Jump to content
House Price Crash Forum
Johnny Storm

People Are Still Re-Mortgaging And Taking Out Equity

Recommended Posts

Work with this lass, she is single , two kids below 8 years, no husband, doesnt earn much.

I know she has been getting a new mortgage deal (I thought to reduce costs). Today she is all smiles and happy, the deal is going through. I say I dont know why you are so happy, its not like you are moving. Turns out she is getting extra money to put in a new kitchen and other treats.

Everyday people still dont get it, and these are the sort of people you will be competing against when it comes time to buy your own home.

Its never been the banks fault, although admittedly they helped, it was actually the stupid stupid people we all live amongst who thought it was fine to take out 6 times their earnings.

Share this post


Link to post
Share on other sites

Work with this lass, she is single , two kids below 8 years, no husband, doesnt earn much.

Turns out she is getting extra money to put in a new kitchen and other treats.

Yeah, but according to TVs Kirsty it'll triple the value of her home.

Speculate to accumulate and all that.

Share this post


Link to post
Share on other sites

Without knowing all the figures, it may not be all that daft. Perhaps her mortgage was only 2 x wages before, having been left a house with a low mortgage in a divorce settlement? Is she re-mortgaging after a promotion?

It's constant MEWing that can cause trouble. Some people go so far into debt that they are using the money they took out to meet the interest payments. It delays the inevitable if they get laid off.

Is her kitchen knackered? Probably not, you know, women.... :ph34r:

Share this post


Link to post
Share on other sites

Imo it's all just part of the economic food chain. If the average person on the street was as financially savvy as most on here we'd be kippered, even moreso! (if that's possible).

Share this post


Link to post
Share on other sites

It's incredibly how some people think it's free money...

Two sprogs, not high earnings ....

It is free money under the regime we've become accustomed to ... well, to an extent since 1945, but particularly since about 2000.

Share this post


Link to post
Share on other sites

Its never been the banks fault, although admittedly they helped, it was actually the stupid stupid people we all live amongst who thought it was fine to take out 6 times their earnings.

The entire point of banks is to stop stupid people from borrowing money they can't repay. If stupid people are borrowing money they can't repay it is the fault of the banks.

If the banks are free to shift the risk of default off their books, and therefore don't care about whether the debt is repaid or not, then we get a global financial meltdown.

This was the fault of the banks - all this right wing noise that pins the blame on the stupid borrowers is a pathetic rewriting of history.

Share this post


Link to post
Share on other sites

Everyday people still dont get it,

You should help her. Make comments like, you've still got that car then? A new Beetle soft top would really suit you! Etc.

Share this post


Link to post
Share on other sites

Work with this lass, she is single , two kids below 8 years, no husband, doesnt earn much.

I know she has been getting a new mortgage deal (I thought to reduce costs). Today she is all smiles and happy, the deal is going through. I say I dont know why you are so happy, its not like you are moving. Turns out she is getting extra money to put in a new kitchen and other treats.

Everyday people still dont get it, and these are the sort of people you will be competing against when it comes time to buy your own home.

Its never been the banks fault, although admittedly they helped, it was actually the stupid stupid people we all live amongst who thought it was fine to take out 6 times their earnings.

Friend A: House value approx £350K - bought approx 1990 - outstanding mortgage £25K

Friend A's neighbour: House value approx £350K - bought approx 1990 - outstanding mortgage £250K

Go figure.......................

Edited by oldbaginaonebed

Share this post


Link to post
Share on other sites

Friend A: House value approx £350K - bought approx 1990 - outstanding mortgage £25K

Friend A's neighbour: House value approx £350K - bought approx 1990 - outstanding mortgage £250K

Go figure.......................

Bet they are both making similar monthly mortgage payments....has the neighbour only the one property?

Share this post


Link to post
Share on other sites

She does get those, as was happy to see that they werent being reduced for people in her "situation."

Does anyone know where the feckless father is? Problem isn't just the women but the men who won't own up to their responsibilities.

Share this post


Link to post
Share on other sites

She does get those, as was happy to see that they werent being reduced for people in her "situation."

