Home Equity increases by 2.7% in 2011

RenovationMan

chucknorris wrote: »

I am merely backing up pimp's assertion of equity acquired on property bought decades ago with real life examples (I thought that was rather obvious tbh)

Careful, with that sort of wealth you're running the risk of *shock/horror* doing better financially than DervProf. If he reaches this conclusion then you'll look forward to him dogging your steps around the forum and him mentioning your finances far more than you ever have and moaning that you're always bragging about your finances (with him forgetting that he mentions them far more than you ever have).

Save yourself now and tell him you were just joking about the BTLs and that you live in the basement of your Mum & Dad's house. You might just get away with it if you're quick. :eek:

chucknorris

RenovationMan wrote: »

Careful, with that sort of wealth you're running the risk of *shock/horror* doing better financially than DervProf. If he reaches this conclusion then you'll look forward to him dogging your steps around the forum and him mentioning your finances far more than you ever have and moaning that you're always bragging about your finances (with him forgetting that he mentions them far more than you ever have).

Save yourself now and tell him you were just joking about the BTLs and that you live in the basement of your Mum & Dad's house. You might just get away with it if you're quick. :eek:

Was that quick enough?

shortchanged_2

RenovationMan wrote: »

Oh dear, and we were doing so well without the 'bull'/'bear' name calling rhetoric. I guess when you're on the back foot in a discussion, it's a convenient fallback.

Ho hum, that was an interesting debate for a while.

Not on the back foot RenoMan, but there's no point debating with people who bury their heads in the sand and deny that things happen.

DervProf

chucknorris wrote: »

I am merely backing up pimp's assertion of equity acquired on property bought decades ago with real life examples (I thought that was rather obvious tbh)

It is obvious, but the discussion was about IO mortgages, and the possible financial consequences for those that have them. IO mortgages for BTL investors, which I assume you are, are a different proposition than for the average Joe who simply wants to buy one property to put a roof over his head.

RenovationMan

chucknorris wrote: »

Was that quick enough?

I don't think so.

Thrugelmir

RenovationMan wrote: »

Do you have proof that there are quite a lot of mortgage holders who don't know what an IO mortgage is? Really?

Much of the focus and onus is on mortgage lenders for good reason. Last month a consultation paper was issued by the FSA.

FSA puts common sense at the heart of mortgage lending

The Financial Services Authority (FSA) today announced plans to prevent a return of the risky mortgage lending seen in boom times, by ensuring that common sense standards continue to apply in future.

The Mortgage Market Review aims to prevent a recurrence of the irresponsible lending which resulted in some borrowers taking on mortgages which only seemed affordable on the assumption that house prices would always rise. Many of those borrowers ended up struggling to repay their mortgage and in danger of losing their home.

At the core of the proposals are three principles of good mortgage underwriting:

Mortgages and loans should only be advanced where there is a reasonable expectation that the customer can repay without relying on uncertain future house price rises. Lenders should assess affordability;

This affordability assessment should allow for the possibility that interest rates might rise in future: borrowers should not enter contracts which are only affordable on the assumption that low initial interest rates will last forever; and

Interest-only mortgages should be assessed on a repayment basis unless there is a believable strategy for repaying out of capital resources that does not rely on the assumption that house prices will rise.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2011/116.shtml

DervProf

Thrugelmir wrote: »

FSA puts common sense at the heart of mortgage lending

I hope they put their ideas into action. Had they done this a decade ago, I doubt that our banks and economy would be in quite the mess that it is in now.

Graham_Devon

All this "people can simply sell up to pay the mortgage off" is missing the point, by a wide margin.

These are peoples homes we are talking about. I've seen it for myself, it can cause a lot of heartache and displacement. Often, as my parents found out, you can't just sell up and buy somewhere else locally. No one is going to give you a mortgage at that age, and you couldn't afford to pay off the measly (in comparison to todays prices) sum you still owed....the point being, you can't afford a house in that area. HPI has actually priced you out in some senses.

Therefore, its not just the house that you are having to sell and move from. It's often the locality. Friends. Maybe relatives. Maybe children / parents.

Theres a lot of confusion between business / investment homes and real family homes on this thread. I believe we are talking about family homes here, not business investments. For business investments, IO will always be ok. It's a completely different ballgame.

space_hopper

what a disgrace this thread is. This is a vested interests thread, nothing more, nothing less

Be very very aware people. It's not the EA's or sellers holding all the keys at the moment. There's a very good reason banks are valuing homes at well under the asking prices.

Banks for once are playing a responsible game. I fully agree with Graham above. Stop attempting to inflate another bubble that YOU and I, and YOUR KIDS will have to pay for in the future.


It's simply disgraceful that people are attempting to talk up the market when so many families are simply unable to house their kids in decent homes.
The banking industry need to seriously limit the number of mortgages it's offers in the future, NO MORE IRRESPONSIBLE LENDING PLEASE!

DervProf

Graham_Devon wrote: »

Theres a lot of confusion between business / investment homes and real family homes on this thread. I believe we are talking about family homes here, not business investments. For business investments, IO will always be ok. It's a completely different ballgame.

I mentioned this a few posts back.

I have already asked, but I'll ask again.... are there any stats published about IO mortgages ? It would certainly help the discussion.

I recall talking to a customer earlier last year, who'd suffered a drop in his business. He was going "great guns" when I had previously spoke to him about 5 years before, but last year he said that he had to switch to IO and was quite concerend about his situation. He did admit (although I already guessed) that he had taken on a fair bit of debt during "the good times", and was regretting doing so.

Now, I can see that for him, the IO mortgage is a lifeline while he waits for his business to improve, but it could prove to be costly in the long term if he can't start to pay back his outstanding mortgage.

I certainly haven't met many people in his situation (well, not many that spoke so honestly as he seemed to), so it's hard to say if this "problem" is widespread, or just a very small minority of mortgage holders.