• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

The ultimate doomed mortgage

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    The ultimate doomed mortgage

    http://business.timesonline.co.uk/to...cle1625924.ece

    ALLIANCE & Leicester (A&L) is the latest lender to offer mortgages for more than the value of the property, just as experts warn that one more rise in interest rates could be the final nail in the coffin for the housing boom, writes Clare Francis.

    The Bank of England granted borrowers a stay of execution last week when it kept Bank rate on hold at 5.25%, but most analysts think that it will lift rates to 5.5% in the coming months.

    Mortgages such as those from Alliance & Leicester have attracted the tag “negative-equity loans” because borrowers instantly owe more than the value of the property, and if prices fell you would become even more indebted. Lenders counter that less than 100% of the loan is usually secured on the property, with the rest in unsecured loans.

    A&L’s Plusmortgage range allows you to borrow up to 125% of a property’s value — 95% is secured on the house, with the remainder borrowed as an unsecured loan.

    The crash cometh! The crash cometh!
    First Law of Contracting: Only the strong survive

    #2
    Im just glad Im on a fixed rate- I bought my firsat home in Aug 06 with a 100% mortgage repayment so these rises would have put me in a pretty dire financial situation if I was interest only/variable......

    Comment


      #3
      Bastards taking out those mortgages. Heathens the lot of them.

      Sockpuppet in "I was meant to exchange for my house today then the ****ers ended my contract" mode

      Comment


        #4
        This is nothing new. I bought my first house about 7 years ago with a Northern Rock 125% mortgage - it was the only way I could afford it at the time, to clear off a couple of loans to make me able to afford the mortgage repayment.

        Like I say, this was about 7 years ago.
        The pope is a tard.

        Comment


          #5
          the overdraft mortgage, it's the way forward. Or taking out loans to afford the repayments
          I remember the good old days of this site when people used to moan about serious contractor related issues like house prices and immigration. How times have changed!?

          Comment


            #6
            funny thing is it's not like this on the mainland

            you are means tested to see how much you can spare
            to repay a loan each month and then the size of the loan
            is calculated accordingly

            these kinds of offers will only push prices higher, a never
            ending spiral

            good for owners

            Milan.

            Comment


              #7
              Originally posted by SallyAnne
              This is nothing new. I bought my first house about 7 years ago with a Northern Rock 125% mortgage - it was the only way I could afford it at the time, to clear off a couple of loans to make me able to afford the mortgage repayment.

              Like I say, this was about 7 years ago.
              And I guess your house is worth 2x what it was then so it was a good move seeing as you now have roughly 40% equity in the house.

              It may look bad buying with more than value of the house but in the long run it’s better than sitting back and watching the price increase beyond what is affordable.

              Of course if the market goes tits up you're buggered!
              Science isn't about why, it's about why not. You ask: why is so much of our science dangerous? I say: why not marry safe science if you love it so much. In fact, why not invent a special safety door that won't hit you in the butt on the way out, because you are fired. - Cave Johnson

              Comment


                #8
                Originally posted by gingerjedi
                Of course if the market goes tits up you're buggered!
                As certain as we have a buy now while prices are cheap mentality we will eventaully have a mass selling panic.
                I remember the good old days of this site when people used to moan about serious contractor related issues like house prices and immigration. How times have changed!?

                Comment


                  #9
                  Originally posted by milanbenes
                  funny thing is it's not like this on the mainland

                  you are means tested to see how much you can spare
                  to repay a loan each month and then the size of the loan
                  is calculated accordingly
                  It used to be like that here too.
                  these kinds of offers will only push prices higher, a never
                  ending spiral
                  Yes, stupid isn't it. Unfettered lending can only end in tears!

                  Comment


                    #10
                    Originally posted by gingerjedi
                    And I guess your house is worth 2x what it was then so it was a good move seeing as you now have roughly 40% equity in the house.

                    It may look bad buying with more than value of the house but in the long run it’s better than sitting back and watching the price increase beyond what is affordable.

                    Of course if the market goes tits up you're buggered!

                    It worked out really really well for me.

                    I had 2 loans, which came to about £15k, and cost me about £500 a month.
                    I bought my house for about £45k, and lumped the loans in with it (so had a mortgage of about £60k). My mortgage payment was £400 a month, so I actually spent £100 a month less than before I bought it!

                    I kept the house 2 years and sold for £95k.
                    The pope is a tard.

                    Comment

                    Working...
                    X