Recession - interest rates / economy etc.

revingtosh

Hi,

We moved to a bigger home last year. As a result our mortgage nearly doubled, although im not not complaining.

I'm growing increasingly worried about the recession that everyone says that is on its way. Im not a financial wizkid, but if this is true, then i do fear that we wont be able to meet mortgage repayments or even worse, end up in a negative equity situation.

In order to try and pre-empt what might happen, i see that the following options are open to me.

1) Do nothing, and hope that the UK recession doesnt come.

2) Sell the house and downsize now, while everything is OK.

3) Jump into a long term fixed rate mortgage and ride it out.

4) Sell up and move into rented accomodation.

What do other people think? And what do you think will happen to the British economy and property prices in general. Are we

I dont like to scaremonger, but i know of a friend who has been advised to knock £50000 off the sale price of her house in Manchester in order to get a sale.

The valuer reckoned that if she'd have left it another 12 months, it would have been more like £70000.

Please let me know what you think. I need some expert advice!!

Mike

Dan_Collins_2

Things are going to get a little tough, but I dont think you should be that worried if you can afford the payments now. A fixed rate will help you ride out any increases so that may be better than selling up.

It also depends on what you do for a living. If you work in the city for a large US bank you will be more at risk than if you work for the local council!

revingtosh

Actually, i do work for the local council.

Im just fearful that interest rates will rise from the current 6percent up to like 15 percent like in the 80s and early 90s.

Mike

UK007BullDog

Are you on a tracker. If you are worried then change it to a fixed to ride it out longer term. If you had to rent you would be paying a lot and are no safer than in your own 4 walls.

Stop panicking and start thinking realistically. fix for a long term if you do can do so without paying a penalty and get on with your life.

going2die_rich

Just sit tight. It's only a real problem for those who couldn't really afford the mortgage when they took it on, let alone now when good mortgage deals no longer really exist.

If your job is safe and your mortgage is fixed or only allowed to increase by so much, you will be fine. It just means you can't sell your house without losing money for a while, but since you have just moved to a bigger home, I am guessing you aren't looking to move anytime soon anyway.

If you are still worried, just cut back on your spending now and save a bit extra each month for any problems in the future.