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BBC - Negative Equity, have your say.
Comments
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ok so thoretically i bought my house say last january (2007) for 200k my mortgage is 1k a month, my house is now worth 150K i dont need to move there are no real signs of a recession, how does negative equity affect me? i agree it does affect some people but its not the worst thing in the world surely as long as you can still afford to pay your mortgage its not a major problem (albeit far from ideal).
He means for those that come to the end of their fixed deal and are unable to get the same rate again. They might not be able to afford the higher rates0 -
ok so thoretically i bought my house say last january (2007) for 200k my mortgage is 1k a month, my house is now worth 150K i dont need to move there are no real signs of a recession, how does negative equity affect me? i agree it does affect some people but its not the worst thing in the world surely as long as you can still afford to pay your mortgage its not a major problem (albeit far from ideal).
Except that there are right now real signs of a recession and even if there weren't, you never know when your circumstances will change.
Really, how on earth can being (tens of) thousands of pounds in debt with nothing to show for it ever be nothing to worry about?
(Never mind the impact that it has in terms of being tied down thanks to an unsellable asset.)
Are people that blase about debt after so many years of cheap credit and economic good times? Prepare for a dose of reality.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
:rolleyes: WADR, what planet are you on?
How is suddenly discovering you need to find an extra £200 per month (which you can't afford) to pay your mortgage "not a bad thing"?
How is suddenly discovering you're out of a job and unable to pay your mortgage "not a bad thing"?
The want/need to sell your house doesn't come into it. :rolleyes:
Rob
sorry how is his fixed rate ending affected by negative equity? maybe he should have thought about that before he took that mortgage on (although i do have sympathy)
is he out of a job? i cant see that, is he going to be? - maybe, maybe noti am new to this investing business and value peoples experience/opinions as a learning tool - thank you0 -
Except that there are right now real signs of a recession and even if there weren't, you never know when your circumstances will change.
Really, how on earth can being (tens of) thousands of pounds in debt with nothing to show for it ever be nothing to worry about?
(Never mind the impact that it has in terms of being tied down thanks to an unsellable asset.)
Are people that blase about debt after so many years of cheap credit and economic good times? Prepare for a dose of reality.
How come HPI is only paper money and not worth anything, but NE means debt?
People can, and will survive NE0 -
ok so thoretically i bought my house say last january (2007) for 200k my mortgage is 1k a month, my house is now worth 150K i dont need to move there are no real signs of a recession, how does negative equity affect me? i agree it does affect some people but its not the worst thing in the world surely as long as you can still afford to pay your mortgage its not a major problem (albeit far from ideal).
:rolleyes:
You're doing that black & white thing again!
Get in the REAL world! This forum is about what's happening RIGHT NOW, not some dream world where house prices are falling by 3.3% a month but the rest of the economy is all fine and dandy. :rolleyes:
You can't have one without the other. If property is going into negative equity then something has triggered it and in all the past cases I can recall it's been a !!!!ed economy, just like RIGHT NOW. Lending interest rates are going through the roof ( = extra £££ for you to find come remortgage time) and employment is hitting the deck ( = job insecurity = possible jobless = unable to pay mortgage = !!!!ed).
Are you getting this yet? :rolleyes:
Rob0 -
sorry how is his fixed rate ending affected by negative equity? maybe he should have thought about that before he took that mortgage on (although i do have sympathy)
is he out of a job? i cant see that, is he going to be? - maybe, maybe not
:huh:
Are really this stupid? Please go and do some reading on how these things work before coming out with stupid comments like that ^ . I can only assume you are some kind of wind-up merchant and therefore am not even going to bother explaining it. :rolleyes:
Rob0 -
Except that there are right now real signs of a recession and even if there weren't, you never know when your circumstances will change.
Really, how on earth can being (tens of) thousands of pounds in debt with nothing to show for it ever be nothing to worry about?
(Never mind the impact that it has in terms of being tied down thanks to an unsellable asset.)
Are people that blase about debt after so many years of cheap credit and economic good times? Prepare for a dose of reality.
you are quite right you do never know about your circumstances changing and as i clearly state YES IT DOES AFFECT SOME PEOPLE who i have sympathy for but my point is none of you (or me) know what the future holds people in this country love to look at the doom and gloom aspect of it all especially when it doesnt directly affect them, the press also love it and contribute enourmously to the problems so people say "OMG my house is worth less than i paid for it - what am i going to do? answer can you still afford your mortgage payments? if so then carry on paying and stop panicking.
It is something to be aware/concerned about yes but what can you do? - nothing.
I am not blase about debt far from it i live within my means but i am also realistic and dont worry to much about what i cant change.i am new to this investing business and value peoples experience/opinions as a learning tool - thank you0 -
:huh:
Are really this stupid? Please go and do some reading on how these things work before coming out with stupid comments like that ^ . I can only assume you are some kind of wind-up merchant and therefore am not even going to bother explaining it. :rolleyes:
Rob
thanks for that :beer: i appreciate interest rates are affected by the crisis we are in but interest rates are variable anyway at the best of times they are hardly that high at the moment are they? anyway if you dont want to explain to me then dont, at least i havent been rude to you.i am new to this investing business and value peoples experience/opinions as a learning tool - thank you0 -
How come HPI is only paper money and not worth anything, but NE means debt?
People can, and will survive NE
You're in debt even if you have equity - it's just that your assets (essentially, the house) cover it should that debt ever be called in or should you find yourself unable to service the debt.
Negative equity means that your books don't balance. Considerably more serious than carrying some debt which is offset by assets, as being unable to service the debt equals likely repossession and possible bankruptcy.
Even if you carry on in a 'safe' 'recession proof' job (It's funny how people who have no concept of the perils of debt always seem to have these sorts of mythical superjobs when pressed on the matter) it certainly means you will have a hard time selling the house which is bad news should your circumstances change and a sale of house is desirable or necessary.
It's also very bad news should a mortgage deal come to an end and you need a new one, as the new one will almost certainly come with a much higher interest rate attached, leaving you in financial do-do even if previous repayments were affordable.
In short, negative equity is very bad news indeed and has the potential to be financially disastrous if circumstances change
Carrying on as if nothing were amiss, fingers in ears going 'la la la' is naivety, bordering on recklessness. If I were in a NE position I'd be saving like crazy to make sure I could remortgage at a decent rate or to cover payments for six months should I lose my job.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
!!!!!! i agree with what you are saying saving up is a very good idea you do have to adjust your attitude, also ok maybe you are not in NE today but in 3 months you may be so basically its time to stop spending on non essentials.
The point i was attempting to make although Snooze appeared to have missed it was that yes it can be a bad thing but its not the end of the world essentially you have not lost money unless you need to sell, yes the value at that point of your house has dropped but if you are not selling then it should/can be manageable. (all in my stupid opinion) :rotfl:i am new to this investing business and value peoples experience/opinions as a learning tool - thank you0
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