Homeowners with Trackers to face shock rise?

Gorgeous_George

There will be a lot of people who took a two year tracker in 2007 who will feel the pain as their deals come to an end. However, their new deals (if they qualify) will probably be cheaper than the deal that they had in 2007.

Sometimes, newspapers are desparate to sell papers.

£200K interest only mortgages have never been 'typical'.

GG

StevieJ

I must be on a gimme, BR + .95% until term, !!!!ed off that I paid it down to £300 :eek:

StevieJ

mvengemvenge wrote: »

It's frightening how unaware many are of the sh*t that's coming down the track.

Does that include you?

StevieJ

PasturesNew wrote: »

Many won't actually know what's happened. They took out their tracker, their mortgage is very low now, they're gloriously happy with all that extra cash.

However, your average man in the street won't be watching things closely ... they won't realise that they'll need a hefty deposit to get a new deal. They won't realise they probably can't get another tracker. They won't realise that their house price falling (of course, not theirs, their street's escaped it) will affect the access to any special prices or deals.

They'll stroll into the IFA's office with a jaunty smile, expecting to cut another deal ... and... BANG! The whole lot will suddenly be laid bare for them and the headlines from the last months/year or so will suddenly start to make some sense and they'll start reading.

It's a fact that there isn't time in your life to do what you do, do your job, run your house, keep on top of bills/maintenance, meet your commitments socially or otherwise... AND ... keep abreast of the nuances of the financial markets etc.

Then again, many will have a lot of equity in their property and will think it is Christmas again :beer:

dopester

StevieJ wrote: »

Then again, many will have a lot of equity in their property and will think it is Christmas again :beer:

Lots of equity, even owning outright, doesn't stop the value of it from falling.

Values can just disappear.

The million pound house that an owner might have thought they owned at a market peak, can quite rapidly become worth £800,000, or £700,000, or £500,000 or less. The value of it just disappears. You see, they never really had a million pounds; all they had was a house.

The idea that it had a certain financial value was in his head and the heads of others who agreed. When the point of agreement changed, so did the value. !!!!!!! Gone in a flash of aggregated neurons. This is exactly what happens to most investment assets in a period of deflation.

hundredk

Shame for those who perceived a property was worth £1m and purchased at that price. It is not reasonable to expect a £1m property owner to have considerable equity before they buy - enough to cover the drop and still be able to remortgage with reasonable LTV.

It's not like FTB who needed high LTV mortgage just to get on the ladder.

pickles110564

PasturesNew wrote: »

Many won't actually know what's happened. They took out their tracker, their mortgage is very low now, they're gloriously happy with all that extra cash.

However, your average man in the street won't be watching things closely ... they won't realise that they'll need a hefty deposit to get a new deal. They won't realise they probably can't get another tracker. They won't realise that their house price falling (of course, not theirs, their street's escaped it) will affect the access to any special prices or deals.

They'll stroll into the IFA's office with a jaunty smile, expecting to cut another deal ... and... BANG! The whole lot will suddenly be laid bare for them and the headlines from the last months/year or so will suddenly start to make some sense and they'll start reading.

It's a fact that there isn't time in your life to do what you do, do your job, run your house, keep on top of bills/maintenance, meet your commitments socially or otherwise... AND ... keep abreast of the nuances of the financial markets etc.

Unless you have several life trackers with CBS, ROFL at PN

StevieJ

dopester wrote: »

Lots of equity, even owning outright, doesn't stop the value of it from falling.

Values can just disappear.

Homeowners with Trackers to face shock rise?

Stick with the topic Dopester

dopester

StevieJ wrote: »

Homeowners with Trackers to face shock rise?

Stick with the topic Dopester

Ok. Existing mortgage borrowers aren't going to be met which any big-shock in repayments. Not really. Come on.... 3.5%. That has to be considered a low rate by any historical measure.

Their rates could shoot up from 0% to as much as 3.5% if they default on to their lender’s standard variable rate (SVR).

I'm just pointing out that interest rates are low, and repayments low for existing mortgage holders, because the values are crashing at a much faster rate. Every 6 or 12 months, that is increasingly evident for all home-owners, even those who own outright.

StevieJ

dopester wrote: »

Ok. Existing mortgage borrowers aren't going to be met which any big-shock in repayments. Not really. Come on.... 3.5%. That has to be considered a low rate by any historical measure.

I'm just pointing out that interest rates are low, and repayments low for existing mortgage holders, because the values are crashing at a much faster rate. Every 6 or 12 months, that is increasingly evident for all home-owners, even those who own outright.

Dopester, most don't care or even know, but they do know that their mortgage costs have reduced or at most stayed the same. You must remember the STRers fav phrase a year or so ago, wait tll the 2 year fixed rates finish and the rates have gone up
Surely you realise that if people buy a property and live there (or move to the equiv) until they cease to exist, the property value is totally irrelevant.