1 in 9 mortgage holder in NE

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Dan: wrote: »

That's their problem. I always make sure I can afford my mortgage on at least 8%, and anything under I consider a bonus.

Although and excellent way of looking at your finances, I believe many a homeowner believes that mortgage rates only start with a 5 or lower, and anything above this doesn't exist. If mortgage rates were at or go upto historical values, 100,000's of homeowners and BTL'rs would be on the verge of repossession or bankruptcy, that really says it all about the over valuation of houses that has got out of hand with lax lending and too cheap credit.

lostinrates

Mini_Bear wrote: »

Urgh this whole "prices will go back to normal" phrase really annoys me. 2007 peak prices were not "normal". 125% mortages, 6x salary mortgages were not "normal". neither is 0.5% base rates which is the only reason we are havin a sort of spring bounce. if base rates was around the 5% mark this crash would be utterly catastrophic.
incidently i know of several people who have made large credit purchases this month (new sofa, new car). they are clearly very confident of the economy. i wish i shared their positivity.

I'm seeing that too. Terrfyingly I know someone who's just lost their job and has used their small redundancy and some CC to make a luxury purchase, and is looking for full time work now...after puchase. I hope the majority of people are substantially more sensible!

Ingsy

Harry_Powell wrote: »

Is there any evidence that they are doing this, though? Or are they partying like it's 1999?

I'm doing it :beer:

Came out of a 5% fix with Nationwide in Feb, went onto their BMR, currently 2.5. Set up an overpayment so the same amount is leaving our account as it was before.

System

I already did it, and NOW I'm partying like it's 1999

StevieJ

Lotus-eater wrote: »

I expect if you want to remortgage it wouldn't be that good either.

I get the general feeling from the populas, that they think the worst is over and we can soon get back to normal, indeed many people haven't even noticed anything happened at all.

Then again I didn't notice anything happen in the 90's recession, didn't move house, did't lose my job and bought not quite at the top of the market. Tiny mortgage now though So my advice to those NE people is pay off what you can of your mortgage while rates are low and fix before they jump.

chucky

Harry_Powell wrote: »

Is there any evidence that they are doing this, though? Or are they partying like it's 1999?

yup - its happening and has been for quite a while.
probably VI though

Britons increased the equity in their homes at the fastest pace on record as the recession encouraged households to pay down existing mortgages rather than take out new ones.

http://www.bloomberg.com/apps/news?pid=20601102&sid=aIuqp9eC3FR8&refer=uk

Housing equity withdrawal, where home owners cash in on the increased value of their homes, has now reversed for nine months in a row.

http://newsvote.bbc.co.uk/2/hi/business/7976111.stm

mewbie_2

Don't quite understand how equity can be increased, while it's leeching out the back door through price drops. Not many can pay off mortgage faster than house drops in value.

One way of saving money would be to cancel that Sky subscription...

ad44downey

Lotus-eater wrote: »

1 in 9 mortgage holder in NE

Yes, thanks very much to Krusty and Phil,etc. Address your leters of complaint to Channel 4.

ess0two

ad44downey wrote: »

Yes, thanks very much to Krusty and Phil,etc. Address your leters of complaint to Channel 4.

2 t's in letters,like 2 in ti t.

Cannon_Fodder

http://www.bankofengland.co.uk/publications/quarterlybulletin/qb090203.pdf

"The emergence of interest-only (IO) mortgages since the mid-1990s is likely to have reduced the rate of mortgage principal repayment. While IO mortgages were non-existent in the run up to the housing downturn in the early 1990s, they accounted for up to 22% in 2006 of new loans and 24% in 2007."

...approaching a quarter of new loans were IO in 2007. Hadn't seen that figure before. So, 1 in 4 are/were not getting "automatic" negative equity reduction/protection, via repayment...

Well, that won't lead to *some* more problems with NE, affordability, etc than the last crash, will it?

"A loosening of credit conditions in the early part of 2000 led to the emergence of specialist lenders focusing on lending to adverse credit borrowers (those who have previously been in significant arrears on mortgage or unsecured debts, and/or who have had County Court Judgements, Bankruptcy Orders or Individual Voluntary Arrangements). This sector grew to around 3%–4% of the mortgage stock by the end of 2007. Adverse credit borrowers tend to have borrowed at higher LTV ratios."

...loosening credit conditions won't have pretty much consigned that 3%-4% to a re-mortgaging/affordability nightmare, either?

"A particularly important difference is that rising negative equity in 2008 and 2009 has been accompanied by a severe financial crisis characterised by losses suffered on structured credit investments and concerns over banks’ funding. That weakness in the banking system and associated lack of confidence suggests that rising negative equity is likely to have had a larger impact on credit availability and aggregate demand than it did in the 1990s."

cherry picked, naturally...!