A REAL Mortgage Crisis Coming?

MissMoneypenny

What happens when the BTLers have to remortgage and they can't get a good deal because the goal posts have moved?

kingkano

MissMoneypenny wrote: »

What happens when the BTLers have to remortgage and they can't get a good deal because the goal posts have moved?

I think Generali covered it a couple posts back. They will either get what deal they can and bludgeon on, or they become a distressed seller.

Generali

kingkano wrote: »

Very hard to call their moves. The same BTLer you mention if they are 40, might see prices after they have dropped a bit as the perfect opportunity for an increase in their portfolio? But then they might also think, when is the right time to jump in. Catching a falling knife and all that.....

True and maybe it is, maybe it isn't. They will need to find a lender and as lending criteria seem to be getting tougher they may find that they are saved from themselves if they fancy taking on too much more risk.

kingkano wrote: »

I can see your point too. But have they missed that boat already if they haven't cashed in??

Not necessarily. If you bought a couple of 3 bed terraces in a reasonable bit of London on a 40% deposit 8 or 9 years ago, the realisable value must have doubled easily. If they bought 2 at £250k on a £100k deposit each and the 'price' has gone up to £600k each (not unreasonable) if you took an offer of £500k you'd sell in an instant. You owe £300k and so are making a gross profit of £500k on your £200k deposit. It's just a fictional example but I bet there are plenty of people sitting on big 7 figure gains wondering what to do next.

jamescredmond

adr0ck wrote: »

and since when did a sentence being with a little 'a' (or even the word and can u do that?)

quick u better report yourslef to the spelling & grammAr police

oh you r the spelling and grammar police........

caught me out.

afraid I've fallen into the mse trap of eng. laziness.
the victim of a stern, precise english teacher who insisted that poor english was a sign of inarticulacy/idleness. made you looked 'a little thick' and wouldn't help with written job applications, don't you know.

he was also fond of: sarcasm is the lowest form of wit.

no worries.

I hit the 'thanks' button for you.

let's be pleasant.

PasturesNew

Good spelling makes me hot

ManAtHome

PasturesNew wrote: »

Good spelling makes me hot:)

Yoo shure thaz nott duh mennerpaws..?

fc123

PasturesNew wrote: »

Good spelling makes me hot

:rotfl: :rotfl: :rotfl: :rotfl: Every time I read your posts now , I recall the one the other day about the donkey noises and the lolling around naked....help...visualisation is not a good talent to have sometimes

wigglebeena

beingjdc wrote: »

Last summer on daytime TV - she was asked about housepricecrash.co.uk and people who had sold up because they were expecting a crash. She said they made her blood boil, and that if they did the same thing with shares it would be insider trading and there are laws about it for a reason.

don't you have to have inside knowledge to make it an offence even with shares? (hence the insider bit?) i mean i can say, 'ooooh, me elbow hurts and the wind is in the east (:p ), that gives me a funny feeling that M&S shares are going to go through the roof!

And by her reasoning I should be clapped in irons for expressing an uninformed opinion.

Honestly. what a div.

geoffky

Wikipedia defines denial as the 'first state of coping with loss'. Often times, people deny something that they know is true because acknowledging the existence of a situation is simply too painful.
This seems to be exactly what is happening with the housing bubble. There are many individuals and organizations that are going out of their way to deny the existence of a housing bubble within the U.S.
Many of these optimists have ties to the industry-they are real estate professionals, mortgage brokers, banks, and investors. They make money when housing is up and lose money when housing is down.
For awhile, they were able to ride a financial wave that seemed unbreakable. Housing was a 'can't go wrong investment'. People who knew nothing about the industry were delving in with the hope that they could make a quick buck. And it worked for some-up to a point.
Then, the market took a bad turn. In some areas, home prices had escalated beyond what was reasonably affordable for the average buyer. In fact, home prices appreciated so fast that they outpaced rents and wages. This was the first obvious sign that a housing bubble had formed.
The second came with the rapid increase in the number of people using adjustable rate mortgages and interest only loans. This proved that the average buyer could not afford the average home with an average salary. For the dream of homeownership to morph into a reality, buyers need to look to the short term only.
Lenders also played their part to keep the ball rolling, loosening strict regulations and encouraging buyers to participate in creative financing as a way of purchasing homes that weren't affordable under normal circumstances. Adjustable rate mortgages and interest only loans became the norm. In some regions, like the Bay Area in California, more than 80 percent of mortgages taken out in recent years fell into the ARM category.
The third, but not the final indicator came when trusted insiders, like the National Association of Realtor's David Lereah and Fed Chairman Alan Greenspan, flat out scoffed at the existence of the housing bubble, and encouraged people to buy, buy, buy before it was too late. This was most unusual, because a good investment shouldn't need such touting. If the investment is really that good, people will buy into it without pressure.