MSE News: Help for struggling mortgage borrowers urged

rtanswell

There certainly is a lack of education when it comes to finances and a desire to have every material thing possible to be cool. So things do need to be tighter and I understand that. But the lenders are assuming all of us are just in it for a quick buck when most of us are just trying to re-arrange our finances in order to help us survive in what is becoming rip off Britain. Look at the likes of British Gas, posting record breaking profits whilst us consumers struggle with costs increasing whilst income is not.

wymondham

I'm very much of the opinion the state should stay out of peoples private housing arrangements and financial investment. If someone purchases a house then that is their own choice, and is not social housing which the state needs to support.

I know it sounds cold, but if the repossessions occured, housing costs would go down and improve the situation for those who can then afford to buy.

In the article is says it's already 'saved' 250,000 properties. That then has prevented 250,000 reasonably priced repossessed properties from becoming available to those who could afford them - is this sensible policy, especially as it also indirectly allows builders to keep their prices high?

Some things just need to happen in order for the free market to work, and letting this play out without intervention is one of them.

I don't think it fair that the tax payer subsidise somebody's private investment choice. This scheme is only in place to stop bad publicity, nothing more.

rtanswell

wymondham wrote: »

I'm very much of the opinion the state should stay out of peoples private housing arrangements and financial investment. I know it sounds cold, but if the repossessions occured, housing costs would go down and improve the situation for those who can then afford to buy.

With 250,000 reasonably priced repossessed properties about, do you think builders would still be able to get away with their overpriced rabbit hutches?

Some things just need to happen in order for the free market to work, and letting this play out without intervention is one of them.

I don't think it fair that the tax payer subsidise somebody's private investment choice. This scheme is only in place to stop bad publicity, nothing more.

Agreed! If you can't afford an investment long term, then you should invest in something you can afford long term. You should also try to cover that investment with insurance policies to cover things like illness, redundancy etc. In fact that should be factored into your investment.

Of course there are some very sad and unfortunate circumstances that can cause an investment you think might have been affordable to become unaffordable and for this reason there should be help available, much like it is for those on lower incomes etc who have their rent etc subsidised.

SouthCoast

In the olden days folks used secured mortgage lending to buy a property for their family to live in, not to fund the cost of lifestyle choices.

JimmyTheWig

rtanswell wrote: »

Surely it benefits only the lender to move unsecured debt to secured debt? For me, it means I can manage it better as monthly repayments are less. I'm not so blind to see that the interest I will pay, despite the interest rate appearing lower, will be significantly more as it's over a longer period of time! So the new lender, despite having to wait longer for the total to be paid off, will be making more money in terms of interest and have the security of knowing that they can reposess a property which is pretty much guaranteed to cover the cost of their lending. For me it's a no brainer.

Yes, it benefits the lender to move unsecured debt to secured debt. But that doesn't make it responsible for them to do so.
If they knowingly allow you to make a choice that results in you losing your home, it will look bad for them.

jamesd

SMI keeps people in their homes instead of having them forced out to move into rented accommodation where they would be eligible for Housing Benefit. That Housing Benefit is likely to be more expensive.

SMI could be modified so it didn't apply to people with more than a certain amount of equity in their home, so that lenders to those not receiving SMI could capitalise interest arrears until the balance owed reached say 25% LTV, when SMI might start.

grey_gym_sock

rtanswell wrote: »

Surely it benefits only the lender to move unsecured debt to secured debt? For me, it means I can manage it better as monthly repayments are less.

and for the lender, it means lower monthly repayments. and you wanted to know how the lender would lose out?

beckythemadcow

wymondham wrote: »

I'm very much of the opinion the state should stay out of peoples private housing arrangements and financial investment. If someone purchases a house then that is their own choice, and is not social housing which the state needs to support.

I know it sounds cold, but if the repossessions occured, housing costs would go down and improve the situation for those who can then afford to buy.

In the article is says it's already 'saved' 250,000 properties. That then has prevented 250,000 reasonably priced repossessed properties from becoming available to those who could afford them - is this sensible policy, especially as it also indirectly allows builders to keep their prices high?

Some things just need to happen in order for the free market to work, and letting this play out without intervention is one of them.

I don't think it fair that the tax payer subsidise somebody's private investment choice. This scheme is only in place to stop bad publicity, nothing more.

I am completely with you here! The government is helping irresponsible homeowners out to the detriment of those like myself who cannot get on the housing ladder. Not only is there a reduced amount of repossessions on the market, but it is limiting the supply and therefore increasing the cost of homes as demand increases.

Not only that, but guess which poor sods are paying for others mortgages? The insanity - I can contribute to other peoples housing but the banks will not allow me any control over my own housing situation.:mad:

Surely the banks will be happier to lend when they have washed their hands of all this bad debt?

rtanswell

grey_gym_sock wrote: »

and for the lender, it means lower monthly repayments. and you wanted to know how the lender would lose out?

Not in my case as I'm remortgaging from one lender to another as my current lender can offer me nothing decent now my fixed rate has ended. So surely this is new business for the new lender you'd think they'd be falling over you for. They're desperate for you to transfer CC balances, open savings accounts, offer insurance etc and will bite your arm off to try and sell you any of those. But when it comes to lending out some of their own precious money on a low risk basis, they make you jump through hoops! That's my point.

Banks/lenders should be encouraging good customers to stay with them, not allowing them to become credit !!!!!s. Competition is a good thing but many would chose loyalty over a slightly better rate if their current lender made them better offers like extended fixed terms etc

I'd much rather go for a slightly higher percentage with my current lender to avoid the hassle than go with a new lender and have the hassle that comes with a remortgage.

Maybe the lenders/banks need to work on rewarding/keeping loyal, reliable customers. In fact it's not just banks/lenders but in my opinion, new customer deals should be available to existing customers. Take note Sky, Orange, Vodafone, O2, BT, British Gas etc etc

grey_gym_sock

so instead of the government paying SMI, you'd rather they paid a larger sum in housing benefit?

and the distress that losing their homes would cause to ppl is of no consequence? i'm in favour of ppl taking responsibility for themselves, but that should be balanced with a little compassion.