Nurse wins reprieve over repossession.

HammerSmashedFace

Read through some of this article and apart from the fact that she borrowed an extra 30k to pay debts (silly bint), what I found astonishing is she was paying 50% of her income to service a mortgage at a mere 6%. That says nothing of the fact that at a fairly reasonable (in historic terms) 9.7% ( I was paying 7.7% in 1996 and that was considered a good deal back then), she would have been paying 80% of her above average earnings to service a mortgage on a terraced house.

Bola has been a practice nurse for more than 20 years and has never had any difficulties with debt. In July 2006 she switched from her lender, Abbey, and increased her £117,000 mortgage to £147,000, partly to clear debts and partly to fund a drop-in centre for the elderly and ill that she wanted to set up.


Her mortgage broker, now out of business, failed to explain how the new Rooftop mortgage deal, which offered a fixed rate for two years, would work.
For two years Bola, in her 50s, paid £900 a month, a rate of 6%. But from July 2008 that leapt to 9.7%, pushing monthly payments up to £1,500. This represented more than 80% of her net monthly income and was unaffordable.

Just shows what is waiting on the horizon when rates rise.

http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=496751&in_page_id=8&ct=5

Mr.Brown_4

"In July 2006 she switched from her lender, Abbey, and increased her £117,000 mortgage to £147,000, "

Oh, how that equity profit must have been tempting. 30k? Well it was peanuts really wasn't it? Debt was easy, ever rising house prices meant a source of 'income' for some. It's going to be bad enough having less disposable income in the coming years (taxation) without the idea of having built a mountain of debt.

Feel free to thank this Pickles, I know it is pretty close to your situation.

wageslave

What is almost as scarey is no one seems to know who owns companies like Rooftop anymore.

What percentage of people have mortgages with sub-prime lenders?

HammerSmashedFace

wageslave wrote: »

What is almost as scarey is no one seems to know who owns companies like Rooftop anymore.

What percentage of people have mortgages with sub-prime lenders?

I don't think it matters at this time as the government through the banks hold a gun to these lenders heads telling them not to repo. Of course like everything else at the moment it is all temporary, like a massive house of cards that has been built on a breezeless summers day, mightily impressive, but they ignored the weather forecast for tomorrow, which brings storm force winds.

chucky

wageslave wrote: »

What is almost as scarey is no one seems to know who owns companies like Rooftop anymore.

What percentage of people have mortgages with sub-prime lenders?

at peak it was around 15%-20%. what is classed as UK sub-prime is arguable though - from high mortgage rates, to high multiples. UK sub-prime is usually classed by the type of lender which is a bit strange.

the US has 30% of sub-prime which is mortgages without anything to back it up really.

wageslave

HammerSmashedFace wrote: »

I don't think it matters at this time as the government through the banks hold a gun to these lenders heads telling them not to repo. Of course like everything else at the moment it is all temporary, like a massive house of cards that has been built on a breezeless summers day, mightily impressive, but they ignored the weather forecast for tomorrow, which brings storm force winds.

Couldn't agree more.

Irregardless of who wins the election, the minute the new government takes office, repossessions are going to start rising in earnest.

EDIT It may not matter who owns the sub-prime companies just now but at some, not too distant point, it is going to matter very much.

Thrugelmir

This case has more to do with unfair charges and the way she was treated than her inability to pay the mortgage.

Unfortunately she'll most likely lose her house in the end.

nearlynew

Just a typical debt-junkie, living beyond her means as a result of high house prices and loose lending.

There are 100 of thousands of people just like her out there who thought that debt was wealth and are now learning their lesson.

HammerSmashedFace

nearlynew wrote: »

Just a typical debt-junkie, living beyond her means as a result of high house prices and loose lending.

There are 100 of thousands of people just like her out there who thought that debt was wealth and are now learning their lesson.

Sometimes the truth hurts, this is the truth though.

carolt

Not totally fair - she borrowed money partly to set up a "drop-in centre for the elderly and ill" - why she did this out of her own cash is anyone's idea, but it seems unfair to blame her for it.

She's a victim of the scams that said it was good to remortgage, that property prices only ever went up, that as a homeowner, she would be 'safe', come what may.

Some serious re-education needs to go on, so that people learn that borrowing against the value of your home puts it at risk - like the health warnings on cigarettes, only wealth warnings.

A little line at the bottom of an agreement is not enough.

They need it in bold, at the top, in a huge font - get the message home.

Gorgeous_George

HammerSmashedFace wrote: »

That says nothing of the fact that at a fairly reasonable (in historic terms) 9.7% ( I was paying 7.7% in 1996 and that was considered a good deal back then)

My mortgage in 1985 was 16.5% but there were two key differences to today's rates.

1. I received MIRAS - effectiively a third off the rate so I only really paid 11%

2. The house that I bought was only just over twice my annual salary. That same house is now 5 x my annual salary.

9.7% is nor 'fairly reasonable'.

GG