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Bbc News - Ftb And 40 Year Mortgages

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Interesting...

I just spotted that BBC News ran a video on how huge swathes of FTB'ers are taking 40 year mortgages.

The filmed family said they are 'taking a big risk' and basically relying on house prices going up. Also forgetting that interest rates will go up in the future and house price growth is collapsing.

Odd for BBC to run this piece imo...is sentiment changing?

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How does house prices rising help? Or are they hoping for high inflation to destroy the debt (before higher interest rates bankrupt them)?

High inflation only works if it includes high wage inflation. High price inflation just means the purchaser struggles even more to find the money for the mortgage.

We are not going to get high wage inflation.

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How does house prices rising help? Or are they hoping for high inflation to destroy the debt (before higher interest rates bankrupt them)?

A friend of mine once said that if you buy a property that later goes up in value, you can go to your bank and ask them to hand you the difference in cash... so you can pay down your cc used for the deposit :)

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A friend of mine once said that if you buy a property that later goes up in value, you can go to your bank and ask them to hand you the difference in cash... so you can pay down your cc used for the deposit :)

...financial illiterates are food for the greedy lenders, who shovel the cash, collect the commissions and own & hold on to the property title deeds, their ace cards, when it all goes wrong.... :rolleyes:

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...financial illiterates are food for the greedy lenders, who shovel the cash, collect the commissions and own & hold on to the property title deeds, their ace cards, when it all goes wrong.... :rolleyes:

You're as ill-informed as the people you are mocking.

Title Deeds are all electronic these days. Have been for a while.

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You're as ill-informed as the people you are mocking.

Title Deeds are all electronic these days. Have been for a while.

Rose sweetness an indissoluble consequent attribute of those things to which the appellation rose is conventionally applied.

The transfer of the ownership of an asset by way of security for particular obligations on the express or implied condition that it will be re-transferred on the discharge of the secured obligations.

A legal mortgage is the most secure and comprehensive form of security interest. It transfers legal title to the Mortgagee and prevents the mortgagor from dealing with the mortgaged asset while it is subject to the mortgage. However, legislation has affected the characteristics of a legal mortgage over land. As a result of the Law of Property Act 1925, a legal mortgage over land is now normally created by a document creating a "charge by deed expressed to be by way of legal mortgage" rather than by the mortgagor transferring the legal title to the land to the mortgagee. Even though title is not transferred to the mortgagee (as it is with a mortgage of other assets), this type of security interest gives the mortgagee equivalent rights.
An equitable mortgage arises where the formalities to create a legal mortgage have not been completed or where the asset being mortgaged is only an equitable interest. An equitable mortgage only transfers a beneficial interest in the asset to the mortgagee with legal title remaining with the mortgagor.

Source (Emphasis added.)

In your considered opinion, do you think that most mortgagors understand the extent of the mortgagee's claim* on the property?

* Intended sense is informal

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