Midwife with £320k mortgage

[Itsallaguess]

Well this sort of news story is rearing its head again...

Bravo...

https://media.tenor.com/pgDYymTrrtAAAAAd/monkey-badum-tss.gif

Cheers,

Itsallaguess

[anteos]

I find it very frustrating that the bbc do very little in research when they reel out the financially illiterate. The lady with the 25yr IO bought the house for 108k and its now up for sale at £460k:

If she sells at that price she'll make out with 352k (unless she has mewed), more money than most people will see in a lifetime. Easily able to start over in a smaller place and live comfortably.

[Mike4]

I find it very frustrating that the bbc do very little in research when they reel out the financially illiterate. The lady with the 25yr IO bought the house for 108k and its now up for sale at £460k:

If she sells at that price she'll make out with 352k (unless she has mewed), more money than most people will see in a lifetime. Easily able to start over in a smaller place and live comfortably.

And yesterday in a popular radio phone-in programme there was a bod saying his mortgage payments were going up from £1k a month to £4k and with not a prayer of paying it he was going to lose his house and how unfair it all is, and how he blames the guvvermint.

He went on to say he did everything right by buying his place for £82k 20 years ago and working diligently ever since, and now he was set to lose it. No-one, not even the presenter, asked him how on earth a £82k mortgage (assuming 100% LTV) could possibly be costing £4k a month in interest.

[DrFfybes]

I find it very frustrating that the bbc do very little in research when they reel out the financially illiterate. The lady with the 25yr IO bought the house for 108k and its now up for sale at £460k:

They do a lot of research - must be hard to find someone who is stupid enough to get themselves into that position AND wants the whole country to know about it.

Paul

[Alaric]

And yesterday in a popular radio phone-in programme there was a bod saying his mortgage payments were going up from £1k a month to £4k and with not a prayer of paying it he was going to lose his house and how unfair it all is, and how he blames the guvvermint.

Surely the ones who are really likely to be hit are those in their twenties or thirties who have borrowed the maximum allowed and sunk all their savings into a deposit and moving in expenses.

If there are any new BTL investors, they would likely be hit as well, making their investment loss making.

[DrFfybes]

Surely the ones who are really likely to be hit are those in their twenties or thirties who have borrowed the maximum allowed and sunk all their savings into a deposit and moving in expenses.

Yes - loads, but the media seem for some reason to be searching for the outliers. Those people who saved for a deposit and sunk all their money into getting on the preoperty ladder and are struggling have my sympathy, which will do them about as much good as the sympathy people like MrsF and I got 40 or so years ago.

The difference now is rates have been so low for so long that any hike is a huge increase in real terms, but they'll come out of it wiser and in 40 years will while away the days online discussing how the young generation are liing beyond their means again.

[richlist]

I took my first mortgage in 1972 (aged 21) and had mortgages continuously all my life until 2016 (44 years). At one point my mortgages were I think around 13% and at one point I owed around £600K. Kids today have no idea what struggling to pay means.

I thought all mortgages now had to be stress tested to 6% i.e. borrowers had to be able to demonstrate they could afford to pay back the loan at 6%. So why are so many people saying they can't afford the increase ?

[Itsallaguess]

I thought all mortgages now had to be stress tested to 6% i.e. borrowers had to be able to demonstrate they could afford to pay back the loan at 6%.

So why are so many people saying they can't afford the increase ?

With regards to those mortgage stress-tests, it would certainly be interesting to see a series of forensic comparisons between the areas that lenders deem to be 'critical baseline spending' outside of mortgage costs, and the set of regular outgoings that are broadly considered to be in that 'critical' category from the borrowers point of view...

Would it come as a huge surprise to see a large mismatch in positions in today's much more 'entitled' world?

Cheers,

Itsallaguess

[Gerry557]

I took my first mortgage in 1972 (aged 21) and had mortgages continuously all my life until 2016 (44 years). At one point my mortgages were I think around 13% and at one point I owed around £600K. Kids today have no idea what struggling to pay means.

I thought all mortgages now had to be stress tested to 6% i.e. borrowers had to be able to demonstrate they could afford to pay back the loan at 6%. So why are so many people saying they can't afford the increase ?

Kids today have a different hand of cards to play.

You didn't have student debts starting off your working life and the ongoing extra 9% tax on top of your tax rate. House price multiples are much higher too and is often base on joint workers instead of the breadwinner. Deposits seem to be the thing that adversely affects most as the saving rates were none existent whilst trying to find what some people payed for there actual house.

There were some advantages previously such as miras. Probably less overall tax being taken etc.

That's not to say others didn't struggle such as yourself or even me for that matter. I know a family member who had a repayment mortgage of £8.00 monthly. Whist it would get laughed at today it was a struggle when they started.

For me the struggle was early on just after buying. Our savings depleted on a deposit for a doer upper. Interest rates were rising and my mortgage wasn't fixed back then. We were also highly in negative equity with ongoing costs to get the house nice but at least livable. We had to get a new kitchen at minimum and the surplus income was quickly tending to zero.

Fortunately we survived peak rates and we're looking to gain from out endowment

There were others who didn't survive as I'm sure there will be now. They will be matched with the opposite end, cutting back to two cruise holidays a year due to higher rates.

Like most, it doesn't matter what generation, there is a struggle to get on the housing market. People stretch and you are either lucky or can make difficult choices. Lodgers, move back with mum and rent out.second or third jobs.

Hopefully most have been tucking something away cos it a rainy day now for lots.