...all put down as income on the application which generates a healthy commission for the broker....who does the credit risk...?....or is that just put down as safe with worst case scenario being repossession....and keep the commissions rolling.... :rolleyes:

Share this post


Link to post
Share on other sites

You seem to know most of her details, put those and some anonymous stuff in to see how much she gets:

http://taxcredits.hmrc.gov.uk/Qualify/DIQHousehold.aspx

You could be appalled.

Im not appalled or surprised, but according to that website she would get:-

Child tax credit, £3346.44

Working tax credit, £1324.68

Total £4671.12

I based on her being paid £13k a year. I still think some condoms would have been cheaper.

Share this post


Link to post
Share on other sites

Im not appalled or surprised, but according to that website she would get:-

Child tax credit, £3346.44

Working tax credit, £1324.68

Total £4671.12

I based on her being paid £13k a year. I still think some condoms would have been cheaper.

Is that all? When I discovered that calculator recently I went through it as a 22yo, no spouse with 2 kids and ended with £10,950

Share this post


Link to post
Share on other sites

Im not appalled or surprised, but according to that website she would get:-

Child tax credit, £3346.44

Working tax credit, £1324.68

Total £4671.12

I based on her being paid £13k a year. I still think some condoms would have been cheaper.

Do you know how much they are lending her? Cos I struggle to see how she can make ends meet with two kids on 18k a year gross.

Share this post


Link to post
Share on other sites
who does the credit risk...?....

Tax credits means she's good for £40k a year if she's got kids, 5x earnings means she can borrow up to £200k for nothing.

Share this post


Link to post
Share on other sites

Do you know how much they are lending her? Cos I struggle to see how she can make ends meet with two kids on 18k a year gross.

No I dont. Wont she get another chunk of child benefit on top of that? I do live up north, so depending on when she bought it could be quite a cheap property.

Share this post


Link to post
Share on other sites

Work with this lass, she is single , two kids below 8 years, no husband, doesnt earn much.

I know she has been getting a new mortgage deal (I thought to reduce costs). Today she is all smiles and happy, the deal is going through. I say I dont know why you are so happy, its not like you are moving. Turns out she is getting extra money to put in a new kitchen and other treats.

Everyday people still dont get it, and these are the sort of people you will be competing against when it comes time to buy your own home.

Its never been the banks fault, although admittedly they helped, it was actually the stupid stupid people we all live amongst who thought it was fine to take out 6 times their earnings.

Wrong. People's behaviour is very similar, anywhere, any time. If/when interest rates are low, people will borrow more, and when interest rates are high, they borrow less. It is the job of monetary policy to control that. This crises was caused by a credit/debt/assets prices bubble, caused by interest rates being kept too low for too long, thanks to Gordon Brown tampering with the inflation index in 2003, forcing thus the BoE to keep interest rates too low. It is not the people's job to know high finances or economics. It is unrealistic and hence unfair to expect that from any people. It was mainly Gordon brown's fault.

Share this post


Link to post
Share on other sites

It is unrealistic and hence unfair to expect that from any people. It was mainly Gordon brown's fault.

Although I despise Brown as much as the next person, if it was the banks faults and not individuals then why do we not have a massive mortgage? Why are we waiting to buy at a sensible income multiplier rather than just jumping in?

I expect everyone to have a rough idea of the worth of things, and the common sense to know that when something goes up 20% in a year while wages go up 3% that those increases are crazy.

If more people had said NO I wont borrow 4 times, 5 times, 6 times my salary then prices would never have reached the levels they did regardless of anything the banks did.

Share this post


Link to post
Share on other sites

If more people had said NO I wont borrow 4 times, 5 times, 6 times my salary then prices would never have reached the levels they did regardless of anything the banks did.

Where does that end though? I won't borrow 3, 2, 1 times my salary? Houses priced at 15k?

Share this post


Link to post
Share on other sites

Where does that end though? I won't borrow 3, 2, 1 times my salary? Houses priced at 15k?

Well it seemed to end at 3 times salary for quite a long time. Which was a sensible rule of thumb for what was affordable.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 259 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.