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gilf

Update On My Friend

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Some of you may remember a rather long reply I made to a post a few months ago about people mewing.

To be honest I haven't got the time to trawl through my posts to find it so in summary the situation was that a friend of mine purchased a while ago something like 96 or so at around £45K ish. Over the next 9 years he had built up debt after debt to the point he has mewed twice (along with various consolidation loans) to the point now where he has a £120K mortgage on a 2 bed flat.

The additional problem for him was during that time he was been made redundant twice, and on one of those occassions got a fairly hefty redundancy package. But the problem is he didn't use the money to pay off debt or pay his mortgage but used it on Holidays and the like (including an £8,000 trip on concord). He could do this because he had another job lined up. Both the times he has mew'd he has taken extra on top to go on holiday (he only goes first class).

Anyway rather than relay the whole story again, which I seem to be doing, the latest news (just had a phone call from him) is that he has been made redundant again. He has only been there 18 months but apparently is going to get a fairly good package, comparable in some part to the one he got when he was made redundant from his first job which he had been at for 16 years.

The whole point of this is that in terms of redundancy and paying a mortgage for 9 years he could have easily paid back the mortgage in full and now been at least safe in the knowledge he won't lose his house and could live on benefit's without too much hassle while he looks for his next job.

But he now finds himself in £120K of debt, with what should be a small fortune in redundancy money but in comparison to his mortgage is now a pittence.

It took him a long time to find a job last time he was made redundant and I can't see being made redundant 3 times in a little over 4 years as good for your CV.

I'm not posting this to gloat or to ridicule him, he's a very close friend. But simply to highlight what a seriously big problem many people in this country could be in at the drop of a hat.

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I have always been staggered at the percepetion of their own wealth that these repeated Mewers claim.. (mortgage Equity Release..)

Each time I would be faced with someone bragging about their new car, new kitchen.. etc.. and about the extra equity their house had.

The thinking seemed to go like this. (example)

I bought a flat in 1997 for £45,000

I am £45,000 in debt.

In 2002 it is worth £110,000 and I now have an £80,000 mortage but I am £30,000 in credit

in 2004 it is worth £145,000 and I have a £100,000 mortage and I am £45,000 in credit.

So they have owned a property that cost them £45,000 that they now owe an extra £55,000 on and they consider themselves to be better of.

£45,000 of credit, if they sold at peek.

The perception must change..

Now in 2005 the same flat might get £130,000 if it sold.

Still a lot and more then they owe.

But do they now cosider themselves to:

Owe £100,000 and be £15,000 worse of then a year ago and perhaps a little concerend that the peek 2004 prices never really existed at the point of sale and that prices are dropping.

To the Mewer where does the perception of wealth disapear to be replaced by the reality of debt?

or do they still consider themselves to have £30,000 of credit?

and many mewers expecting further rises kept remortgaging to the value of their homes.

a friend bought in about 1995 and paid of his mortgage in 2003 and now works behind a bar and is happy as a pig in pooh..

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a friend bought in about 1995 and paid of his mortgage in 2003 and now works behind a bar and is happy as a pig in pooh..

V.nice :)

Pay off the debts, get an enjoyable stress free job and get on with life the way it should be and not be a wage slave....sweet

Edited by Ritters

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I could start a thread about all my tenants who instead of saving the remainder of their salaries and profits from business spent everything after rent on consumption. Whats the diff?

...and how the hell would you know exactly what they earn, how much they spend and how much is left at the end of each month or not?

Are you by chance admitting to the installation of certain electronic devices during your sundry refurbishments? Is this the real reason why you go to the trouble and expense of converting the lofts you were bragging about a couple of months back?

http://www.flyonthewall.uk.com/

Is your favourite film Sliver? http://movie-reviews.colossus.net/movies/s/sliver.html

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...and how the hell would you know exactly what they earn, how much they spend and how much is left at the end of each month or not?

Are you by chance admitting to the installation of certain electronic devices during your sundry refurbishments? Is this the real reason why you go to the trouble and expense of converting the lofts you were bragging about a couple of months back?

http://www.flyonthewall.uk.com/

Is your favourite film Sliver? http://movie-reviews.colossus.net/movies/s/sliver.html

Maybe he is a cult leader and controls their every move? No wonder he claims to have good yields - he has direct access to their bank accounts and takes 50% of take home pay in cult membership fees. :)

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This thread has very little to do with house prices & very much to do with peoples bad habits.

I could start a thread about all my tenants who instead of saving the remainder of their salaries and profits from business spent everything after rent on consumption. Whats the diff?

Maybe right there, but you seem to use the main forum to push your agend (many of you posts have about as much to do with house prices) so I have done the same. :)

The point is that there are plenty of people out there who have mew'd themselves into a totaly inflexible position. This will only increase the number of people being forced to sell their homes when it all goes tit's up.

Edited by gilf

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Maybe right there, but you seem to use the main forum to push your agend (many of you posts have about as much to do with house prices) so I have done the same. :)

The point is that there are plenty of people out there who have mew'd themselves into a totaly inflexible position. This will only increase the number of people being forced to sell their homes when it all goes tit's up.

It’s just that, you touched a nerve. :ph34r:;)

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I know someone who owes 180K on a flat she spent 48K to buy. She also got made redundant and is now living off the good will of her boyfriend. I really don't know how long that is going to last, and I think she is going to be getting a good wiff of the curap if shes forced to smells the roses.

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Guest Bart of Darkness
...and how the hell would you know exactly what they earn, how much they spend and how much is left at the end of each month or not?

Because they are his creations. He made them up (like an author) so of course he knows everything about them. They are his best friends and tell him what to write on these forums (or is that the voices in his head).

:lol:

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I know someone who owes 180K on a flat she spent 48K to buy.  She also got made redundant and is now living off the good will of her boyfriend.  I really don't know how long that is going to last, and I think she is going to be getting a good wiff of the curap if shes forced to smells the roses.

crikey. she must be a good shag for that amount

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One way in which this may affect house prices is that the "floor" under which people will not accept an offer may be higher than the original price. This may be why we have seen the stand off lasting longer than some of us expected.

Of course a mortgage company won't have the same floor if they repossess, at least not if it fails to meets the reserve a couple of times.

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As a matter of interest, do people in negative equity ever sell? or are they only ever repossessed?

If the former, are there any dangers for the buyer? The standard contract talks about all charges on the property being discharged, and in a "normal" house sale, some of the purchase price goes to pay off the mortgage. But in a negative equity situation, there isn't enough money for this. So presumably either the vendors come up with the extra cash, or....?

Peter.

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As a matter of interest, do people in negative equity ever sell? or are they only ever repossessed?

If the former, are there any dangers for the buyer? The standard contract talks about all charges on the property being discharged, and in a "normal" house sale, some of the purchase price goes to pay off the mortgage. But in a negative equity situation, there isn't enough money for this. So presumably either the vendors come up with the extra cash, or....?

Peter.

If your in negative equity you can't sell unless the secured lender agrees to release their charge. During the last crash some lenders let people in this position transfer the shortfall onto their next property effectly lending up to 120%. There were also loads of cases where lenders refused to allow sales to go though because they would have lost £5-10,000 and a few months later repocessed the same properties selling them off for £40-50,000 less than the mortgage. The lenders then sold those debts on to debt collectors who popped up to pursue the debts years later when people had rebuilt their lives.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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