DFW Running Club!!

(Land_of)_Maz

sallyx wrote: »

Maz yep I rent too but privately. Cost of Houses in Dorset is just laughable. No way that we can afford a house but if things keep going down that might be possible :T Just need to clear the debt then we should be on the up!

I'll know where to come for mortgage advise then P

typical, just as we get closer to being debt free (my debts!) and house prices come down to more affordable levels, mortgages become harder to come by!

sods law!!

RichOneday_2

It looks like the mortgage market is well and truly stuffed for the time being.

LIBOR (the rates banks lend to each other) DOUBLED overnight. Nobody can remember that happening before. So no new mortgage deals for some time because the banks that do have cash will look to keep hold of it to avoid having to borrow in the near future.

This is getting worse quickly. At least a painful quick shakeout might find the bottom earlier.

Get your cash under your beds! :p

The London interbank offered rate, or Libor, that financial institutions charge each other for loans soared 3.33 percentage points to 6.44 percent today, according to the British Bankers' Association. The increase was the biggest in its history. The rate was as low as 2.07 percent in June.

sallyx

Think stashing your cash under the mattress might become really popular again

beer_tins

(Land_of)_Maz wrote: »

typical, just as we get closer to being debt free (my debts!) and house prices come down to more affordable levels, mortgages become harder to come by!

sods law!!

Well the two are actually connected! I won't go into a whole long post about the cause but basically:

1) House prices at x, mortgage rates at y. Monthly payments broadly affordable for most.

2) Credit crunch. Less money to go around. Bank's get more selective about who to lend to, higher deposits and higher rates.

3) Rates are at y+?. House prices must come down to x-? So that monthly repayments are still affordable to buyers. i.e. monthly repayments are broadly the same as they were at 1)

The thing to bear in mind is that prices haven't fallen because people don't want to own houses anymore - they do - they simply can't afford them any more. Broadly speaking, houses won't get more affordable until the British actually fall out of love with the idea of owning their homes.

beer_tins

sallyx wrote: »

Think stashing your cash under the mattress might become really popular again

That's why a lot of money went into gold (and oil), because these are considered safe places for your money in a storm.

Money under the mattress isn't necessary, but keep it in a savings account which a) gives you interest and b) is government backed in case the bank fails.

RichOneday_2

beinerts wrote: »

Well the two are actually connected! I won't go into a whole long post about the cause but basically:

1) House prices at x, mortgage rates at y. Monthly payments broadly affordable for most.

2) Credit crunch. Less money to go around. Bank's get more selective about who to lend to, higher deposits and higher rates.

3) Rates are at y+?. House prices must come down to x-? So that monthly repayments are still affordable to buyers. i.e. monthly repayments are broadly the same as they were at 1)

The thing to bear in mind is that prices haven't fallen because people don't want to own houses anymore - they do - they simply can't afford them any more. Broadly speaking, houses won't get more affordable until the British actually fall out of love with the idea of owning their homes.

Hehe This isn't half going to confuse runners coming on to the thread.

But this is simple as you point out Beer Tins and the myth that house prices rose sharply because they were worth more was nonsense - just that interest rates were falling so prices increased to keep monthly repayments roughly comparable. Its not rocket science as they say!

(Land_of)_Maz

RichOneday wrote: »

Its not rocket science as they say!

might as well be to me!!!

sallyx

ive got a sore throat coming..well I have a tickly throat and that generally means the start of something. Now if only I knew what my resting heart ate was I could then tell couldn't I Rich

redsquirrel80

sallyx wrote: »

Think stashing your cash under the mattress might become really popular again

I'd need to find some cash first :rotfl:

I rent too - kind of wish I'd got a mortgage years ago when I didn't have a bad credit record etc etc.. but hindsight is a wonderful thing. I almost did once - lived with my ex in a flat which he owned (and I paid towards the mortgage.. but we'll not go there! :mad: ) and we were going to buy somewhere bigger on a joint mortgage, was all approved etc.. and then I decided I didn't want to stay with the boring possessive tw*t anymore Financially, I'd have been so much better off if I'd stayed, but I'm definitely emotionally better off! The whole mortgage thing is so out of reach for me now that I've stopped even thinking about it.

RichOneday_2

beinerts wrote: »

That's why a lot of money went into gold (and oil), because these are considered safe places for your money in a storm.

Money under the mattress isn't necessary, but keep it in a savings account which a) gives you interest and b) is government backed in case the bank fails.

And herein lies the key to a financial meltdown.

The statement is patently true, but once the panic starts you can line up bankers and politicians on every news channel simply repeating the phrase and they won't be believed. Then the bank runs start and once started they're very difficult to stop - imagine Northern Rock x 10.

Thats why the whole system is built on nothing more than fragile confidence and all the politicians are hoping for now is to get the whole thing off the news channels and forgotten about!!