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bertie

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Everything posted by bertie

  1. I remember reading that there's so much Chinese money in the US system that if they decided to get organised and move it around strategically to cuase the worst damage they could potentially damage the US economy. Given that the said economy is now looking decidedly shaky, they clearly have the ability to do some fairly big damage. I'm the first to admit that I'm a little light on hard facts here. I'm looking to see if others can substantiate or dismiss this possibility. If you work on the worst case, we may well see a return of manufacturing to the UK, only it'll be the kind that makes crappy plastic toys for the wealthy Chinese kids to play with! Bertie
  2. It would seem HPC is not only a source of financial wisdom but also dietary advice. Perhaps Nigella's followup to Nigella Express should be Nigella Repossessed - how to live in Chelsea on a dollar a day.
  3. I found this story on CNN. There are 20+ stories here which are grim reading. As you click through the various acounts of the financial strain these people are under you may see a number of parallels wih some people in the UK. I don't take pleasure from reading any of this. It'll proably have different nuances in the UK but I expect a simlar situation to arrive here some time in the next twelve months. Bertie
  4. I like the concept of Net Present Worth. In other words tot up you debts, savings and assests and this is your total worth. If you have equity you will have a positive net worth in most cases. I consider the idea of saving as not spending some money so that it goes to improve my NPW. Whether the money is put under the bed or used to pay down my mortgage is not really an issue provided I can still access this money with similar convenience (liquidity) that would be similar to a more traditional savings product. I currently have the maximum Cash ISA allowance in the NS&I account which pays more than my mortgage rate and the rest is in the mortgage. On thing which might be worthy of debate is how easy it would be to withdraw overpayments if your financial circumstances changes. Strictly speaking, if you were unemployed or long term stick you should tell your mortgage and they may get a bit twitchy if you were to be drawing down large amounts with no obvious mean of repaying. So I think it's probably wise to retain a small amount in non-mortgage savings and use the rest to reduce your debt. BTW, my mortgage is a normal tracker and I utilise the 500 pound per month overpayment facility. I think the badged offset mortgages offe less attractive rates which only really make sense if you have earnings which can vary widely and you need the flexibility to pay in sporadic chunks. Bertie
  5. OMG, it's so cringeworthy. They just did a bit where they had pictures from viewers. "Here's the lovely view from my cottage." Oh FFS, does the nation give a toss? This is possibly the worst live TV since Sam Fox and Mick Fleetwood did the Brit Awards.
  6. I see a lot of stuff about stagnation of the market. I'm not sure it's going to be that benign. When sentiment was high up until a few months ago we were seeing people readily paying the asking price and in some hot areas they were often going 5% over the top be sure to bag a sale. Now the sentiment has shifted you start to hear talk of bid and chip (gazundering) and start to here the chattering classes talking of buyers putting in silly offers. For example I know a forced seller who got asked to drop their price a further $7K after the initial deal had already been struck. Based on the above, I'm expecting the initial drop to be quite sudden as the market flips from paying a premium to seeking value discounts. Anybody else seen this kind of flip going on locally or got a view on this? Bertie
  7. To be honest Phil has always been pretty balanced in his commentary. It's Krusty who's a bonkers bull.
  8. How about: Your country may be repossessed if you do not keep up repayments.
  9. You make a good point. I can see this being the case for many people, especially if the house has taken a long time to find. On the flipside, the risk is always that if just one of the chain is not emotionally involved in the purchase, perhaps a BTL person the whole chain security is lowered to this denominator.
  10. My friends are in a chain of eight movers. They're in the upper third of the chain. It's been about two months since they jumped in and others may have been in the chain longer. Here's the some things I think make the existing chains very vulnerable: 1. If they're progressing slowly you might need to reapply for you mortgage offer as they do eventually expire. Poorer terms on new application. 2. Your bank may choose to re-evaluate their in-principle offer and decline you before the point of no return for the sale. 3. At least one person in the chain may read the headlines and run for the exit, writing off the sunk costs! This hasn't happened to my friends, but I see it as a real possibility. While it will frustrate them terribly it just might work out in their favour if the predictions come to fruition! Anybody else think chain breakdown is also going to slow the market more rapidly than you'd expect as one buyer pulling out scuppers five or more other transactions?
  11. Dear NR - remember to read the small print: Your bank may be repossessed if you fail to keep up repayments on it.
  12. My cash preservation plan has been to pay all my liquid cash bar a little bit for contingency into my mortgage. As my Net worth is about £60K debt I figure this is my best protection against both interest rate moves and market moves. Anybody any views on this?
  13. I wasn't buying your point but the really large letters have convinced me you must be right. If there's anybody else you haven't won over, I can recommend the caps lock key. I'm off to another thread. Bye.
