First time buyers

[Uncle Spielberg]

Much they won't get an SVP or any mortgage, if they property is worth 200k and they need to borrow 250k to clear their old mortgage. That's why 100% and over mortgages at a time the market was over priced, was boarding on criminal.

Your not getting it. Even if the property is now worth less than the mortgage with their present lender they will go onto the SVR. They do not have to find any shortfall. Its called negative equity.

 

[drew]

Your not getting it. Even if the property is now worth less than the mortgage with their present lender they will go onto the SVR. They do not have to find any shortfall. Its called negative equity.

I think the problem is that some people believe you have to remortgage at the end of your fixed/discounted period and forget that they have actually signed up to a mortgage for 20/25 years. Negative equity is not a problem provided a) you don't have to move and b) you can afford the existing repayments.

 

[Uncle Spielberg]

Correct.

 

[Blue&WhiteSea]

Might be worth asking them if you can switch into a fixed rate at any stage.

That was the original plan but then they changed all of their existing customer rates from 90% max to 85% max so I think I may be stuck now. Could be worse we are still getting 4.49% which is pretty good when you consider there are no fees and no early repayment charge.

 

[Del Boy]

In the red corner we have Mr Burns, a first time buyer who is unaware of SVR's and think property prices will drop 40-50%... In the blue corner we have Uncle Spielberg, a fully qualified Independant Financial Adviser with <insert years> experience...

It's pretty easy to work out who knows what they are talking about.

 

[The Merry Prankster]

In the red corner we have Mr Burns, a first time buyer who is unaware of SVR's and think property prices will drop 40-50%... In the blue corner we have Uncle Spielberg, a fully qualified Independant Financial Adviser with <insert years> experience...

It's pretty easy to work out who knows what they are talking about.

Not so fast. Try re-reading some of US's wildly over optimistic posts from last year.

 

[dannyboy]

Not so fast. Try re-reading some of US's wildly over optimistic posts from last year.

and weather predictions

 

[dannyboy]

and betting tips

 

[Mr Burns]

In the red corner we have Mr Burns, a first time buyer who is unaware of SVR's and think property prices will drop 40-50%...

Well lets revisit this post at the end of the year, and see how much house prices drop January-December.

 

[Mr Burns]

This was in response to Bushy's post and scenario

I thought the thread was about First Time Buying. My mistake

 

[Mr Burns]

Firstly why do you keep referring to me as a Mortgage Brooker ?

A?

 

[Mr Burns]

I think the problem is that some people believe you have to remortgage at the end of your fixed/discounted period and forget that they have actually signed up to a mortgage for 20/25 years. Negative equity is not a problem provided a) you don't have to move and b) you can afford the existing repayments.

Thanks you for clearing that up. I sort of knew that, but was lead to beleive this was not the case in all instances. Also I head some lenders were only offering ridiculous rates for exisiting borrowers with negative equity when they come to remortgage, therefore in many cases pricing exisiting borrowers out of the market, and onto another lender.

I don't think the banking crisis is close to being over yet, despite the stock market in the sector raising over 200% on some shares in the past month. (which is where a big chunck of my deposit come from!!) I also believe there will be a panic in the market at some point this year, which will see prices plumet. That's my hunch.

To be honest I don't pay much attention to Finanical advisors. Wouldn't give them the time of day. Everyone I've ever met, told me to get a pension from the day I left school, and to be fair most pensions are worth about as much as a sheet of bog paper.

As for me, I go along my merry way knowing that with a great deal of luck, I've turned 20k into 75k in less than three months, buying and selling bank shares. There's probably thousands more to be made if you pick the right ones, but after another sizeable jump this afternoon, my bollocks shrunk, and I sold them all. No doubt certain ones will continue to rise but my deposit has grown from 25k to around 80k, so I aint pushing my luck any further!!

In fact I would love to see the Bank shares have another crash!!

 

[Bozza]

Well lets revisit this post at the end of the year, and see how much house prices drop January-December.

