If you wait for the price crash...

3under3

HouseBuyer wrote: »

we will struggle with paying our 250,000 repayment mortgage of about 1900 each month.

:eek: £1900 a month!!! Don't do it??? Are you sure you "need" a £250k house?? What happens if your circumstances change - you'll be up the creek for sure!!??

MissMoneypenny

going2die_rich wrote: »

How bad things have become? It's how bad peoples expectations have become which is the problem. Less than two decades ago, having one tv was the norm, now everyone expects to own several, along with all the gadets you can get your hands on.

The above only adds to the burden some people have on their mortgages. They felt rich because the value of their house was rising.

Mortgage rates are very low and the mortgage payments should therefore represent a very small part of their living expenses, but they aren't, because house prices have had this massive bubble and people have still been buying houses. Little thought has been given by some as to how they are going to pay their massive mortgages when the rates rise. I have read that welfare payments like working tax credits (which are recent benefits) can also be used as part of "income" for loans. 100% and 125% mortgages and the buy it all now and pay later mentality is going to be a terrible burden to many in the coming years.

WTF?_2

MissMoneypenny wrote: »

.. the buy it all now and pay later mentality is going to be a terrible burden to many in the coming years.

Frankly, I think some people nowadays don't actually understand the concept of credit and borrowing money in general.

Do they even teach stuff like interest payments at school any more?

Generali

mitchaa wrote: »

I too see your point Danny, but its the only solution i can think of that would get long term unemployed back to work.

That's maybe why im not a politician:rotfl:

My wife is going back to work in the next 6 wks and we will need to fork out 100% childcare costs. It boils my blood that some get it for nothing and that i have to work hard and pay for mine but then thats life, the whole benefit system is a shambles.

Work hard get shafted, dont work so hard, get every benefit under the sun to make you better off than those that work hard. Nice one:rotfl:

As you imply, if we didn't give benefits to people that are perfectly able to work then they'd work and we wouldn't have to pay such vast amounts of tax. If we paid less tax then we could afford to pay for our own childcare and to educate our children in the way we see fit rather than the way that a few civil servants prescribe.

Gorgeous_George

If/when prices crash, lenders will suffer immensely.

They will be repossessing property and selling it for less than is owed - leaving them with £millions (£billions maybe) of outstanding debt to recover from their former customers. These debts will take years to recover if at all. Many debtors will go bankruptand will have the debts wiped out.

With no appetite for lending, banks will be even more strict with lending criteria. They may not have the cash to lend.

As for the Government trying to cajole banks into passing on rate cuts, why should they? They've been forced to repay £billions due to unfair charges. The banks need to feed their shareholders and keeping mortgage rates high helps them to do so.

A bit of hope may come from commonsense. It is not in the banks' best interest to have people lose their homes. Keeping their customers in their homes may be a better option than repossession. At least that way, they can expect to recover some money.

GG

MissMoneypenny

!!!!!!? wrote: »

Frankly, I think some people nowadays don't actually understand the concept of credit and borrowing money in general.

Do they even teach stuff like interest payments at school any more?

I don't think the banks do either! I worked for one of the big 5 banks when I left education and if you got overdrawn, you got a warning.

However, it seems that banks attitudes have also changed over the years. In April I was paying into my ISA and got talking to the young male adviser and the talk got onto 125% mortgages. He was telling me how someone in their branch knew a lot about finances and as she had a load of cc debt and was struggling to pay her monthly ccs minimums, so she had got a 125% mortgages and used the 25% part to pay for her cc debt and used the 100% to get a house at a nice cheap rate. Now she could afford everything.

When I asked what would happen when her fixed rate came to an end and she might have to go onto the variable rate as her house wasn't worth her 125% mortgage, his face dropped when he realized their variable rate was 6.9%.

WTF?_2

Gorgeous_George wrote: »

As for the Government trying to cajole banks into passing on rate cuts, why should they? They've been forced to repay £billions due to unfair charges. The banks need to feed their shareholders and keeping mortgage rates high helps them to do so.

A bit of hope may come from commonsense. It is not in the banks' best interest to have people lose their homes. Keeping their customers in their homes may be a better option than repossession. At least that way, they can expect to recover some money.

GG

Of course, once they start doing this then don't expect anyone struggling to repay a mortgage to continue to do so.

It's a slippery slope. I'd expect banks to initially be completely ruthless in repossessing, as an example to other possible non-payers. However, should the house price falls develop into a full-blown crash set against the backdrop of a recession they may have to consider such measures.

That's if they can afford to essentially restructure the loan to something the borrower can afford to pay. Once everyone else in trouble realises that they don't have to pay the full amount of their mortgage every month they'll jump on the bandwagon too, making losses to the bank much greater.

baby_boomer

dannyboycey wrote: »

. I pay a lot of tax and it really riles me that the government take MY hard earned money and give it to lazy people to keep them stocked up on fags and booze!

It's very necessary. If their health was better they wouldn't be able to claim the full incapacity benefit. Booze = depression = incapable of working.

Lotus-eater

Wasn't the deal with NR, 95% of the house value a mortage and the other 30% a unsecured loan? So the 30% presumably would go on the std loan % rate ouch!

Mind you I might be talking bo**ocks here.

MissMoneypenny

mitchaa wrote: »

Y

But either way the parent still pays for them. (It's a little tax break if you like)

Anyway, childcare should be absoloutly free IMO. It's criminal some parents get it for nothing, but others have to pay for it.

I would rather give the tax breaks to the family where one parent becomes a full time parent, to look after their children.