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crazychick

Personal Debt Leading To House Sale! One Of Many To Come

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Read this thread -bit long and rambling but an eye-opener. makes you think

Interesting to note that this person had originally owned 2 houses. Maybe with the level of personal debt people have this will expediate the crash. Some of the posts on the Martin Lewis sight need to be seen to be believed especially the property prices thread - gang of idiots!!!

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Hi

also see Motley fool debt board!

(Interesting about house prices in Lincoln too)

"Hi - I did post on here before but cant find my original post - I had few responses but need to expand on the facts...

we have a 4 bed end terraced house - valued at £186,000 in 2004 by our second mortgage company and has been on the market since August and now reduced to £150,000 from £164,000. It wont sell - in Lincoln there is such a glut in 4 bed properties for sale the market is stagnant and we are up against 4 bed detached houses with drive and garage even at the latest price.

We owe in total on credit cards and ccj and overdrafts £39,000 - mostly spent on renovating the house which we bought 3 years ago for £90,000. We have 2 mortgages - one with GMAC for 78,000 inc redemption penalty and one with future mortages for 58,000 inc redemption.

We are 2 months behind with 2 mortgage with future and have been told they are starting repossession proceedings on 1st March.

We have filled in Bankruptcy papers and are filing at the end of the month when we have enough money as it costs £940 for a joint application.

We have accepted that we are going to rent somewhere modest for 3 years after this but feel like we are between a rock and a hard place at the moment as our children both have important exams coming up in May and our gut feeling is to get out now - rent somewhere and get settled for their sakes - then go bankrupt and hand the keys over to the reciever to sell the house, but what happens with the repossession? who will win? Also if we make an application to rent and are already bankrupt we have to pay 6 months rent upront as well as bond and agency fees - which we just dont have - and wouldnt have from either the house sale or the repo or bankruptcy but may be able to get a small amount of cash together to rent now."

There seems to be more posts like this every week.

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I dont understand how these people can get into so much debt.

Am I being unkind when I say they are complete and utter morons? Or are they victims of current lending practices?

Or have I missd something?

I don't understand?

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Guest Winners and Losers

By thinking that property prices never go down.

I dont understand how these people can get into so much debt.

Am I being unkind when I say they are complete and utter morons? Or are they victims of current lending practices?

Or have I missd something?

I don't understand?

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Not good, debt is pernicious.

People now talk about a quarter of a million quid in the context of houses as if it were nothing, it's very debased, especially as wages haven't hyper-inflated to the same level, in the 70's when wage settlements of >20% were not unusual you could forgive this mindset.

People see numbers on bits of paper and have the feeling of it not really being their money, however it is real money that needs to be paid back.

Edited by BuyingBear

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I dont understand how these people can get into so much debt.

Am I being unkind when I say they are complete and utter morons? Or are they victims of current lending practices?

Or have I missd something?

I don't understand?

I'm not sure about those cases obviously, but generally second mortgages/MEW have bailed people out of trouble and people think this can continue infinitely. People genuinely believe they are 'extracting equity' that they've earned, rather than the reality, which is securing ever increasing amounts of debt against your home.

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Not good, debt is pernicious.

People now talk about a quarter of a million quid in the context of houses as if it were nothing, it's very debased, especially as wages haven't hyper-inflated to the same level, in the 70's when wage settlements of >20% were not unusual you could forgive this mindset.

People see numbers on bits of paper and have the feeling of it not really being their money, however it is real money that needs to be paid back.

Glad you have said ,People now talk about a quarter of a million quid in the context of houses as if it were nothing, it's very debased,because this is the feeling I have.When i go to my home town of Reading and talk to folks they seem to have no concept of money.Someone said to me that his mother had a house worth 300k and ONLY had a mortgage of 150k.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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I think folk also just look at the monthly mortgage payment (usually IO) and are de-sensitized to the total figure. Of course I'm sure many haven't factored in interest rate increases, fuel increases, council tax increases over the next 25 years. Generally everything included in the fudged CPI figures.

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People see numbers on bits of paper and have the feeling of it not really being their money, however it is real money that needs to be paid back.

The problem is I think not that its not real money, but that its not real profit. People think they have made a 'profit' on their house before they even sell the damn thing. Profit is the realisation of value, not the realisation of debt against a nominal value that may never be realised. It even stupider because they think they have only made a debt against part of the profit, and will pay it back with the rest based on the novice assumption that the value will continue to go up in later years. This is the equivalent of a 10 year old thinking he has learned to play the share market, because he has learned to play Tycoon.

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Read this thread -bit long and rambling but an eye-opener. makes you think

Interesting to note that this person had originally owned 2 houses. Maybe with the level of personal debt people have this will expediate the crash. Some of the posts on the Martin Lewis sight need to be seen to be believed especially the property prices thread - gang of idiots!!!

well you'll certainly be able to 'see' that 'sight' won't you :rolleyes:

glad to know you're willing your fellow man to fail - nice!

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The stories on the forum are desperately sad.

How many times have we heard that it is just unacceptable not to be a homeowner when you have children, that the security of homeowning cannot be beaten?

And yet, look what can happen.

Encouragingly, at least they have come to realise that a supportive family network and mutual aid is the only true basis of a secure family life.

What's sickening to me is that all the unfortunate debtors can think about is what other people will think.

If you obsess about what other people think you will never be happy.

frugalista

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The problem is I think not that its not real money, but that its not real profit. People think they have made a 'profit' on their house before they even sell the damn thing.

In the context of MEW you're quite right, securitized loans != extracting equity.

I was making the point that a £250k mortgage, though unreal and abstract, will actually require £250k to be paid back, a quarter of a million quid of real earned money, or possibly twice that with interest.

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  • 302 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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