about, and I suppose Gordon Brown blaming everyone bar himself is part of the problem here. Everyone's looking for someone to blame, but calling Abbey 'scum' for not offering a deal to someone who has an interest only mortgage with a high LTV is eyeopening to say the least. You're a bad risk and I for one want banks to go back to traditional banking which means not giving deals to people with more than 90% LTV.

I'm not a bad risk at all, 2.5x lending on a mortgage is hardly "risky". I save £500 a month towards paying off my mortgage when the fix deal ends but even if I pay off that lump sum I'll only end up losing it all when rates go up and I get my houise taken back because I can't afford Abbeys ludicrous rates.

It's a stupid system, if I was offered a sensible deal I'd be less of a risk anyway.

beecher

Joeskeppi wrote: »

At the time all the banks had pretty much identical rates and were falling over themselves to lend me money, I may as well have picked Abbey due to the fact they were first alphabetically.

It was up to you to judge the risk of taking out an interest only mortgage at what proved to be the top of the market. Every pyramid scheme has its winners and losers, depending on when you buy into it and how much you borrow. With hindsight you made a bad decision, but I fail to see the point in directing your anger towards the banks for this.

Dan_1976

We are all to blame, we got greedy and brought more expensive because rates allowed it, this pushed property prices up. Things should of gone pop a bit earlier, 2001-2003ish If I remember but we pushed through it with higher income multiples and and 100% lending with 5.6 times salary!

You have to take some blame MD however I do understand why you are angry, I am giving my house back. I dont have a huge mortgage but the market conditions plud only being self employed for a few years meant I had to get a proper job and a pay cut!

Do what you can while rates are low. Then if they go up you will owe less and you could go to interest only for a bit to ride out higher rates.

Did you look at the payment on the SVR at the time you took the mortgage? They would have been higher.

beecher

Joeskeppi wrote: »

I'm not a bad risk at all.

You're in negative equity and house prices are still falling. Your loan is larger than your asset - of course you're a bad risk.

System

beecher wrote: »

but I fail to see the point in directing your anger towards the banks for this.

Really?

My anger is the difference between lenders deals, and how it's no fault of my own that I'm stuck with a lender that has set it's remortgage deals at rates they know no one will take, while Mr XD who just so happened to choose Natwest 2 years ago is totally comfortable.

Is that really that hard to digest?

Dan_1976

Joeskeppi can you start your own thread?

System

Dan_1976 wrote: »

Joeskeppi can you start your own thread?

No, I'm done.

beecher

Joeskeppi wrote: »

Really?

My anger is the difference between lenders deals, and how it's no fault of my own that I'm stuck with a lender that has set it's remortgage deals at rates they know no one will take, while Mr XD who just so happened to choose Natwest 2 years ago is totally comfortable.

Is that really that hard to digest?

Not at all, but I find it a bit silly. I'm with Halifax and dont' get that much better a deal than someone in negative equity, even though my LTV is less than 30%. It is swings and roundabouts. As Dan says, if you look at the deal you signed up to the SVR would've been much higher - when I got my first mortgage I was warned about coping with interest rates in double fingers. Didn't you realise that this was more than possible when you bought at the top of the market?

System

No, you're still not understanding, it's a lot simpler than all that.

Mr A gets a 90% interest only mortgage in 2007 with natwest.
Mr B gets a 90% interest only mortgage in 2007 with Abbey

Mr A is in a brilliant situation.
Mr B is f*cked.

Mr B is not at fault as he had no idea one lender would be so much worse in 2 years time.

This is not fair, and he has a right to feel miffed.