Mortgage Madness

[Will]

Did anyone watch this program on BBC2 last night?

Basically, what it showed was that the average mortgage is now 6 times what people make. The reason people are managing this is that they are getting self-certification mortgages, where you sign off your own income, and banks do not check up.

Since I've been priced out of the housing market over the last few years, this makes a lot of sense. House prices were predicted to fall, but instead have bucked predictions and risen a lot. More money being available will explain this.

The big danger is, that if interest rates rise, these people will be left with mortgages they cannot afford, and house prices will also drop as people will have stopped taking such large mortgages.

Opinions?

 

[Cdr]

Yup, saw it, if they can't afford to pay the mortgage it'll teach them to lie on the form

Harsh I know, as it's probably the only way they could have got a foot on the property ladder - but still, fraud is fraud.

 

[Wij]

My next mortgage is biiig

 

[Will]

Originally posted by Cdr
Yup, saw it, if they can't afford to pay the mortgage it'll teach them to lie on the form

Harsh I know, as it's probably the only way they could have got a foot on the property ladder - but still, fraud is fraud.

Problem is, I'm in the same situation as the man at the start. I can't afford a house unless I lie on the application. But if I wait for the market to correct itself, thats about another 3 years of paying rent.

 

[SoWat]

There's going to be a lot of tears when interest rates go up again.

I can understand people doing it, as it seems the only way to get on the housing ladder but, unless their wages increase before interest rates do, they're going to be struggling.

The housing market is insane. Supply and demand has pushed prices up so much that owning ones own house is becoming out of reach for a lot of younger people.

The truth is that, apart from banks and building societies, nobody benefits from huge price increases. Joe Blow can sell his house for 3x what he paid for it, then buys another house which is also 3x more expensive.

Of course if one sells a house in the South East, then moves 'Oop North' a tidy profit can be made.... but who wants to do that?

 

[throdgrain]

I have about £45k to pay on my mortgage, something for which I am truly grateful.
When you look at even one bedroom flats around here making £100 000 I dont know how young people are expected to cope. 20 years old, earn say £16000, how can you possibly expect to get your own place without bullshitting the mortgage people ?
You cant get a council house either, once a perfectly respectable thing to do, because if you aint 16 unmarried and pregnant its not just a case of a long wait, its a case of waiting forever.
So what do you do?

 

[Cdr]

Originally posted by Will
Problem is, I'm in the same situation as the man at the start. I can't afford a house unless I lie on the application. But if I wait for the market to correct itself, thats about another 3 years of paying rent.

I can fully understand why they lie, and in the same situation I'd prob do the same. Unfortunately tho, the people who have done it already have made it impossible for anyone else to get a house - unless they do the same, and lie. Which then pushes the house prices up even more.

It's not a good situation to be in. Hell, if the cycle continues, by the time I want a house, I'm gonna be screwed

 

[Will]

Funnily enough, when I went for mortgage advice, I was offered a flexible mortgage. Though they didn't point out so obviously that I could lie on the application.

 

[Tom]

I was really lucky to buy my house when I did, 2 years ago, and at a knockdown price because it was in poor condition. Fortunately my mortage is only about 2 - 2.5x my annual income, and I got it capped for 5 years. When its up, I'm going to get my mortage from another provider, and have that capped for as long as I can.

I would recommend that anyone wanting to buy a house get the most dirty filthy smelly run down house they can find in the area they like, and spend their own time and money doing it up. Even if house values hadn't of risen in the 2 years since I've bought my house, I would have made a tidy profit on the work I've done on it.

 

[xane]

The Property Ladder is very difficult on the lower stages, when I started the interest rate was 16% and the payments were about 50-60% of my salary !

The truth is it gets a lot easier as you move on. If you are youngish go for a 30, 35 or even 40 year mortgage on the first property, which will reduce the capital repayments (or endowment premium), as the chances are it'll be sold before then

 

[whipped]

Originally posted by Will
Problem is, I'm in the same situation as the man at the start. I can't afford a house unless I lie on the application. But if I wait for the market to correct itself, thats about another 3 years of paying rent.

I'm in exactly the same boat at the moment as well. The amount I pay in rent on my Masoinette is more than I would pay if I was to buy the place and have mortgage repayments, but I don't earn enough to pay the £120 000 that the type of places I'm living in cost around here.
So, I'm trusted to pay my rent on my salary, but not a mortgage.
The only way I can see to buying a house round here is either for the market to drop or for me to meet a nice rich girl that I can marry

 

[kanonfodda]

I think it's sad that people have to resort to this kind of fraud, just to make a start in life, but as peole say, once it has started, people will do it more, causing house prices up, until the market can no longer sustain it. At which point all those who have managed to keep there heads above water through the crash, will be left with a house they can't sell.

I guess I was lucky, I bought my house six months ago, and my mortgage repayments are just over a third of my salary. It's a nice house, no work that I can't do myself (I just don't).

 

[1tchy trigger]

Originally posted by throdgrain
Ione bedroom flats around here making £100 000

Cheap - 1 bedroom flats in Finsbury Park, London (not even a very nice area mind) going for £160k +

As far as the housing market is concerned I'm soo priced out of it that I have no hope of buying unless the market crashes - and TBH I hope that it does.

If people are lying on their mortgage applications to buy and borrowing more than they can afford then they deserve everything they get from a rise in interest rates.

We're turning into a society that is spending beyond it's means and we need a cold dose of economic reality.

 

[xane]

Here in Canary Wharf they are building a nice apartment block, the lower half is actually a new Marriott Hotel, me and a cow-orker happened to pop into the sales office and were suprized to find 1 and 2 bedroom apartments for the bargain price of £600,000, with the 4 bedroom penthouse going for a cool £2.5 million, unfortunately almost all had been sold already.

 

[Farsight]

Of course if one sells a house in the South East, then moves 'Oop North' a tidy profit can be made.... but who wants to do that?

I'm doing just that in the next couple of weeks and I've made around 60k profit

 

[Tom]

btw, posted twice, but could be useful:

http://www.junkmailforwarding.com/