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The mortgage prisoners fight back:Return of the Key Worker


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22 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.....;)

So, are they STILL paying interest-only?? Can't they retrospectively ban that?

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9 minutes ago, Si1 said:

Because NHS.

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

Indeed, and because BBC as well I suppose. They never seem to be able to go more than a couple of minutes without mentioning key workers or the NHS.

I find it annoying because it just undermines the importance of the message when it is misused. The people on the frontline of the NHS do a fantastic job all the time, and have stepped up even more during this crisis, but it doesn't mean that their mortgage problems are any worse than other low paid people who were mis-sold similar loans.

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15 minutes ago, worried1 said:

So, are they STILL paying interest-only?? Can't they retrospectively ban that?

....everything nowadays is guidance, low regulation, free market economy.....nothing is banned if there are those in high places that benefit from it, not what you pay today, its what you end up paying back tomorrow......kick the can.....tomorrow never comes until it does.;)

Edited by winkie
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29 minutes ago, winkie said:

....everything nowadays is guidance, low regulation, free market economy.....nothing is banned if there are those in high places that benefit from it, not what you pay today, its what you end up paying back tomorrow......kick the can.....tomorrow never comes until it does.;)

As much as I don't like to see people suffering, it does seem like the couple in the article want to have their cake and eat it - keep on paying IO on a mortgage that should never have been agreed in the first place AND do that paying the lower interest rates of modern deals that were brought in purely because of the previous lending excesses of banks like NR!

Presumably, they need to be a little bit careful about what they wish for - if they are allowed to move lenders then the new lender would be likely to want them to go onto a repayment deal like all new applicants would have to.

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33 minutes ago, winkie said:

....everything nowadays is guidance,

Did you miss the bit where we abandoned parliamentary scrutiny of lawmaking - so, now, 'guidance' constitutes rules that need not be coherent but can be (selectively) enforced?

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More than one article over the last few months has alluded to the possibility of banks flat-out refusing new mortgage applications from people who have taken a mortgage holiday due to the virus - something banks have not denied. Note that although the payment holiday won't appear on your credit record, banks are free to use whatever information they see fit when determining an application. We are looking at nearly 2m people potentially being shoved onto bank SVRs when their introductory deals run out, which could be interesting - and a nice little earner for the banks.  

Edited by mattyboy1973
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58 minutes ago, mattyboy1973 said:

More than one article over the last few months has alluded to the possibility of banks flat-out refusing new mortgage applications from people who have taken a mortgage holiday due to the virus - something banks have not denied. Note that although the payment holiday won't appear on your credit record, banks are free to use whatever information they see fit when determining an application. We are looking at nearly 2m people potentially being shoved onto bank SVRs when their introductory deals run out, which could be interesting - and a nice little earner for the banks.  

It's likely. People get hung up on the singular "credit score" given out by Experian/Equifax and don't think beyond that. The banks would be irresponsible not to take into account the presence of mortgage holidays or pay-day loans etc in making a lending decision. 

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1 minute ago, Council estate capitalist said:

It's likely. People get hung up on the singular "credit score" given out by Experian/Equifax and don't think beyond that. The banks would be irresponsible not to take into account the presence of mortgage holidays or pay-day loans etc in making a lending decision. 

This should be a good lesson to those who took mortgage holidays or government loans (if self employed) without needing them.

Trying to have your cake and eat it too is fashionable these days, many are about to learn that it's not always a valid strategy.

 

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7 minutes ago, GodlessEndeavor said:

This should be a good lesson to those who took mortgage holidays or government loans (if self employed) without needing them.

Trying to have your cake and eat it too is fashionable these days, many are about to learn that it's not always a valid strategy.

 

I wonder what percentage of those that took them actually did need them? Low, is my bet, especially since the furlough scheme was so generous for many (not all, I acknowledge).A few extra grand in the back pocket is always rather tempting, especially when the payback is so far in the future. Might not seem like such a good idea in a few years..

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22 minutes ago, GodlessEndeavor said:

This should be a good lesson to those who took mortgage holidays or government loans (if self employed) without needing them.

Trying to have your cake and eat it too is fashionable these days, many are about to learn that it's not always a valid strategy.

 

Help to Buy equity loans are going to be a similar unholy mess in ten years time I reckon. Headlines, special pleading etc.

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I reckon we could see the first sob-stories by next year in London.

Many of the earlier new builds ie 2013 will be OK. But I've seen new builds around 2016 that are worth less than what they were new, and that was pre-covid.

Some of the new builds were terribly over-priced TBF. There must be quite a few blocks where the sale in 2016 was at £450-475k. Someone taking the max equity loan would have the payments kicking in next year, and even a current valuation of £400k is quite high. Quite a thin market to aim at with that price. The value for money isn't there, as they cost the same or more as a house. 

