Monday, May 7, 2007

Full-scale mortgage crisis

Refinance Fears Over Looming Rate Hike

We are nearly there... "Research found that just 12% of borrowers were prepared for a further increase in their mortgage repayments. More than half of all homeowners would be forced to find a better deal if their mortgage payments increased by up to £150 per month." (see Sky News link). I have posted many more links reporting the moneysupermarket.com research

Posted by confused76 @ 12:44 AM (629 views)
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15 thoughts on “Full-scale mortgage crisis

  • talking rot says:

    I like “53%, of people with a mortgage being affected adversely by the last base rate rise. Of these 15% are only just coping financially. More than half of all homeowners said they would be forced to find a better deal if their mortgage repayments rose by 150 pounds.”

    Hang on, did I not read recently that Banks and Building Societies were withdrawing fix rate deals? Assuming most bought a 2-year fixed rate deal and rates started rising in Aug 06, then most home owners will not be hit until Aug 08 at the earliest. By then, interest rates could be on the way down.

    I am amazed at the number of people who appear unable to understand and manage risk though. What happens in, by Aug 08, rates are not falling?

    Oh joy of joy.

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  • speculatorone says:

    What I don’t understand is who can afford to run a house on 5,6,7,8x their salary give the rising costs of all other bills?

    This weekend around my patch (Northamptonshire) I have noticed that a number of the more expensive properties that have stagnated recently have been sold, 300k to 500k. Does this indicate some form of panic buying?

    I take heart from the Observer article yesterday warning not to ‘take out an extreme mortgage at the height of the market’.

    I hope all this recent press means the bubble is about to bust!!

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  • I know quite a few people with a large mortgage, on interest only and variable rate.
    Speculatorone asks how do people afford running a house in those conditions: simply they’ve become comfortable with credit, because credit has been cheap and their property “wealth” icreasing daily.How the picture has changed in the last month or so, even though many bloggers on this site have been saying that the property market was unsubstainable for the past 2 years.
    I predict a sharp downturn in the Autumn, possibly the start of a crash.The age of reward is coming to the sensible and prudent.

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  • “The age of reward is coming to the sensible and prudent.”

    How nice that would be.

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  • The Irony is that while the prudent individuals will be by and large okay their credit feckless brothers and sisters will struggle at a time when Gordon Brown the chancellor who rode the boom and whose mantra was “prudence with a purpose” and even said as recently as his 2006 budget speach “no return to boom and bust” will leave the sinking ship of the treasury in the nick of time to become PM by default.

    The 0.25% rate rises will have little immediate effect on their own because only 15% of the 53% quoted i.e. ~8% are currently in the danger zone, further monthly rises or another external catalyst are required.

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  • speculatorone says:

    enuii said.. ‘Gordon Brown the chancellor who rode the boom and whose mantra was “prudence with a purpose” and even said as recently as his 2006 budget speach “no return to boom and bust” will leave the sinking ship of the treasury in the nick of time to become PM by default’

    And when he is PM (hopefully short lived) just wait to see the interviews where he denies any of it is his doing and how labour are doing a great job of running the economy….

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  • converted lurker says:

    good pr by Louise at moneysupermarket, “come to us for a re-mortgage quote if you’re worried” ;¬)

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  • Gordon Brown who sold our Nation to Goldman Sachs upon the basis of obviously false promises. ‘Brittons never, never, never shall be slaves’…hahahahahahah.

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  • Not so fast Tocktock, a lot of people are brought into this country as slaves. In fact, the global slave trade is a 2bn pound industry, which surpasses London’s booming financial sector. Read the book entitled “Illicit”, get it from Amazon.

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  • sold 2 rent 1 says:

    “The age of reward is coming to the sensible and prudent.”

    “Age” being the key word here.

    We have all been living off furure earnings for way too long.
    The new age will see the pedulum swing the other way
    The pedulum will swing too far of course and we will enter an era of having to save for almost everything.

    Sounds like science fiction. Maybe not. It’s closer then you think.

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  • I wonder if nostra darmus predicted a house price crash or high interest rates? Maybe that is what he meant by his infamous “end of the world” prediction. “It all starts when house prices fall in London, the world’s capital, and then … (chapter 1)…..(chapter 2) …. (chapter 3) …. and now nuclear war is imminent”.

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  • The Haunted says:

    I suspect these idiots are not aware that many mortgage providers are pulling their fixed rate mortages. In China there is a curse that I feel will be applicable to our stupid overmortgaged fools:

    May you live in interesting times.

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  • S2R1,

    “The age of reward is coming to the sensible and prudent.”

    What a fantastic quote, be patient everybody, think about what is coming, have vision and you will prosper.

    Please no more doom and gloom ” I don’t own a house yet”. You will not get a better opportunity to set yourselves up for life, the debt monster is about to eat alot of vunerable souls!

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  • Dobber that was MY quote which S2R1 was mentioning and yes I am pretty pleased with it.

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  • Magnifico,

    Apologies, excellent quote.

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