TV Tonight

tr3mor

Melissa177 wrote: »

I borrowed 4.5 times my salary (now less than 4 times, thanks to a pay rise). This is pretty high.. Am I sub-prime? My credit record is good, and I have no problems paying my mortgage and putting extra away. I got a competitive grad loan, and didn't go for a "sub-prime" lender.

I disagree that high salary multiples are sub-prime in the way that a lot of US loans have been to NINJAs.

Mortgage lenders have prime loans. These give their best rates and cheapest fees to people they judge to be the least risk.

I'd guess with a graduate loan at 4.5 times your salary then the mortgage lender would not consider you to be the lowest risk on their book.

I'm not saying that your loan is comparable to any NINJA loan in the states, but it's not prime. I get the impression that you don't want to think of it as sub-prime because you don't want to be compared to Billy-Joe and his cousin/wife in deep south America.

Afterall, Ben Nevis and Everest are both mountains.

m00m00

the notion of 'prime' vs 'subprime' is relative.

I would guess that Melissa with now a 4x mortgage, is probably VERY prime compared to the average london FTB'er of the past couple of years, given the way properties have ramped up in price.

ds1980

!!!!!!? wrote: »

Very few people have 'made a fortune' out of property price increases.

A lot of people now have increased equity but that isn't the same thing.

They only make money when they sell the house.

They can of course borrow money against the equity but that just means they are heavily in debt.

Most people who sell their house use the money to put towards a bigger/ better one. As prices rise, this step up costs more and more. This means they end up taking on more debt than they otherwise would have had to do.

Some property speculators have made money, EAs too and definitely builders. But this is more than offset by huge numbers of people up to their neck in mortgage debt which they may ultimately be unable to service.

Higher prices haven't made people in general richer - they have just enabled many people to borrow more in the form of secured loans (mortages, equity release) and thus directly contributed to skyrocketing levels of personal debt.

Don't quite know the type of people you know but speaking from experience myself included we have "made" a fortune, not equity or alike...........hard cash. I know dozens who have its a myth that everyone just buys x5's and go on trips to las vegas to play the wheel with some remortgaged money!

I love the way you say property speculators. everything we do is speculation its called investing. Just because you havmt obviously made any money doesn't mean that no one has. When you buy a share or invest in a investment fund all your doing is speculating.

These programmes make me laugh becuase its these numpties which allow the savvy among us to make more and more and more!!!

carolt

You know you come across as a really likeable person, ds1980.

WTF?_2

ds1980 wrote: »

Don't quite know the type of people you know but speaking from experience myself included we have "made" a fortune, not equity or alike...........hard cash. I know dozens who have its a myth that everyone just buys x5's and go on trips to las vegas to play the wheel with some remortgaged money!

I love the way you say property speculators. everything we do is speculation its called investing. Just because you havmt obviously made any money doesn't mean that no one has. When you buy a share or invest in a investment fund all your doing is speculating.

These programmes make me laugh becuase its these numpties which allow the savvy among us to make more and more and more!!!

There's smart investing, based on appraising the facts and doing your sums and research, and then there's blindly jumping onto a bandwagon.

Such has been the remarkable increase in money supply and relaxation in lending criteria over the last 5 or 6 years that almost anyone could 'make money' by speculating in almost any market. Equities and housing have rocketed simply because the marketplace was a awash with cash and it had to go somewhere.

When you can take 25k and borrow an additional 175k with it to buy an asset that's increasing at 10-15% year on year versus getting 3% interest on your capital in the bank, it's hardly a surprise that lots of people did it. The only surprise is that the availability of easy money went on for so long before it all went belly up.

(Unfortunately, many people seem to have put their mostly fortunate gains in the property market down to the mistaken belief that it must be because they are a wizard investor :rolleyes: )


The real trick will be for them to keep making money in the somewhat leaner times to come or at least get their money out of their highly illiquid investments and still have an appreciable amount left after they have paid taxes and fees. I'm guessing we'll see just how financially savvy a lot of the self-proclaimed investment gurus are in the coming year or two.

ds1980

!!!!!!? wrote: »

There's smart investing, based on appraising the facts and doing your sums and research, and then there's blindly jumping onto a bandwagon.

Such has been the remarkable increase in money supply and relaxation in lending criteria over the last 5 or 6 years that almost anyone could 'make money' by speculating in almost any market. Equities and housing have rocketed simply because the marketplace was a awash with cash and it had to go somewhere.

When you can take 25k and borrow an additional 175k with it to buy an asset that's increasing at 10-15% year on year versus getting 3% interest on your capital in the bank, it's hardly a surprise that lots of people did it. The only surprise is that the availability of easy money went on for so long before it all went belly up.

(Unfortunately, many people seem to have put their mostly fortunate gains in the property market down to the mistaken belief that it must be because they are a wizard investor :rolleyes: )


The real trick will be for them to keep making money in the somewhat leaner times to come or at least get their money out of their highly illiquid investments and still have an appreciable amount left after they have paid taxes and fees. I'm guessing we'll see just how financially savvy a lot of the self-proclaimed investment gurus are in the coming year or two.

Complete nonsense. The savvy people will move on and make money elsewhere. There's no need to keep making money if you've already made it! People buy companies improve them and move on making millions in the process what happens to those companies after could they give a toss about?? Me thinks not!

Eg Red or Dead sold by The hemingways for a tidy sum, left with a great deal of regard and were asked to return to salvage the company off the people whom bought it off them. When they did they made more money on top of what theyd been given for the company. Purely business thats all it is and its the stupid ones that will fail not savvy investers.

Like any investment it has its ups and downs. with money in the bank why would you need to do something that is very highly risked now when other investments give the same incentives but with less risk! The way i saw it until very recently property was an extremely good thing however not so much any more although there is still good money to be made if you know where to look or can exploit the vunerable.

I very much understand your point but don't believe everything you read in the papers or on this board because it simply isn't reflective of the real world.

dolce_vita

ds1980 wrote: »

...... until very recently property was an extremely good thing however not so much any more although there is still good money to be made if you know where to look or can exploit the vunerable.

................What?

tomstickland

I though discussing house prices was only allowed in the sticky thread?

Anyway, I'm off to the internet to see if I can find some clips from the programs.

Melissa177

tr3mor wrote: »

I'm not saying that your loan is comparable to any NINJA loan in the states, but it's not prime. I get the impression that you don't want to think of it as sub-prime because you don't want to be compared to Billy-Joe and his cousin/wife in deep south America.

Actually i had Peggy Mitchell from Eastenders in mind

tomstickland

BBC have the program on their website
http://news.bbc.co.uk/player/nol/newsid_7050000/newsid_7052200/7052247.stm?bw=bb&mp=wm&nol_storyid=7052247&news=1