The ultimate doomed mortgage

[gingerjedi]

As certain as we have a buy now while prices are cheap mentality we will eventaully have a mass selling panic.

It depends on how long ago you bought, I bought mine 7 years ago and if the value halved I'd have lost nothing.

As long as I can sell and by a similar sized property on the costas on 15 years time I'll be happy

[SallyAnne]

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.

[wendigo100]

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!

[Numptycorner]

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.

[gingerjedi]

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!

[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

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

good for owners

Milan.

[Numptycorner]

the overdraft mortgage, it's the way forward. Or taking out loans to afford the repayments

[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.

[Sockpuppet]

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

[HRH]

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......

[_V_]

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!