  14. Your OP is based on the hypothesis that we have a shortage and this has driven rents up to an abnormally high level with respect to wages. There should be some visible trends if this is the case. If I were you I'd be really grateful to somebody posting some data that may support my point, especially given the hard time you're having convincing some of the other posters here. I can see some value in investigating what you propose further as it may have some merit. Let's use the combined wisdom on the forum to see if it does. There are some very bright people here who can find all sorts of statistics that are useful.
  15. APR is actually not always the best way to compare products if you do not plan to keep them for the full term. For example, I've got one of the Nationwide tracker mortgages. Mine is at 6.78%. To calculate my APR they work it on two years discount plus the remaining 23 at the base rate. So, the APR ends up being pretty close to the base rate. However, few people run their mortgages at the base rate unless they need real flexibility to come and go as they please. Most would renew with a tie in. Where this gets interesting is when you have loans with fees attached. These are upfront and the APR looks identical whether you have the fee version or the fee free version. Does it matter which one you choose? The answer is yes. If you assume your deal will run for only the discounted period, you have 24 months of payments to consider. After this the rate is identical. On a £100,000 loan, the monthly payments during the discount period at 5.68% would be £473.33. To this add one twenty fourth of the fee, i.e 499 divided by 24. The monthly equivalent of interst and fee comes to £494. The same loan, fee free gives a monthly payment of £507, £13 more than the fee based one. In this case the fee based one is cheaper over the two year discounted period The opposite is true if you had a much smaller loan of £40,000. In this case the fee based monthly equivalent comes to £210 which is £7 more than the non-fee based product. For info, the breakeven point on this product is a loan capital of just over £62K. Now, I'll admit that I've not factored in the interest I could earn on the £499 over the two years in the non-fee example. It might make a difference in you're in the region of the crossover point but if you're at the upper or lower values given in this example, it wouldn't change the outcome. Conclusion: APR is helpful but is not the golden bullet that allows you to cross compare two loans unless it has been calculated taking the capital and the term into account.
  16. Thanks. I guess to be fair, housing cost can only be rent or IO mortgage as repayment is not a cost as such.
  17. Is this 30% of take home pay an established rule of thumb ratio? How does the UK ratio compare to other Western European countries? Anybody got any hard data to support this discussion?
  18. Have you considered renting a car rather than buying?
  19. Yep, I agree. I vote because I fear the alternative party or wish to punish the party I'm not voting for! Both are negative reasons. It a lesser of the evil thing with me, I'm afraid. I really don't like what NuLabour has amounted to after ten years although I will admit to voting for them the last three times. I have voted Tory in the past and consider myself a floating voter. The party who wins in the middle swing vote area is the one least feared of least hated. I fear the tory leadship and hate NuLabour. How will I decide?!
  20. I remember a quote which went some thing like "Elections are not won by the opposition, they are lost by the party in power." From the moment you take the reigns of power everything you do is judged. Things going wrong are a fact of life but the cumulative effect of ten years of NuLabour has meant the have accumulated quite a bit of toxic baggage. If the economy goes wrong now, it could be curtains for them. Only thing that might save them is Cameron's persona. David Davies would have had a much broader appeal. Despite being very unhappy with NuLabour I'm not confviced I could vote for Cameron. Bertie
  21. I didn't see the programme, but it's a shame if that's all that was covered. Try the MSE website You'll find advice on lots of everyday purchases and how to extract the best value from them. There's no shame in shopping around for a great deal. I do it a lot now. Knowing where to look is the key. When my wife stopped working when our first child came along we took at 30% drop in income but closer to 60% drop in disposable 'fun money'. What shocked us was that we could get by reasonably comfortably on much less than we used to have. Some things had to give but with a little prudence and effort we cut our outgoings considerably. If I'd applied similar restraint in my twenties, I'd be quite a bit wealthier and probably not any less happy! One of the key thing MSE does is take the lid off the scams pulled by various companies. For example, transfering a credit card debt to 0% card is only a good idea if you then don't use that card. This is because any payments you make on most cards pay off the debt with the lower interest. So, say you move 10K to a card then spend 1K on something else, you'll have to clear the interest free 10K before you can clear the 1K. In other words, you'll be forking out on that 1K for a very long time. Bertie
  22. There are certainly landlords who are paying no interest on the rental income. These are the ones who are making a loss. Where the management and interest costs equal the IO payments, you are liable for no tax at all. A guaranteed tax avoidance scheme. This type of landlord is on the increase.
  23. I believe you've just rediscovered the benefits of the offset mortgage where you pay no tax as long as you are net in debt (i.e. most people!). I'm a big fan of saving this way rather than using cash based savings. Comparison with equities is a little more difficult as I believe that historically these ought to outperform the mortgage offset returns over time. Despite the possibility of a long term win, I've just pulled all my stock market based savings to plough into the mortgage and reduce my exposure to what might be a bumpy period of high IR's and stock market fluctuations. Time will tell if this was a good move or not.
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