A REAL Mortgage Crisis Coming?

ixwood

We all know know about the credit crunch, frozen money markets, banks running out of money, the "cooling" market etc etc, but it's going to seriously start affecting people soon and nobody really seems to be seriously prepared/preparing for it as far as I can see.

Anyone else think half the country is up the creek without a paddle?

100's of mortgage products are dissapearing. Lie To Buy, buy to let, 100%+ etc etc are being withdrawn AND more worrying banks are now wanting safe homes for their limited money. Allowed LTV values and income multiples are decreasing rapidly whilst rates and charges are shooting up and anyone with less than a perfect credit rating and in a good position are going to be made to pay extra. If they can get anything at all. Never mind a bad credit rating!

Cheap credit seems to becoming a thing of the past for a year or 2 at least.

LOTS of "normal" people are really going to struggle soon and it's already started, should we be doing more to discuss, riase awareness and prepare for this?

If i was a slightly stretched borrower, or approaching remortgage time with Credit rating/equity/LTV "issues", I'd be crapping myself, saving like mad and getting my finances in the best order possible in readiness for it.

Is it worth some research and a proper article by Martin maybe? Or would that just be scare mongering? It's looking likely to be a huge problem IMO.

pinkshoes

It's not a crisis. It's common sense kicking in!

Commonsensesearcher

pinkshoes wrote: »

It's not a crisis. It's common sense kicking in!

Couldn't agree more! But people will take a long time to accept that their property is not actaully going up by the price of a new Range Rover Sport every year...

Ce la vie!

pinkshoes

Commonsensesearcher wrote: »

Ce la vie!

C'est la vie!!! (now write it out 10 times!)

ps - Range Rover sport?!?! Bleugh!

ixwood

Agreed. kind of, but shouldn't people be warned? It's not just reclkess, greedy idiots who are going to hurting soon.

Anyone who brought within the nast year or 2 and many others could be in serious trouble.

The young teacher who thought he was being prudent "only" getting a 90% mortgage on a new build that has now dropped in value, the hard working family who needed to upsize for kids and could/can afford it, but have had credit issues in the past. etc etc.

ixwood

Oh and this isn't a HPC thread (sorry!), it's a "50% of people are soon going to really struggle to get an anywhere near competitive mortagge rate, if at all" thread.

ixwood

It could even be you who struggle come remortgage time! Assuming you've not a priced out bitter HPCer of course.

ixwood

Or what about the self employed plumber, that now can't get a (re)mortgage cos idiots turned self cert into lie to buy? "innocent" (in HPCer terms. lol) normal people are going to really suffer. Will that make you happy?

pinkshoes

ixwood wrote: »

Agreed. kind of, but shouldn't people be warned? It's not just recless idiots who are going to hurting soon.

Anyone who brought within the nast year or 2 and mauy others could be in trouble.

The young teacher who thought he was being prudent "only" getting a 90% mortgage on a new build that has now dropped in value, the hard working family who needed to upsize for kids and could/can afford it, but have had credit issues in the past. etc etc.

I see your point, but I would argue that why should people have to be warned over something that is (or at least should be) common sense?

This isn't the first time property prices have risen more slowly/stalled/dropped (depending on area). There was a big crash in the late 80s, which is common knowledge, and plenty of info available on the internet.

People are well aware that some areas increased lots in price, whilst others didn't.

People can openly look up rental prices, and work out if they're getting a good deal for their property by buying it.

When buying a house, you have to look at ALL the possibilities, including loosing your job, the price dropping, getting pregnant (twins?!?!) etc...

It IS common sense.

lynnexxxo

It might be common sense kicking in but there is still likely to be a LOT of people out there who are going to find themselves in really difficult situations.

For years we are feed the line, buy now pay later, get on the property ladder, treat yourself, don't worry everyone is in debt etc etc.

I wonder what good an article by Martin would do though? For many people the first time they realise that there debts may become a problem is when they apply for a remortgage or a new loan and are turned down. By this time the increased repayments on their debts mean that saving to try and get out the debt is impossible.

Its easy for those of us not saddled with credit cards/loans/100% mortgages to take the moral high ground and say well its your own making, you overspent blah blah blah. Personally, although I don't have any debts (apart from mortgage) I am trying to cut back my spending and save more, a down turn in the economy could lead to job losses - not many of us could continue to pay the mortgage for long then.

beingjdc

ixwood wrote: »

Agreed. kind of, but shouldn't people be warned?

Of course they should, but we've been warning people for some time now, and get called scaremongers, doommongers, whatever, and Kirstie Allsop goes on TV and implies that saying house prices are going to fall should be made illegal if you would benefit financially from them doing so. So what is one meant to do?

The ability of people to get a mortgage for £x, and the number of properties which change hands for £x, is intimately linked, so expect a downward spiral as buyers scale back their expectations, selling prices fall, banks reduce LTV further, redo from start.