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" Home Owners Have No Equity To Remortgage"

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http://uk.finance.yahoo.com/news/home-owners-have-no-equity-to-remortgage-tele-7a955045a94c.html?x=0

Home owners have no equity to remortgage
Myra Butterworth, 11:51, Wednesday 11 August 2010
Home owners have so little equity left in the homes after the credit crisis that they are struggling to remortgage, experts warned.
The latest lending statistics suggested the number of people who remortgaged their homes in June was just 27,000, down 20 per cent on a year earlier.
Ed Stansfield, chief property economist at Capital Economics, said: There is a sense that people have too little equity in their homes to be able to switch their mortgage, and even if they do have enough, there is little incentive to do so.

Cue: Evil genius laugh

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http://uk.finance.yahoo.com/news/home-owners-have-no-equity-to-remortgage-tele-7a955045a94c.html?x=0

Home owners have no equity to remortgage
Myra Butterworth, 11:51, Wednesday 11 August 2010
Home owners have so little equity left in the homes after the credit crisis that they are struggling to remortgage, experts warned.
The latest lending statistics suggested the number of people who remortgaged their homes in June was just 27,000, down 20 per cent on a year earlier.
Ed Stansfield, chief property economist at Capital Economics, said: There is a sense that people have too little equity in their homes to be able to switch their mortgage, and even if they do have enough, there is little incentive to do so.

Cue: Evil genius laugh

WHy do they need to switch? I would have thought their SVRs are quite low. Or, do they need to pay off their credit cards?

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There is a sense that people have too little equity in their homes to be able to switch their mortgage, and even if they do have enough, there is little incentive to do so.[/indent]

'Incentive' to switch? More like impossible to switch, especially at reset time; & wont that be fun :)

Whine, whinge, "the govt. should help us", they will cry.

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WHy do they need to switch? I would have thought their SVRs are quite low. Or, do they need to pay off their credit cards?

If they're coming off a fixed rate, do they automatically go on to the lender's SVR? Or does the lender look at their LTV, wince, and put them on a much higher rate? And if they don't like that rate and decide to try another lender, do all the other lenders look at their LTV, wince, and offer them the same or an even higher rate?

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If they're coming off a fixed rate, do they automatically go on to the lender's SVR? Or does the lender look at their LTV, wince, and put them on a much higher rate? And if they don't like that rate and decide to try another lender, do all the other lenders look at their LTV, wince, and offer them the same or an even higher rate?

LTVs are slipping daily. Banksters wil want to cover themselves for a 30-40% anticipated drop. :lol:

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If they're coming off a fixed rate, do they automatically go on to the lender's SVR? Or does the lender look at their LTV, wince, and put them on a much higher rate? And if they don't like that rate and decide to try another lender, do all the other lenders look at their LTV, wince, and offer them the same or an even higher rate?

My impression is the lenders can do whatever they like, which means unilateral changes to the T&C of the SVR. If you don't like it, you can change onto their fixed rates, or move to another provider. That is, if you have the equity to take the hit... hence why some people like the security of a short term fix.

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If they're coming off a fixed rate, do they automatically go on to the lender's SVR? Or does the lender look at their LTV, wince, and put them on a much higher rate? And if they don't like that rate and decide to try another lender, do all the other lenders look at their LTV, wince, and offer them the same or an even higher rate?

Indeed.

The sheeple will come to realise before long that when they revert to a punitive SVR rate after being hooked on the short term teaser rate, that there is frankly fvck all they can do about it! THE BANKS HAVE GOT YOU BY THE BALLS YOU IDIOTS!!

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Indeed.

The sheeple will come to realise before long that when they revert to a punitive SVR rate after being hooked on the short term teaser rate, that there is frankly fvck all they can do about it! THE BANKS HAVE GOT YOU BY THE BALLS YOU IDIOTS!!

Is it not the case that many banks SVR is lower than many of the fixes that are expiring? I seem to recall a while ago that some banks wouldn't offer SVR mortgages to new customers, preferring for them to take out a fixed rate instead. SVR is positively attractive to some - at least for as long as base is at its current rate.

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Is it not the case that many banks SVR is lower than many of the fixes that are expiring? I seem to recall a while ago that some banks wouldn't offer SVR mortgages to new customers, preferring for them to take out a fixed rate instead. SVR is positively attractive to some - at least for as long as base is at its current rate.

Yes, there are a few SVR's lower than current fixes, but SVR's really don't have any bearing on what the BoE base rate from what I understand. Also, how long do you expect SVR's to remain comparitively low to current fixes. IMHO, not very long.

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If they're coming off a fixed rate, do they automatically go on to the lender's SVR? Or does the lender look at their LTV, wince, and put them on a much higher rate? And if they don't like that rate and decide to try another lender, do all the other lenders look at their LTV, wince, and offer them the same or an even higher rate?

It depends on the details of the mortgage deal they signed up.

Generally though, borrowers automatically go onto the SVR - BUT the lenders usually have total free hand to set the SVR to be as high as they like.

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This is indeed terrible news.

How are bankers supposed to earn fees for transfers and closures if people dont transfer and close, and bankers are stuck with people getting a better rate on their new SVR?

Add in they gotta suck up the loss on their MBS they sold. Its tough for bankers...might have to cut the bonus a bit.

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This is indeed terrible news.

How are bankers supposed to earn fees for transfers and closures if people dont transfer and close, and bankers are stuck with people getting a better rate on their new SVR?

