50% of Northern Rock borrowers from 2007 are in negative equity

lethal0r

ive gone for my own headline to suit the tendencies of this particular forum.

http://news.bbc.co.uk/1/hi/business/7952923.stm

check out the 'ROCK MORTGAGE BREAK-DOWN' box halfway down the page.

50% of ALL Northern Rock's mortgages will be in negative equity if prices fall 10% this year.

apologies if previously posted.

zappahey

Your subject is misleading as the 50% figure is conjecture. It may well prove to be accurate but, today, it is not accurate to say that 50% are in negative equity.

GDB2222

The BBC says this of NR's mortgages:

33% borrowed more than 100% of house value
10% borrowed 95%-100% of house value
7% borrowed 90-95% of house value

That's 50% in total, all of which must be in NE by now, surely, as house prices are down well over 10% already?

amcluesent

NR borrowers have done well. They have their own house (and plasma TV/4*4), interest rates are tiny so they can service the payments and inflation will quickly erode the real debt.

That's a whole let better then staying renting. IMHO.

Kenny4315

Did Mr Clown ever work with Laurel & Hardy...... because yet again it appears that ...it's another fine mess that he got us into.

Not sure but current inflation eroding mortgage debt quickly, we're potentially close to deflation, and once inflation starts going up so will interest rates.

lethal0r

zappahey wrote: »

Your subject is misleading as the 50% figure is conjecture. It may well prove to be accurate but, today, it is not accurate to say that 50% are in negative equity.

Prices are already down 20% since 2007. Fact. 50% of customers had 10% equity or less in 2007. Fact. if anything its MORE than 50%. Wheres the conjecture?

zappahey

lethal0r wrote: »

Prices are already down 20% since 2007. Fact. 50% of customers had 10% equity or less in 2007. Fact. if anything its MORE than 50%. Wheres the conjecture?

Make your mind up.

In your original post you said:

50% of ALL Northern Rock's mortgages will be in negative equity if prices fall 10% this year.

Now you say it is fact that 50% are in negative equity now.

JonnyBravo

lethal0r wrote: »

Prices are already down 20% since 2007. Fact. 50% of customers had 10% equity or less in 2007. Fact. if anything its MORE than 50%. Wheres the conjecture?

You don't know the spread of when exactly the mortgages were taken out.
You don't know where these mortgages are. Property doesn't all drop at the national rate.
You don't know the payment history of these people since taking on their debt.

Do I think it's at 50%? Yes, probably. Or more, like you say. Does the report state that as a fact? No. Fact.

lynzpower

Does anyone else see the irony of the government criticising itself?

mitchaa

GDB2222 wrote: »

The BBC says this of NR's mortgages:

33% borrowed more than 100% of house value
10% borrowed 95%-100% of house value
7% borrowed 90-95% of house value

That's 50% in total, all of which must be in NE by now, surely, as house prices are down well over 10% already?

What if all those that borrowed lived in Aberdeenshire?
What if all those that borrowed have been overpaying their mortgages due to low tracker rates. What about the 2yrs worth of capital payments that has been chipping away at the original loan?
What if they bought the house for under market value, or added improvements to it to increase its value.

Lots of what if's, i think it's stupid to assume though;)

What harm is negative equity to anyone anyway As long as they have an income and can pay the mortgage, then what is the fuss with N.E?

lethal0r

I was waiting for someone to start bangin on about local prices. oh and stop with the 'fact' semantics - you know what I call semantics? WA.NK

Its right just accept it and move on.