Regardless of what house prices do, you've proven very well you know very little about mortgages.

I heard a radio show today who were peddling the same mistake as you. They recalled a story they'd covered 18 months ago of a young couple who took out a 110% mortgage to buy their first home, and they went back to speak to the same couple due to the fall in property prices.

This couple were saying that because house prices had fallen so much, they were in negative equity. They then went on to say that this means they can no longer afford any luxuries in life, and that they were working all the hours they could in order to pay the bills etc.

Like you, they were drawing a direct line between the fall in property prices and their predicament. Which, of course, is complete bollocks. It doesn't matter a jot what a house is worth unless you want/need to sell it.

If these folk are struggling to keep their heads above water, it has nothing to do with the value of their house. It may however have something to do with the mortgage they took out, but I have no idea as the report skipped over that important detail.

 

[Mr Burns]

Regardless of what house prices do, you've proven very well you know very little about mortgages.

f*** me I said that above didn't I. But as I say, lets see what house prices do this year, because my whole point, was I have spoken to bank personel, property developers, and they reakoned house prices are in for a 40-50% fall this year!

I for one think its far bleaker out there then most think, but as I said, time will tell.

 

[acrossthepond]

I disagree. Estate agents had their best sales for 2 years last month.

Yes they did - but still 60% lower sales overall than at the bottom of the previous housing bubble burst so the growth is from a very low base.

Also, it's a single month's figures - so at the moment it's a spike, not a trend.

 

[Uncle Spielberg]

Yes they did - but still 60% lower sales overall than at the bottom of the previous housing bubble burst so the growth is from a very low base.

Also, it's a single month's figures - so at the moment it's a spike, not a trend.

Fair comment. The shift is now cash buyers. With investment rates being diddly squat people with cash are now looking at property again as a good medium/long term investment. Mortgage approvals were up 4% in fed, whoopy doo but we are 24000 around a third of the 5 year average monthly mortgage approvals of 70000 and 24000 is nowhere near enough to have a fluid and effective mortgage/property market. The housing market will not shift or turn until lenders actually decide to lend again and not just cherry pick and chase the tasty 60% loan to value clients.

 

[Tom Hark Preston Park]

As for me, I go along my merry way knowing that with a great deal of luck, I've turned 20k into 75k in less than three months, buying and selling bank shares. There's probably thousands more to be made if you pick the right ones, but after another sizeable jump this afternoon, my bollocks shrunk, and I sold them all. No doubt certain ones will continue to rise but my deposit has grown from 25k to around 80k, so I aint pushing my luck any further!!

Good effort!

 

[WATFORD zero]

I hope for your sake that you are right on this US, but i still believe that there are a lot of people out there who still have far more credit than they can afford, (housing being a major part but not the complete issue).

They are currently keeping their heads above water by the reduction in interest rates, but i think we all know that these rates are relatively temporary and when interest rates move again to stop increasing inflation, there will be another bout of pain. I really think that until we have been through that pain and the credit levels are back to a more sustainable level, we won't see any significant growth. Unfortunately, not enough people have gone to the wall yet.

I read a report from the motor industry blaming the banks for destroying their industry by not giving enough credit for people to buy cars. Am i really the only person who buys their car in cash and doesn't commit to some long term credit deal ? I think it might be my age, but why don't people earn money first and then spend it.

As i say, i think you come across as being a straight person and i hope that you find more business this year. I will be looking at investing in more property, but can't see it being this year and possibly not next.

 

[ridda]

Some of you lot still don’t get it, property as an investment is finished.
House prices will not get back to where they were in 2007 till 2020 something
and if you allow for inflation you will be losing money, we all need to get back to thinking of a house as somewhere to live.

 

[Uncle Spielberg]

Some of you lot still don’t get it, property as an investment is finished.
House prices will not get back to where they were in 2007 till 2020 something
and if you allow for inflation you will be losing money, we all need to get back to thinking of a house as somewhere to live.

2020 ?. I would say 2012.