I doubt if they are stuck with that many people getting a better rate on the SVR. Once your fix comes to an end, all the lender has to do is say you haven't got enough equity to go on to any attractive SVR it may have available, and you'll have to take another fix at 4.3% (an example from C&G, 75% LTV, fixed for three years) or 5% (ditto, 90%, fixed for three years). You can look elsewhere if you want, but the chances are that at those LTV youu'll have to pay the same rate or higher to another lender anyway.

Remember, the story is about people with very little equity in their properties. As more than one poster has pointed out, the lenders are free to decide what LTV they fancy lending on, and at what rates.

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I doubt if they are stuck with that many people getting a better rate on the SVR. Once your fix comes to an end, all the lender has to do is say you haven't got enough equity to go on to any attractive SVR it may have available, and you'll have to take another fix at 4.3% (an example from C&G, 75% LTV, fixed for three years) or 5% (ditto, 90%, fixed for three years). You can look elsewhere if you want, but the chances are that at those LTV youu'll have to pay the same rate or higher to another lender anyway.

Remember, the story is about people with very little equity in their properties. As more than one poster has pointed out, the lenders are free to decide what LTV they fancy lending on, and at what rates.

or they might say you are going on SVR +4%...

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I doubt if they are stuck with that many people getting a better rate on the SVR. Once your fix comes to an end, all the lender has to do is say you haven't got enough equity to go on to any attractive SVR it may have available, and you'll have to take another fix at 4.3% (an example from C&G, 75% LTV, fixed for three years) or 5% (ditto, 90%, fixed for three years). You can look elsewhere if you want, but the chances are that at those LTV youu'll have to pay the same rate or higher to another lender anyway.

Remember, the story is about people with very little equity in their properties. As more than one poster has pointed out, the lenders are free to decide what LTV they fancy lending on, and at what rates.

It's usually stated in the terms of a discount or fixed rate mortgage what will happen at the end of the term of the mortgage. If it says you will go on the lenders' SVR, I can't see how they can refuse it. In many cases, it will be better anyway. My lender the Dudley BS still has an SVR of 4.99%. The fixed term loans 2 / 3 yrs ago were higher than that.

Edited by deflation

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Is it not the case that many banks SVR is lower than many of the fixes that are expiring? I seem to recall a while ago that some banks wouldn't offer SVR mortgages to new customers, preferring for them to take out a fixed rate instead. SVR is positively attractive to some - at least for as long as base is at its current rate.

Up until a few years ago, Nationwide customers essentially had a BOE+2% (max) lifetime tracker after their fix ended. This is what we will get when the fix expires.. it's causing them a bit of pain at the moment; that is their SVR, currently 2.5%.

Currently, if you take another fix, then you go back to their 'Base Mortgage Rate', currently 3.99%.

I suspect a bit of hard sell coming my way on this.

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Up until a few years ago, Nationwide customers essentially had a BOE+2% (max) lifetime tracker after their fix ended. This is what we will get when the fix expires.. it's causing them a bit of pain at the moment; that is their SVR, currently 2.5%.

Currently, if you take another fix, then you go back to their 'Base Mortgage Rate', currently 3.99%.

I suspect a bit of hard sell coming my way on this.

We are with Nationwide and if I remember correctly the BOE+2% only applies to mortgages taken out before a certian date although that date is fairly recent. IF i remember correctly later ones pay more.

Can't be bothered to dig out the paperwork to check at the moment..

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Up until a few years ago, Nationwide customers essentially had a BOE+2% (max) lifetime tracker after their fix ended. This is what we will get when the fix expires.. it's causing them a bit of pain at the moment; that is their SVR, currently 2.5%.

Currently, if you take another fix, then you go back to their 'Base Mortgage Rate', currently 3.99%.

I suspect a bit of hard sell coming my way on this.

What are the chances that, a few years down the line, Nationwide changes the (max) bit to something a little higher than +2%?

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What are the chances that, a few years down the line, Nationwide changes the (max) bit to something a little higher than +2%?

As I said above, I'm pretty sure that the +2% rate nly applies to mortgages taken out before a cartian date.

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What are the chances that, a few years down the line, Nationwide changes the (max) bit to something a little higher than +2%?

It's in the contract, IIRC. Must check..

As I said, it's not open to new customers, and, critically, if I took another fix then I'd lose the BOE+2% thing. Their 'Base Mortgage Rate' is 3.99%.

The only way out would be bankruptcy/collapse.

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It's in the contract, IIRC. Must check..

As I said, it's not open to new customers, and, critically, if I took another fix then I'd lose the BOE+2% thing. Their 'Base Mortgage Rate' is 3.99%.

The only way out would be bankruptcy/collapse.

Is the contract cast-iron? Or can/will Nationwide or any other lender change the terms as they please?

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Yes, there are a few SVR's lower than current fixes, but SVR's really don't have any bearing on what the BoE base rate from what I understand. Also, how long do you expect SVR's to remain comparitively low to current fixes. IMHO, not very long.

Nearly a year on and still at record lows. I think that it was Buffett that said that markets can stay irrational longer than you can stay solvent. Case in point - it's nigh on impossible to second guess markets.

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Another reason I've been advocating long term fixed mortgages.

Gives you longer to build up equity rather than need to remortgage after a couple of years when your property has devalued faster than your equity was built.

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Nearly a year on and still at record lows. I think that it was Buffett that said that markets can stay irrational longer than you can stay solvent. Case in point - it's nigh on impossible to second guess markets.

I think that it was Keynes not Buffett who made that remark.

Ironically, it is the the Krugmanites who are Austrians during the boom and Keynesians during the bust who are keeping the market irrational which will eventually result in many more people's insolvency than necessary.

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  • 276 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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