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The mortgage prisoners fight back:Return of the Key Worker


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Mortgage prisoners: Key workers in 'financial nightmare'

They (MPs) are asking for the Competition and Markets Authority (CMA) and the Financial Conduct Authority (FCA) to undertake a joint consultation and introduce a cap on standard variable rates.

The Treasury said it sympathises with the situation of borrowers who cannot switch mortgages if, for example, their loan is too high against the value of their home or because they are now too old to re-mortgage.

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17 minutes ago, Unmoderated said:

Mortgage prisoners: Key workers in 'financial nightmare'

They (MPs) are asking for the Competition and Markets Authority (CMA) and the Financial Conduct Authority (FCA) to undertake a joint consultation and introduce a cap on standard variable rates.

The Treasury said it sympathises with the situation of borrowers who cannot switch mortgages if, for example, their loan is too high against the value of their home or because they are now too old to re-mortgage.

"But.....but.....but the Tories are for free markets."

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Welcome to SVR hell. When these mortgages were sold off into 'bad' banks - the companies receiving them bought them for a fraction of their face value.  If the people can pay in SVR hell, then it is in those companies interest to keep milking at the higher rate.

The result is Heads they win a high SVR yield rate, Tails you loose - can't pay, they repossess and crystalise an instant (and no doubt tax free) profit.

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9 minutes ago, msi said:

Welcome to SVR hell. When these mortgages were sold off into 'bad' banks - the companies receiving them bought them for a fraction of their face value.  If the people can pay in SVR hell, then it is in those companies interest to keep milking at the higher rate.

The result is Heads they win a high SVR yield rate, Tails you loose - can't pay, they repossess and crystalise an instant (and no doubt tax free) profit.

At caring sharing mutual Nationwide the standard variable rate applying to the vast majority of borrowers is 3.59% - the base 36 times the base rate!

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2 minutes ago, MARTINX9 said:

At caring sharing mutual Nationwide the standard variable rate applying to the vast majority of borrowers is 3.59% - the base 36 times the base rate!

And it might still be too low considering how many of those mortgages will be on default later on!

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Everybody wants a bailout and the Tories seem to be 'NuLabour' these days.

People were quite happy to sell their souls and financial security to a bent bank for a funny money mortgage in the first place.

Anyone who takes out a 25/30 year mortgage is playing with fire, as their ability to pay can get hammered by any number of black swans over that timescale.  COVID-19 is a classic example.

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21 minutes ago, Social Justice League said:

Everybody wants a bailout and the Tories seem to be 'NuLabour' these days.

NuLabour was repackaged centrist Tory.

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48 minutes ago, GodlessEndeavor said:

And in 13 years they never managed to pay down anything or sell the house?

Interest only perhaps? After 13 years that house should be worth at least £280k!

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51 minutes ago, GodlessEndeavor said:

 

And in 13 years they never managed to pay down anything or sell the house?

Why pay it down when there are many on the old lifetime mortgages linked to base rate....something like 1.5% above base rate for 25 years......no renewal fees ever....;)

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here's an idea - why don't they make all the people who didn't take out batsh*t mortgages pay for the idiots who did, through taxes.

Oh, that's what they're suggesting. Right-o. Carry on.

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Just now, Unmoderated said:

tbh if people with such a tiny grasp of finance can buy and hang onto a house and then play operation key-worker-human-shield there's only one way this game is going. 

inflation I s'ppose

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There are two things I don't understand about the article. Firstly, what is the relevance of them being key-workers? Surely this has happened to others as well?

Secondly, in the specific example of 'Kevin & Melissa', the article suggests that they can't remortgage because they borrowed more than the value of their home at the time. Surely under the miracle economic conditions that have prevailed since 2007 the house must be worth massively more than it was then? What is the specific rule that is stopping them from remortgaging?

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4 minutes ago, worried1 said:

There are two things I don't understand about the article. Firstly, what is the relevance of them being key-workers? Surely this has happened to others as well?

Secondly, in the specific example of 'Kevin & Melissa', the article suggests that they can't remortgage because they borrowed more than the value of their home at the time. Surely under the miracle economic conditions that have prevailed since 2007 the house must be worth massively more than it was then? What is the specific rule that is stopping them from remortgaging?

They live somewhere around the south side of the Humber, that's Scunthorpe, Grimsby, Cleethorpes I would imagine.

It's quite possible that the tentacles of the miracle economy since 2007 didn't extend far into the area and lift their boat off the shore.

Presumably they went ahead because house prices always go up.

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5 minutes ago, winkie said:

if house prices go up can get away with paying only the interest.....if they don't expect to pay down the debt and the interest to create your own equity.....;)

Agreed, and expect to put your own money down to create equity from day one. It's quite a narrow segment of society that gets pandered to but that creates issues for other buyer and would be buyers alike. I had to stump up a small fortune to put down 15% a few years ago. I am on a repayment that clears about £10k/year from the balance and I have made significant improvements . Side line but it's my way of getting back at the system if you like - build equity through improvements done yourself, do as much as you can and then move on to the next project. I hope to one day not too far away to have no mortgage in a large part to this method. 

It's been said many times but if they (the govt) didn't show the innumerate with cheap debt the rest of us wouldn't be paying a fortune for a house or beholden to landlords. 

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24 minutes ago, worried1 said:

There are two things I don't understand about the article. Firstly, what is the relevance of them being key-workers? Surely this has happened to others as well?

 

Because NHS.

(And I'm not knocking doctors and nurses, just the daft special pleading)

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  • 415 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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