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2 minutes ago, simon2 said:

I reckon we could see the first sob-stories by next year in London.

Many of the earlier new builds ie 2013 will be OK. But I've seen new builds around 2016 that are worth less than what they were new, and that was pre-covid.

Some of the new builds were terribly over-priced TBF. There must be quite a few blocks where the sale in 2016 was at £450-475k. Someone taking the max equity loan would have the payments kicking in next year, and even a current valuation of £400k is quite high. Quite a thin market to aim at with that price. The value for money isn't there, as they cost the same or more as a house. 

The value for money is also squeezed by the fact that Help to Buy is still available, meaning that potential buyers could choose a brand new 2020 flat for 'less' than a five year old one. 

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6 hours 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 are complaining about all the freebies being given out, Furlough, grants, bounce back loans..

While his wife works on the front line with Covid19 risking her life.

Tbh, it is injust, she should be on an enhanced rate.

6 hours ago, Si1 said:

Because NHS.

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

Exactly, they complain about wages, everytime they smell privatisation they're up in arms about it... The NHS would be better off in private hands, way to much waste and people just ******ing about.

Nothing is stopping them from selling the property, unless their in negative equity.

Edited by Speed1987
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1 hour ago, GodlessEndeavor said:

This should be a good lesson to those who took mortgage holidays or government loans (if self employed) without needing them.

Trying to have your cake and eat it too is fashionable these days, many are about to learn that it's not always a valid strategy.

 

When you live in a society that seems to shun personal responsibility, with every person and their dog getting a handout one way or another, what attitude do you expect them to have  ?

For many on here, what these people did may seem like madness. For the majority of the population though, it's "there but for the grace of god go I".

One persons decision that dumps them in the shit is another's that makes them a fortune. With little or no capability to assess between the two.

For me the blame lies with the governments. You expect the governments to put regulation in place that does not involve massive risk.

Buying a home shouldn't be like Russian roulette. Mortgages and banking should be a low risk and boring endeavour.

 

 

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40 minutes ago, Gigantic Purple Slug said:

When you live in a society that seems to shun personal responsibility, with every person and their dog getting a handout one way or another, what attitude do you expect them to have  ?

It isn't really rocket science:

Asking for a mortgage holiday indicates that you are in financial distress. So does asking for a bounce-back government loan.

Being in financial distress is not compatible with asking for a new loan at low interest rate.

You can either be in financial distress, or not. Being both at the same time is not a thing.

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I love furlough and I’m not furloughed.

i mean having 20% more purchasing power over those on furlough is pretty sweet.

bargains out there (Maybe not with houses)

maybe NHS should get a little danger money.

those asking to be bailed out of negative equity, or to remortgage are just feckless chancers 

Edited by jiltedjen
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12 minutes ago, GodlessEndeavor said:

It isn't really rocket science:

Asking for a mortgage holiday indicates that you are in financial distress. So does asking for a bounce-back government loan.

Being in financial distress is not compatible with asking for a new loan at low interest rate.

You can either be in financial distress, or not. Being both at the same time is not a thing.

If the people were warned before taking the mortgage holiday that there would be significant impact on them being able to remortgage, and thus they could incur significant charges (a much higher mortagage rate and an un-portable mortgage) as a result then fine.

I don't know if they did because I didn't try it.

However, if you move society towards a state where you increasing absolve people of personal responsibility and you don't inform them clearly in advance what the consequences of their actions will be, then it's hardly surprising when they kick off.

The world isn't full of astute financial people carefully reading the small print or weighing up the consequences of their actions. Maybe it should be, but it isn't. Most people have other things to do with their time, and to be fair that is the way it should be. No one should have to have a degree in contract law to take out a mortgage. I don't expect the governments or the bankers to act as conmen. They should offer boring products with simple rules that do not land you in the shit.

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10 minutes ago, Gigantic Purple Slug said:

If the people were warned before taking the mortgage holiday that there would be significant impact on them being able to remortgage, and thus they could incur significant charges (a much higher mortagage rate and an un-portable mortgage) as a result then fine.

I don't know if they did because I didn't try it.

However, if you move society towards a state where you increasing absolve people of personal responsibility and you don't inform them clearly in advance what the consequences of their actions will be, then it's hardly surprising when they kick off.

The world isn't full of astute financial people carefully reading the small print or weighing up the consequences of their actions. Maybe it should be, but it isn't. Most people have other things to do with their time, and to be fair that is the way it should be. No one should have to have a degree in contract law to take out a mortgage. I don't expect the governments or the bankers to act as conmen. They should offer boring products with simple rules that do not land you in the shit.

It's not a constitutional right to be able to access mortgage finance.

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31 minutes ago, Si1 said:

It's not a constitutional right to be able to access mortgage finance.

Maybe not. But I am not into victim blaming. People generally act in what they think is their best interests.

