Whats going to happen to those who cant remortgage??

bigcloud72

I hope nobody gets repossed and remember this doesn't suit the banks either. They want to avoid that as well.
Lots of people will end up switching to interest only or paying the extra for a year if they can. Although overextended borrowers will suffer the most.
This credit crunch will last at least till summer 2009 and will claim some very overtended borrowers.
But most people will battle through and wait for the next boom. It will come and the lenders will be fighting over market share again just like the last few years. They never learn and will make the same mistakes again. Its just greed on the part of lenders (especally the USA) that has caused all this.

Beancounter

I have 2 years of my fixed rate left, doubt I would get a decent deal in 2 years anyway as the balance would only be about 27K with 13 years left.

My plan at the moment is to pay whatever I have saved in the next 2 January's (my mortgage allows a overpayment of 10% of the balance every January) reducing the monthly payment. So in 2 years I will hopefully be paying what I am now. This of course assumes rates stay around the current level.

I guess I am also lucky as my current mortgage is only around 15% of the property value.

DaiJoA

missk_ensington wrote: »

Well wouldnt the owner of this over-subscribed flat not just find a new tenant?

I dont think thats quite what i meant, i've put it wrong cos my hands are freezing and its stopping my typing skills! meant that we've a market flooded with 100's of new build flats, loads sitting empty, loads all been repossessed by the above situation. Some of the buyers never make a single mortgage payment, just pocket all the housing benefit money and disappear back home. apparenlty its happening everywhere but I know of two separate cases, and both came through letting agencies, not private landlords, so it was fooling everyone, but I think its died down now.

chappers

What gets me about all this sort of thing is people complain that it's so unfair we won't be able to remortgage, we are getting repossesed etc.
People have to stand on their own two feet and take some responsibility for their own actions. Once the good times start rolling individuals and the financial industry seem to lose their memories.
When we took out our first mortgage in 1998 I was no where near as financialy savvy as I am now, we arranged our mortgage through Nationwide(I didn't even really have the idea to use abroker then) Can't remember the rate but think it was probably 7-8% or something we stretched ourselves to the limit pretty much but I did ask what would happen to our repayments if interest rates went up to 10,12 and 15%.The guy at Nationwide said to me why do you want to know that that will never happen,what an idiot we had just come out of a massive recession where rates were that high.
We decided to take the risk as initial indications were that the housing market was picking up,rates were falling and we had saved a 20% deposit.
At the time we knew the risks and were prepared to take the consequences.
Those with sensible mortgaes and incomes I don't think will have too much trouble it's those ,that maxed themselves up maybe with high income multiples, bad credit etc , who decided they had to get a mortgage at all costs that will be stuck.
responsibility for your own actions is the only way i really see it.

As for being bailed out by the government etc .That may be a possibilty but there was possible hinting of that a while back when the government said it didn't realise that such a large percentage of NRs mortgage book was 100% plus mortgages on short term deals, however as time goes by this seems unlikely particularly as people with mortgages from other companies are finding themselves in a similar situation.
With regards to another lender filling the void also very unlikely taking on these high LTV, high risk borrowers is partialy what got NR into the situation it's in now. I remember when NR hit the high street big time their rates were competitive and they were taking on plenty of business, their competitiveness seemed to dwindle away and they then went after the high risk ,high LTV market to bolster their mortgage book but we now all know the rest.

DaiJoA

bigcloud72 wrote: »

But most people will battle through and wait for the next boom. It will come and the lenders will be fighting over market share again just like the last few years. They never learn and will make the same mistakes again. Its just greed on the part of lenders (especally the USA) that has caused all this.

that's what we're doing, getting out and trying to find a cheap rent, save as much as we can on top of our equity which will be locked away in a high interest account for a year. We've worked out that we can save at least £300 a month, which doesn't seem much but it all helps and it will be worth it in the end. Also, where we want to live is a small village where in the past houses were snapped up like hot cakes, literally within days nevermind weeks, now we're seeing values shredded by the fortnight and more and more of these for-sale houses now going on the rental market instead just so their owners can get out and into a new house. SO we're hoping that in a years time the houses will have come down to more sensible prices.

missk_ensington

DaiJoA wrote: »

Reading the two linked articles makes my heart sink of us EVER being able to get another mortgage deal, especially as my dh is 37

Back in April 06 we - earning a joint salary of nearly 30k - were offered up to £127k on 2yr fixed, or up to £144k on 5yr fixed, at rate of 5.99, 100% LTV

seems like another universe compared to now! even with a £10k deposit, we'll still need 90% LTV at least, that won't be until another 12m at least but still, the way high LTV products are being withdrawn...... it looks like many days of saving ahead!

Awwww dont feel down you never know whats around the corner! You're pretty young didnt you say? You never know you might have a whopping income in a few years and not need your other halfs contribution, anything could happen, a rich relative you didnt know you had mught die and leave you everything!

missk_ensington

DaiJoA wrote: »

I dont think thats quite what i meant, i've put it wrong cos my hands are freezing and its stopping my typing skills! meant that we've a market flooded with 100's of new build flats, loads sitting empty, loads all been repossessed by the above situation. Some of the buyers never make a single mortgage payment, just pocket all the housing benefit money and disappear back home. apparenlty its happening everywhere but I know of two separate cases, and both came through letting agencies, not private landlords, so it was fooling everyone, but I think its died down now.

My mum has a property company and thats what her tenant did, got the HB cheque sent to her, cashed it and didnt pay the rent. She was a single parent, but it turned out she was fraudulently claiming HB cos her partner and her were still together he was just working away. My mum finally got her evicted after many court visits, the said tenant contacted Shelter and they helped her repay the money at £4 a week from her benefits. Bloody Shelter approached me in town th eother with a clipboard trying to get me to set up a DD for £3 a month, you can guess where I told them to shove that!

DaiJoA

Yeah its quite surprising all the loopholes you can jump through if you know about them - the people next door are all nicely set up in an another council house now, with their big fat telly! when the house was burning down that's all she was thinking about - get the telly out!

as for the rich relatives, well my grandparents are well off, not rich, but just sensible old folks with big houses and no mortgages, I don't want them to die tho! but like I said to my husband, we do have to be mecenary about these types of things, we know they've left us quite a bit, and his parents have a shed load of equity in their house and they are hoping to move to a much smaller place and they'll have loads left over, but no doubt that'll get locked away until they've gone - if that was me I'd rather share it about a bit

Just have to keep on saving, its actually reasonably fun when you get on with it and it makes you appreciate anything extra, rather than just whacking it on a pretty card. We also plan to sell most of our life on ebay as well, whether they'll be anyone at the other end to buy it I dont know!!

cupid_s

beecher wrote: »

That's very low - are you sure you're looking at the present SVR and not the one you were quoted at the time of your deal? The one I was quoted was also very low at the time, probably near to what you were quoted, but is now 7.25%. I don't tend to consider this when applying for a mortgage as my LTV is 30% (at the moment anyway...)

My mortgage statement for end of march definately says I'm paying 5.94%. I am aware that mortgages with other providers are very much higher.

I had to take into account the variable rate when we got our mortgage because I knew that when the 3 year fix was up neither DH or I would have a job so wouldn't be able to remortgage. I suppose I am lucky because of that.

missk_ensington

I have loads of stuff I want to put on ebay but Im hopeless at doing it, last time I wrapped the stuff up and forgot to take it to the post office for like 3 weeks. Needless to say my customers weren't exactly thrilled. I'd happily pay someone a portion of the profit to do it for me, Ive heard such businesses exist but I can't find any near me. Anyone know of any in the North, and if not, there's a gap in the market!!