Northern Rock

SarahNeedle1872

pania wrote: »

yep the consolidation adverts paint everything as rosey, "you're credit rating may be affected" Should well read "there is a 100% certainty your credit will be affected and you may find yourselves stuck woth us and your existing mortgage lender for a VERY long time!!"
the little bird turning into a dove and flying joyously off into the air
the man pictured in grey mowing his lawn that suddenly goes all colourful and you next see him accidentatlly taking his wifes head off with his new sit on mower (well thats what i always imagine will happen!)
It paints a very rosey picture when unfortunately life ain't like that! when what is really needed is education, both to children and adults alike. free evening courses on finance management etc.
I do with clients that wish to consolidate debt to their mortgage, yes on many occasions they have ample equity to be able to do it but i ALWAYS have the conversation with them of "are you sure you want to do this" do you realise the implications? do you understand that you will be paying interest on this debt for much longer than you would originally be?" and that they need to ensure they don't run up the debt again else pretty soon there will be no equity left to rely on. On some occaisons i've pointed them in the direction of this site!
I think northern rock have had a harsh lesson dealt to them, they have a very good very valid place in the market but i feel it's opened a lot of peoples eyes up to the financial reality of the siutation we as a country are currently in.

Wow Pania, I just read ur post, and it really made me warm inside....
I have never had dealing with a mortgage broker (STILL can't afford to buy a house, even at 27!:mad: ), but u hear so many stories about how people who work in the finance insdustry are forever trying to get people to take more credit, consolidate again etc ( I still remember the Barclays Whistleblower program, when the woman was trying to sell the old guy home contents insurance @ £10pcm - he only had £50pcm to live on:eek: ).... anyways, back to my point.... It's nice to know there are good guys out there.... Whilst I don't know the background as to why, I think ur debt 'experience' makes u the perfect person to advise, as u know what its like on both sides of the coin.

I really hope that didn't sound patronising? Ur post just made me feel good

Sarah x

pania

thanks sarah thats lovely to say. (still can't afford my own house either and i'm 30!!) it certainly gives me empathy with people and the ability to relate to them easier. I've been there and understand when people are embarrased or ashamed about their debt. If i helped someone out who later got repossesed i'd feel totally responsible. Mortgage brokers have a cr*p reputation sadly, there are many good guys out there that get overshadowed by the cowboys.
Have a great day, off for egg and bacon butties now!! xx

fletch3163

LOL @ Pania (sit-in mower guy)

Northern Rock is still very much a solvent company. It said on BBC this morning that even if every account holder removed their money they would still be solvent so that's something. The FSA have even stuck their necks out (which they don't do lightly) to say it's solvent. BBC had a stockbroker on too (red braces and cravat:rotfl: ) saying he reckons it'll get worse in the next year or so financially and it'll test everyone's nerve.

Commercial property is also allegedly due for a correction so that'll affect all kinds of things like pensions, etc. The sub prime dramas in US have not yet come to rest, they're just hinting at causing trouble here in Europe because nobody knows how deep that goes and which institutions are holding US lender debt.

Karmacat

I got caught up in the Northern Rock queues yesterday - I'd given notice of withdrawal a month ago to pay my builders, so mine was deffo planned. But I was the youngest person in the queue by quite a bit - it was all pensioners with pots of money in, usually over the £33odd figure that gets 90% reimbursement. If I had that kind of money, I'd be spreading it around too!

And, btw, I think what happened to Northern Rock is just the beginning. I think several others are going to have to call on a line of credit from the BoE - which is all that Northern Rock has set up, after all.

MABLE

Could be worse Northern Rock could be knocking at the doors of its debtors asking for immediate repayment. Nice to see the tables turned for a change.

david_hellier

When you lend people 125% of the value of a property based on a Micky Mouse price tag invented by estate agents, in collusion with surveyors you are asking for trouble. Particularly when 75% of the money you are lending is of an unknown origin. It's curtains I'm afraid and no way to run a business. Get your money out while the taxpayer's lending.

By the way, Barclays had to borrow from the Bank a couple of weeks ago too.

SarahNeedle1872

Karmacat wrote: »

I got caught up in the Northern Rock queues yesterday - I'd given notice of withdrawal a month ago to pay my builders, so mine was deffo planned. But I was the youngest person in the queue by quite a bit - it was all pensioners with pots of money in, usually over the £33odd figure that gets 90% reimbursement. If I had that kind of money, I'd be spreading it around too!

And, btw, I think what happened to Northern Rock is just the beginning. I think several others are going to have to call on a line of credit from the BoE - which is all that Northern Rock has set up, after all.

Agree total Karma.... the banks have been way too good and lending out their money and borrowing from each other, and now as the 'credit crunch' bites, everyone's gonna be affected, not just us little people.... I just hope it doesn't have more serious implications.... we're all fooked if the banking sector collapses!! (Not that its what I'm suggesting is gonna hapen, just saying )

Sarah

PS - I had had more than £33k to save, I'd defo spread it around, not just keep it all in the same pot.

taxi73

It certainly is hitting the fan I heard on the news that house prices are going to drop by as much as 30%...this really won't affect me as I have equity but for the poor souls that have a high LTV or worse 100%+ mortgage and living right on the edge I feel this is where it's going to hit hardest..I'm so glad that I decided a few weeks ago not to buy a bigger house and that I'm going to stay here and build an extension instead(with cash when I can afford it) and stay here for the long term so what will crash will grow in value but not for a good few years at my guess...
I seriously think that there are very worrying times ahead but with lessons learnt from the last housing bust I think the government will think up some plans to at least not have as many people in the position that occurred last time..at the end of the day they need to keep the economy going...

SarahNeedle1872

taxi73 wrote: »

It certainly is hitting the fan I heard on the news that house prices are going to drop by as much as 30%...this really won't affect me as I have equity but for the poor souls that have a high LTV or worse 100%+ mortgage and living right on the edge I feel this is where it's going to hit hardest..I'm so glad that I decided a few weeks ago not to buy a bigger house and that I'm going to stay here and build an extension instead(with cash when I can afford it) and stay here for the long term so what will crash will grow in value but not for a good few years at my guess...
I seriously think that there are very worrying times ahead but with lessons learnt from the last housing bust I think the government will think up some plans to at least not have as many people in the position that occurred last time..at the end of the day they need to keep the economy going...

Sorry to ask a silly question Taxi, but what is LTV?

Dr_Hook

SarahNeedle1872 wrote: »

Sorry to ask a silly question Taxi, but what is LTV?

LTV = Loan To Value, e.g. an £85k mortgage on a £100k house would be 85% LTV