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Debate House Prices
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95% mortgage time bomb yet again?
Noname2000
Posts: 2 Newbie
I am hearing of these new government backed 95% mortgages which sound too good to be true.
If someone only risks 5% down, then if the value of the house does indeed fall so they are in negative equity, its not that much to lose if they just stop paying the mortgage. It takes months to evict and repossess these days.
This was the big problem in the USA, people just stop paying the mortgages because the property had fallen to less than they owed on it.
If someone only risks 5% down, then if the value of the house does indeed fall so they are in negative equity, its not that much to lose if they just stop paying the mortgage. It takes months to evict and repossess these days.
This was the big problem in the USA, people just stop paying the mortgages because the property had fallen to less than they owed on it.
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Comments
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Noname2000 wrote: »I am hearing of these new government backed 95% mortgages which sound too good to be true.
If someone only risks 5% down, then if the value of the house does indeed fall so they are in negative equity, its not that much to lose if they just stop paying the mortgage. It takes months to evict and repossess these days.
This was the big problem in the USA, people just stop paying the mortgages because the property had fallen to less than they owed on it.
But you are still responsible for the eventual shortfall in the UK!Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
Typically MIG s only cover the lender.
Any actual shortfall is still recoverable from the borrower by the insurance compny AIUI."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Noname2000 wrote: »I am hearing of these new government backed 95% mortgages which sound too good to be true.
If someone only risks 5% down, then if the value of the house does indeed fall so they are in negative equity, its not that much to lose if they just stop paying the mortgage. It takes months to evict and repossess these days.
This was the big problem in the USA, people just stop paying the mortgages because the property had fallen to less than they owed on it.
only if peopel lose their jobs and something bad happens they cant get another, just because someone is in NE they will not just automatically stop paying the mortgage. house buying should be looked at over at least a 10 year periodEx HPC fool0 -
If there are more buyers, as created by your 95% product, then wouldn't supply and demand curves cause the house prices to rise?0
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grizzly1911 wrote: »[STRIKE]Typically[/STRIKE] MIG s only cover the lender.
Any actual shortfall is still recoverable from the borrower by the insurance compny AIUI.
Amended for you.
Insurance company does not pay out until all other avenues are exhausted either.0 -
nomoneytoday wrote: »If there are more buyers, as created by your 95% product, then wouldn't supply and demand curves cause the house prices to rise?
Exactly what I was thinking.
What can possibly go wrong ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
nomoneytoday wrote: »If there are more buyers, as created by your 95% product, then wouldn't supply and demand curves cause the house prices to rise?
No. As 95% mortgages require 6 times the level of capital as 60% LTV ones. So finance would rapidly dry up. If that's all that was on offer.0
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