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Homeowners with Trackers to face shock rise?

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Comments

  • dopester
    dopester Posts: 4,890 Forumite
    Hopefully in 50 or 100 years time, our descendants will be able to have a good laugh at us. This reality absolutely sucks. This paradigm is flawed.

    Hopefully it will change with new technological breakthroughs.... if the economy and business is allowed to be put before supporting house prices - but with supporting mechanisms (shelter, food, energy - the basics) for those affected during a longer transition.

    Come that time outstanding debt levels may not be seen in the same context as they are today. Money is only a means to an end.
    Money is a sign of poverty, meaning that money only has a function in a scarcity economy, and therefore its existence betrays a pre-abundant (poor) society.
  • dopester
    dopester Posts: 4,890 Forumite
    StevieJ wrote: »
    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 upicon7.gif
    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.

    You're right. However it is important that many home-owners who do have significant levels of mortgage debt, do care, and they do find out. Better to know sooner than to be caught out later with the realisation of what is happening.

    Rather than treating it as a higher level of disposable income to spend on themselves or waste in making expensive improvements to their home, I've tried to convince a relative to either pay-down their debt, or to save the extra money they now have sloshing about.
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    dopester wrote: »
    Hopefully in 50 or 100 years time, our descendants will be able to have a good laugh at us. This reality absolutely sucks. This paradigm is flawed.
    d.

    True you have to be careful about statements you make today that may bite you on the
    bum tomorrow e.g.

    http://img195.imageshack.us/img195/9581/18times.jpg
    :rotfl:
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • dopester
    dopester Posts: 4,890 Forumite
    Classic.:rotfl:

    Another funny thing about that banner is they obviously didn't expect to win any more league titles themselves in the meantime.
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    edited 17 May 2009 at 4:07AM
    dopester wrote: »
    You're right. However it is important that many home-owners who do have significant levels of mortgage debt, do care, and they do find out. Better to know sooner than to be caught out later with the realisation of what is happening.

    Rather than treating it as a higher level of disposable income to spend on themselves
    or waste in making expensive improvements to their home, I've tried to convince a relative to either pay-down their debt, or to save the extra money they now have sloshing about.


    Rather than treating it as a higher level of disposable income to spend on themselves

    To be honest I have never understood that, certainly never done it :eek: Oh once I had one of those secured 3 year car loans because the rate being charged was the same as my mortgage i.e. cheap (was that OK?)
    Good night sweet dreams icon7.gif
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • Degenerate
    Degenerate Posts: 2,166 Forumite
    Homeowners with Trackers to face shock rise...

    ...to SVR that is probably lower than their tracker rate of a year ago, and certainly much lower than they would have expected when they took out the deal.

    How will they cope?
  • Good god almighty, you do not have to be a whizz at economics to grasp that when your deal ends, be it a tracker or a fixed rate that if you can't secure another deal you will be stuck on the SVR at pretty much whatever rate the banks sees fit to place above base.

    1. People with mortgages are aware that interest rates go up and down.

    2. People with mortgages realise that we are in a recession and house prices are falling.

    The fact that everyone with a mortgage isn't going around weeping and tearing out their hair does not mean that they think their house hasn't fallen in price and they will have no problem remortgaging when their deal comes to an end. No, they're getting on with their lives because that's what people do. Running around panicking doesn't help anyone does it?

    Predicting the recession may have been the preserve of people who take an interest in economics. Your average 10 year old is aware that we're in the middle of one now and that house prices are falling. So I think most adults are too.

    I really don't see understand why most adults should be incapable of holding down a job, a relationship, managing the household bills (living a normal and functional life in other words) AND be completely unaware that we are in the middle of a recession. So if you have a job you never have the radio on and hear the news? You never talk to anyone? You never buy a newspaper?

    Face it you are no longer a member of some elite club that is uniquely in the know with some sort of moral duty to spread the word to the sheeple. Everyone knows now. They're getting on with their lives, maybe saving a bit, maybe not. I know it's a bit of anti climax for you all but please all these "omg what's going to happen, these people should be so frightened" "I know it's so frightening, they just don't know what's coming to them do they?!" type threads are becoming nothing more than a source of amusement frankly.
  • ....and I'm not on a tracker just to pre-empt a predictable response.

    Although if I was I would have been saving/paying more off my mortgage - you know like all these stupid mortgage holders have been doing over the last year in record numbers....
  • amcluesent
    amcluesent Posts: 9,425 Forumite
    It's the immediate cash call driven by the reduction in LTV on the new mortgages that'll sink home owners, not the resetting of the interest rate to SVR.

    Loads of peeps can find the incremental cash to pay 4% rather than 0.5%, it's not so easy to magic up £25K to £100K when the LTV drops from 95% to 75%.
  • hundredk
    hundredk Posts: 1,182 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    amcluesent wrote: »
    It's the immediate cash call driven by the reduction in LTV on the new mortgages that'll sink home owners, not the resetting of the interest rate to SVR.

    Loads of peeps can find the incremental cash to pay 4% rather than 0.5%, it's not so easy to magic up £25K to £100K when the LTV drops from 95% to 75%.

    This recession has a lot to do with people borrowing more than they could realistically afford and not worrying about paying back. 125% and 5-6x income mortgages were asking for trouble.

    Responsible borrowers should know the rate could go up as well as down and should plan for worst case of being unable to remortgage and reverting to SVR. Pretty obvious your home may be at risk if you don't keep up the payments so you know what you're in for to start with.

    Arguably true a FTB with 95% mortgage may have difficulty finding £25k in which case ride out the SVR a few years - as you say ppl should be able to find the incremental difference when the loan reverts to SVR.

    For those looking for £100k to get to 75% LTV, I'd say consider the consequences of a £400k+ mortgage at 95% LTV in the first place or perhaps have considered a property worth "just" £300k.
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