The government, we pay our taxes so they can fund regulators to regulate bankers so they offer sensible and boring products that don't end up tripping people up.

3x salary, well specified long time rate, no BTL empires, I'm sure we could go on etc.

If the shit hits the fan its the government that should get the blame for inappropriate regulation, not the individual.

Same with things like immigration. I feel you should never blame the indivdual if it causes negative effects. At the end of the day it is the government that should be held responsible. Individuals are just trying to do the best for themselves and their families within the opportunities that are presented to them. It's the governments job to manage resource allocation etc and manage the movement of people appropriately for the good of the entire population.

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1 hour ago, Gigantic Purple Slug said:

Maybe not. But I am not into victim blaming. People generally act in what they think is their best interests.

The government, we pay our taxes so they can fund regulators to regulate bankers so they offer sensible and boring products that don't end up tripping people up.

3x salary, well specified long time rate, no BTL empires, I'm sure we could go on etc.

If the shit hits the fan its the government that should get the blame for inappropriate regulation, not the individual.

Same with things like immigration. I feel you should never blame the indivdual if it causes negative effects. At the end of the day it is the government that should be held responsible. Individuals are just trying to do the best for themselves and their families within the opportunities that are presented to them. It's the governments job to manage resource allocation etc and manage the movement of people appropriately for the good of the entire population.

In an ideal world.

But events my dear boy. Events.

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10 hours ago, worried1 said:

As much as I don't like to see people suffering, it does seem like the couple in the article want to have their cake and eat it - keep on paying IO on a mortgage that should never have been agreed in the first place AND do that paying the lower interest rates of modern deals that were brought in purely because of the previous lending excesses of banks like NR!

Presumably, they need to be a little bit careful about what they wish for - if they are allowed to move lenders then the new lender would be likely to want them to go onto a repayment deal like all new applicants would have to.

The PTB want us to spend into the economy......paying down debt is not doing that, paying down debt will mean shopping and spending less......lenders make more from those paying interest the higher the better over zero for years and years, or renting their debt for as long as possible ......people paying down debt is not in their best interests unless their own security becomes perilous......?

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13 hours ago, Gigantic Purple Slug said:

If the people were warned before taking the mortgage holiday that there would be significant impact on them being able to remortgage, and thus they could incur significant charges (a much higher mortagage rate and an un-portable mortgage) as a result then fine.

I don't know if they did because I didn't try it.

However, if you move society towards a state where you increasing absolve people of personal responsibility and you don't inform them clearly in advance what the consequences of their actions will be, then it's hardly surprising when they kick off.

The world isn't full of astute financial people carefully reading the small print or weighing up the consequences of their actions. Maybe it should be, but it isn't. Most people have other things to do with their time, and to be fair that is the way it should be. No one should have to have a degree in contract law to take out a mortgage. I don't expect the governments or the bankers to act as conmen. They should offer boring products with simple rules that do not land you in the shit.

These are the kind of people who would in a previous era be council tenants. Secure, affordable, basic housing that allowed them to get on with everyday life. Go to work, pay your taxes, have a family, go to the pub on a Friday night, the shopping centre on a Saturday, and two a week summer beach holiday each year. Nothing wrong with that.

Creating the situation whereby the only options available to these people was an insecure tenancy with an over leveraged slumlord, or a 100% interest only South Humberside property punt, was never going to end well. It’s the manifest destiny of 30+ years of bad housing policy.

Unwinding it is not going to be easy. 

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3 hours ago, Bear Goggles said:

These are the kind of people who would in a previous era be council tenants. Secure, affordable, basic housing that allowed them to get on with everyday life. Go to work, pay your taxes, have a family, go to the pub on a Friday night, the shopping centre on a Saturday, and two a week summer beach holiday each year. Nothing wrong with that.

Creating the situation whereby the only options available to these people was an insecure tenancy with an over leveraged slumlord, or a 100% interest only South Humberside property punt, was never going to end well. It’s the manifest destiny of 30+ years of bad housing policy.

Nothing wrong with that at all.  It shows the value of a strong Social Contract and how People and the State are symbiotic.  The Ultra elites hate it because it means they can't get out of paying their share. Hence the neo Thatcherite (also adopted by Blair) view to stigmatise the State and have the private sector provide all.

Quote

Unwinding it is not going to be easy. 

No, it  won't. It will be brutal and innocents are going to get caught as collateral damage.  If it takes down the elites, then it is worth it. I won't be around to suffer all the pain, but if it means the next generation has a hope then I'll pay it.

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On 13/07/2020 at 12:31, 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?

Hi

I've been on this site too long...

The deal they got was known as a "buy to gamble" mortgage. Borrow £250k for a £200k flat with a Northern Rock 125% mortgage. Buy the flat for £200k, fly to Vegas and put the £50k on Red, twice. 

If you win you've paid the loan off, if not go bankrupt.

And we're living with the consequences...

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