Whats going to happen to those who cant remortgage??

beecher

DaiJoA wrote: »

exactly, its all about the image nowadays - possibly this crunch will have come at just the right time for the new generation, although its killing the rest of us maybe some good will come out of it - !

my sister and I were having the very same conversation and hope that my nephew and niece don't have access to easy credit, as it just encourages people to spend what they don't have. I really hope things do go back to what they used to be, though I'd hate to be sitting with a massive mortgage at the moment.

missk_ensington

DaiJoa, you're 22? Im 22 as well :-)

My son is 4 and when he's old enough he'll do little jobs for £10-15 a week pocket money. His grandad owns a car garage and I hope when he starts high school he'll be able to go there and help valet cars, make the tea...etc to earn and be responsible for his own money.

None of my 22 y/o friends have faintest idea what APR is, and one didnt even know they were being charged interest on their Next Storecard til last weekend when I pointed out the 29.9% APR interest, they thought it was free!!!! None of them have a pension, and have no idea the different between fixed and variable rate mortgages. Most worryingly, of the dozen of so friends who were discussing finance last week, only 3 had even heard of Eqifax/Experian but none had any idea how to use it or what it was for!

My mum educated my on this from being 15-16, but a lot of parents dont know about their own finances well enough to educate their kids on theirs, which is where schools should really come in and give a course on interest, min payments, credit profiling..... and all that kind of stuff

missk_ensington

beecher wrote: »

my sister and I were having the very same conversation and hope that my nephew and niece don't have access to easy credit, as it just encourages people to spend what they don't have. I really hope things do go back to what they used to be, though I'd hate to be sitting with a massive mortgage at the moment.

I agree, but I think for me the main issue is self-control. You shouldn't be physically incapable of having a bit of credit for fear you'll blow it all! I have 3 credit cards with a £8,400, £4,600 and £9,000 credit limits (although just cancelled the £4,600 one as 0% ran out) - accumulatively over £20,000 of potential credit, and between the lot I have about £1,200! (I should note that if the cards demanded it back tmw I have the cash the repay the £1,200 but would rather be getting interest on it in ISA) Nor do I have any intention of putting more on them. I move them as soon as the 0% runs out, or pay them off. I think credit is a good thing, I like to know I have it just in case an huge emergency ever came about plus it makes me appear to be a responsible lender.

Avoiding any kind of credit like the plague doesn;t make you a responsible lender, it just makes you absent of any sort of self control or maturity. I have one friend who wont touch credit, and its a pain in the backside, like last month we had to cancel going to Drayton manor and postpone a week because she didnt get paid for another 3 days. I would have put it on a 0% and paid it back in full when I got paid, so credit is useful if used properly

beecher

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3671095.ece

This is quite a good article, summing up the situation we're in, and why cutting interest rates isn't the answer.

beecher

missk_ensington wrote: »

Avoiding any kind of credit like the plague doesn;t make you a responsible lender, it just makes you absent of any sort of self control or maturity. I have one friend who wont touch credit, and its a pain in the backside, like last month we had to cancel going to Drayton manor and postpone a week because she didnt get paid for another 3 days. I would have put it on a 0% and paid it back in full when I got paid, so credit is useful if used properly

I understand that, and have credit cards and a mortgage, so don't avoid credit. The point I was making though is that we have a generation coming up who are being brought up in a culture where they're encouraged that they can have it all, and when they're fed up with what they've bought, they can simply replace it again on credit. It is hard to bring up kids with a sensible approach to credit and debt in this culture, and I do worry about the peer pressure to have 'stuff' which teenagers have to put up with and would hope that this crisis will change this.

missk_ensington

beecher wrote: »

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3671095.ece

This is quite a good article, summing up the situation we're in, and why cutting interest rates isn't the answer.

Thats a really good article, they're right cutting interest rates wont help homeowners, it'll just increase inflation and make the belt even tighter for everyone.

neas

teach them the value of saving... like my parent sdid... my parents didnt have a credit card and neither did my sister or myself..

Bismarck

Good twist to the thread really....we've become accustomed to Finest or Extra Special or whatever when most of our salaries are just Value...how well we've been marketed to!

We've learnt to blow a chunk of our salaries on festive-quality food so that Christmas is meaningless....hey we can have the good stuff all year and if we want something like a CD or DVD or video game, we get it...who needs to wait until their birthday....

The sooner we collectively work out what our real priorities are the better...an 8% mortgage interest rate may be something to fight over when there's no money to lend anymore.

daveyjp

"what sort of idiot would get a 125% mortgage?!?!?!?!"

What sort of idiotic bank would offer such a mortgage?

If banks had stopped their silly offers months ago BEFORE the crisis struck the crisis wouldn't have been as bad as it is going to be.

If the money isn't lent, houses remain affordable and prices stay at a sensible level - the availability of 125% has partly caused what we are seeing now.

beecher

neas wrote: »

teach them the value of saving... like my parent sdid... my parents didnt have a credit card and neither did my sister or myself..

Your parents, yourself and your sister didn't have the same sort of peer pressure teenagers do now. When I grew up in the 70s and 80s no-one had anything much. First flat I rented had no hot water, telephone, washing machine or proper heating, let alone sky/broadband/games systems that are now seen as the 'norm'. My parents' house wasn't much better when it came to mod cons. It was a lot easier to have a MSE attitude then, when people in debt, or having to take on a second mortgage (as remortgaging was described) were scorned or pitied. Young people going to university have to get into debt, which again normalises it all.

It is all very well thinking that young people should have more self control, but the whole culture has to change and I'm hoping that it will be the one positive thing to come out of the recession we're heading towards.