Mortgage Rate Rises

adam cool dude said:
We are on the verge of a massive recession.
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Starting to look that way.

The mortgage lender I work for decided this morning that we are no longer going to extend any mortgage offers, and if applications take more than 8 weeks to offer we are pulling them, their very words were "purge the pipeline".

I'm not sure why you would do this unless you are planning to shut up shop.

Unfortunately it's just not profitable to lend unless it's some insane high interest rate, and that in turn is killing the affordability on income/rent calculations so nothing can fit.

We've basically got nothing to do as the new mortgage applications have basically stopped.
 
Rates are out of control, this cant keep up, severe hardship is coming for a lot of people.

Generally when we buy houses we budget for the most we can afford at the time, these rate rises have more than doubled that

Bad times ahead.
 
Must be millions of people who thought "but a mortgage is only the same as rent, renting is a waste of money" who were only just managing to make repayments during the good times.


Most Mps probably rubbing their hands with glee at all the houses they can add to their portfolio when the great sell off comes
 
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BUDFORCE said:
Starting to look that way.

The mortgage lender I work for decided this morning that we are no longer going to extend any mortgage offers, and if applications take more than 8 weeks to offer we are pulling them, their very words were "purge the pipeline".

I'm not sure why you would do this unless you are planning to shut up shop.

Unfortunately it's just not profitable to lend unless it's some insane high interest rate, and that in turn is killing the affordability on income/rent calculations so nothing can fit.

We've basically got nothing to do as the new mortgage applications have basically stopped.
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Same in my industry some lorry drivers haven't had work since end of September in some cases. All these new passes cannot get work either. If the lorries are not moving that means people aren't buying.

People are saving their pennies for the mortgage but when the businesses go bust because no one is buying then the cards start to fall because those people who worked there cannot pay their mortgages.
 
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adam cool dude said:
Same in my industry some lorry drivers haven't had work since end of September in some cases. All these new passes cannot get work either. If the lorries are not moving that means people aren't buying.

People are saving their pennies for the mortgage but when the businesses go bust because no one is buying then the cards start to fall because those people who worked there cannot pay their mortgages.
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This is the issue with this huge mortgage debt. You have to get on the ladder. You can't wait for house prices to fall. No matter how many times armchair experts say you should have waited.


So you're left with crippling debt at minor rate changes. You stop spending. Many others do. The very people who are productive and would normally be spending.
You stop spending due to job worries and paying that mortgage. Or those debts or rent.

You lose your job because others aren't spending to fund your job.

Bang. Recession. Do wonder what's in store for my sister who completed last week. Hopefully in 5 years it isn't negative. As I bet it will be next year.
 
koolpc said:
It was a lot to me back then!
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Of course. But it's same as 6-7pc now. It's a lot.

At least at 15 the rates can come down a lot.
At 6, there isn't a huge amount of reduction.

For me that's the issue. House prices will correct to affordability combined with rates. They have to.... Unless rich immigration pins the market up. But it won't be enough. Prices (rates and house price) will find an equilibrium over the long term.
 
413x said:
Bang. Recession. Do wonder what's in store for my sister who completed last week. Hopefully in 5 years it isn't negative. As I bet it will be next year.
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Well anyone who is buying nowdays is going to be in negative equity no matter what they do.
I'm in the middle of a house purchase, luckily my mortgage is only for £38000 so interest rates don't really effect me THAT much (specially I intend on overpaying 10% each year) but I still expect to be in a negative equity point next year or the year after.
 
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MatsyLR said:
Well anyone who is buying nowdays is going to be in negative equity no matter what they do.
I'm in the middle of a house purchase, luckily my mortgage is only for £38000 so interest rates don't really effect me THAT much but I still expect to be in a negative equity point next year or the year after.
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Hopefully you don't mind me asking, how much is the property you're purchasing?
 
MatsyLR said:
Well anyone who is buying nowdays is going to be in negative equity no matter what they do.
I'm in the middle of a house purchase, luckily my mortgage is only for £38000 so interest rates don't really effect me THAT much (specially I intend on overpaying 10% each year) but I still expect to be in a negative equity point next year or the year after.
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Only at high ltv.

Think my sister will be OK. As in won't go negative. But they will likely be at a high ltv when it comes to remortgage!
 
Surveyor said:
Its value would have to fall by around two thirds for you to be in negative equity, are you sure you understand the term?
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No idea to be honest with you, I thought it meant the value of the house? which will be less next year from what I'm reading around? thats probably something completly different :rolleyes:
 
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