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Realistbear

Early Warning Signal From U S Mortgage Market

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http://www.dailyfx.com/story/dailyfx-repor...keyword=article

This weekend’s Wall Street Journal has picked up on an issue that we first brought up in our 2006 outlook, which is that a quarter of all adjustable rate mortgages are set to reset to market rates this year and next. This is estimated to amount to approximately $2 trillion worth of mortgages, with the majority being sub-prime mortgages, which have the highest default risk.
Going into tomorrow’s retail sales report, we turn our focus to the major uncertainties impacting the sustainability of consumer spending. Not only will many mortgage payments increase by hundreds of dollars a month, consumers are also facing higher minimum credit card payments. At a time when the housing market is showing signs of slowing and oil prices have refused to break below the $60 a barrel mark, we wonder how much longer consumers can really continue to dip into their savings, which are already at record lows.

The UK debt at over 1.2 Trillion Pounds is roughly equal to the US household debt of 11 Trillion dollars taking into account the US population at 6 X the size of the UK. Nearly all of the UK mortgages are "adjustable" and many loans are IO making them vulnerable to the world trend in higher rates. HPI may seem like it can go on forever but the market has a way of controlling itself despite the "Miracle Economy" Chancellors' magic.

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A friend of mine is nervously waiting his new calculation, he didn't know if he had an IO mortgage when I asked - he said it was a 'homestart' mortgage, which sounds like marketing speak for 'we gloss over the fact that your payments will double in 4 years..'

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I just wonder how many sheister mortgage brokers will be had up by the FSA when it all comes to roost for shoddy sales practices, though since they were only regulated in 2005 probably too little too late - so what's new? :(

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A friend of mine is nervously waiting his new calculation, he didn't know if he had an IO mortgage when I asked - he said it was a 'homestart' mortgage, which sounds like marketing speak for 'we gloss over the fact that your payments will double in 4 years..'

:lol: lol

I don't need to think about things like that I just let the nice mortgage man sort it all out.

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he didn't know if he had an IO mortgage when I asked - he said it was a 'homestart' mortgage

Ha - its typical. I've said before that so many people are blissfully unaware of how their payments may change over time with increasing interest rates. This guy doesn't even know if he will ever 'own' his house or not - although i'm sure he's first to say it beats renting.

People should be given better advice when making the largest purchase of their life.

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Ha - its typical. I've said before that so many people are blissfully unaware of how their payments may change over time with increasing interest rates. This guy doesn't even know if he will ever 'own' his house or not - although i'm sure he's first to say it beats renting.

People should be given better advice when making the largest purchase of their life.

no the brokers need to make sure they sell them as much insurance as possible there's loads of commission in it

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  • 341 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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