Comments on: Mortgage Doom And Gloom Is Overdone! http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/ Neil Shearing's latest up-to-the-minute tips and secrets! Thu, 08 Jan 2009 21:43:15 +0000 http://wordpress.org/?v=2.0.2 by: UK Mortgage Brokers http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-138292 Mon, 09 Jun 2008 19:46:08 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-138292 Neil First and foremost, cracking blog, I will be back to this regularly. The mortgage debate will go on and on and I could talk about it for ages. I think the facts are that we are now almost certainly heading for a recession and house price defaltion is happening. Lets be real, not emotional but face the reality of the matter, house prices are going down. There was a cracking article in the Mail last Sunday about the blame game. The Bank of England, the Treasury, the lenders and the FSA are all blaming each other. As an economist by trade, my view is that all are to blame and all will now suffer. However, I think that the consumer will suffer the most as is always the case and that house prices should never have been allowed to rise so far. From bottom to top, UK house prices rose 350%, in the USA it was only 250%! I hate to say it, but I always think that markets should be viewed without emotion, hold onto your hats!!!!!!! Neil

First and foremost, cracking blog, I will be back to this regularly.

The mortgage debate will go on and on and I could talk about it for ages. I think the facts are that we are now almost certainly heading for a recession and house price defaltion is happening. Lets be real, not emotional but face the reality of the matter, house prices are going down.

There was a cracking article in the Mail last Sunday about the blame game. The Bank of England, the Treasury, the lenders and the FSA are all blaming each other. As an economist by trade, my view is that all are to blame and all will now suffer. However, I think that the consumer will suffer the most as is always the case and that house prices should never have been allowed to rise so far. From bottom to top, UK house prices rose 350%, in the USA it was only 250%! I hate to say it, but I always think that markets should be viewed without emotion, hold onto your hats!!!!!!!

]]> by: Bridging Loans http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-137087 Mon, 26 May 2008 06:51:58 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-137087 Bridging loans may be a good option to arrange your future plans in a very short term. Just pay debts first. regards Bridging loans may be a good option to arrange your future plans in a very short term. Just pay debts first.

regards

]]> by: tax fraud http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-137086 Mon, 26 May 2008 06:51:01 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-137086 If you want to be success on finance try to keep a balance in your monthly income. Maybe it is time to start your own business. Look around you and choose one of the varied ways to earn money by yourself. Many thanks If you want to be success on finance try to keep a balance in your monthly income. Maybe it is time to start your own business. Look around you and choose one of the varied ways to earn money by yourself.

Many thanks

]]> by: Neil_Shearing http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-136871 Fri, 23 May 2008 09:21:48 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-136871 >I ask myself if goverment can do anything?< What should the government do? Bail people out? I doubt that any of the people who took out mortgages were mis-sold. In fact, unlike the 90's, most are on repayment mortgages (not interest-only), and put down larger deposits (there were many fewer 100% mortgages than in the 90's). So, I don't think people should be bailed out by the government. The adjustment to the standard rate of the lender was always going to happen and should've been budgeted for. Interest rates are unlikely to rise to 15% like they did before... it's only a few percentage points difference from the fixed discount to the standard rate. Neil. >I ask myself if goverment can do anything?<

What should the government do? Bail people out? I doubt that any of the people who took out mortgages were mis-sold. In fact, unlike the 90’s, most are on repayment mortgages (not interest-only), and put down larger deposits (there were many fewer 100% mortgages than in the 90’s). So, I don’t think people should be bailed out by the government.

The adjustment to the standard rate of the lender was always going to happen and should’ve been budgeted for. Interest rates are unlikely to rise to 15% like they did before… it’s only a few percentage points difference from the fixed discount to the standard rate.

Neil.

]]> by: Finance http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-136866 Fri, 23 May 2008 08:29:28 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-136866 I’m not sure about the exact situation in the USA, but here in England the same story is everywhere… 1.4 million people will come off “cheap fixed rate” deals in 2008 and will be hit with their mortgage lender’s full variable rate… which is likely to be much higher than their fixed rate deal. Thats a real big problem! I ask myself if goverment can do anything? Thanks I’m not sure about the exact situation in the USA, but here in England the same story is everywhere… 1.4 million people will come off “cheap fixed rate” deals in 2008 and will be hit with their mortgage lender’s full variable rate… which is likely to be much higher than their fixed rate deal.

Thats a real big problem! I ask myself if goverment can do anything?
Thanks

]]> by: Janni http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-134543 Wed, 30 Apr 2008 20:24:51 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-134543 After Halifax and Abbey raised mortgage rates and other lenders followed Nationwide's lead by cutting high loan-to-value deals, mortgage expert Ray Boulger, of broker John Charcol, described conditions as "deteriorating at a frightening speed". But while the High Street big guns have been demanding higher fees and higher rates, smaller names offer some of the best deals. After Halifax and Abbey raised mortgage rates and other lenders followed Nationwide’s lead by cutting high loan-to-value deals, mortgage expert Ray Boulger, of broker John Charcol, described conditions as “deteriorating at a frightening speed”. But while the High Street big guns have been demanding higher fees and higher rates, smaller names offer some of the best deals.

]]> by: mortgage man http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-134328 Sun, 27 Apr 2008 15:32:41 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-134328 Interesting post and interesting finding it almost 6 months on and after even more interest rates cuts, we all know that the 'credit crunch' hasn't eased away yet and mortgages hasn't become any cheaper. Will definitely keep an eye on this blog. Interesting post and interesting finding it almost 6 months on and after even more interest rates cuts, we all know that the ‘credit crunch’ hasn’t eased away yet and mortgages hasn’t become any cheaper. Will definitely keep an eye on this blog.

]]> by: Jim http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-133766 Sun, 13 Apr 2008 14:28:36 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-133766 Yes, there does seem to be a bit of a difference in the UK as opposed to the US relating to adjustable mortgages. In the US, arm loans are normally are based on the (short term) 1 Year Treasury, COFI, or LIBOR index. With the US Fed cuts in 2008, these short term indexs are at very low levels. Once the arm margin is added to the index rate, adjustments are not nearly as bad as anticpated. Yes, there does seem to be a bit of a difference in the UK as opposed to the US relating to adjustable mortgages. In the US, arm loans are normally are based on the (short term) 1 Year Treasury, COFI, or LIBOR index. With the US Fed cuts in 2008, these short term indexs are at very low levels. Once the arm margin is added to the index rate, adjustments are not nearly as bad as anticpated.

]]> by: California Mortgage Loan http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-133062 Thu, 20 Mar 2008 19:51:03 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-133062 The difficulty in switching deals in the market is the costs involved in refinancing. Many times the costs are not worth the minimal change in interest rate. The difficulty in switching deals in the market is the costs involved in refinancing. Many times the costs are not worth the minimal change in interest rate.

]]> by: Neil_Shearing http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-124467 Tue, 22 Jan 2008 11:12:46 +0000 http://www.neilshearing.com/2007/12/08/mortgage-doom-and-gloom-is-overdone/#comment-124467 Yes, in England we don't really have an equivalent to fixing the mortgage for the life of the mortgage. Although those offers are available, hardly anyone takes out such a mortgage. [Currently only 25 lenders offer a 10-year deal; four lenders offer a 15-year deal; two a 20-year deal; three a 25-year mortgage; and just one - the Manchester Building Society- offers a 30-year fixed rate mortgage. This is in marked contrast to housing finance in the EU and the US, where such deals are common.] source: http://news.bbc.co.uk/2/hi/business/6292266.stm So when I say "fixed rate" I mean "short term fixed rate deals of two or three years", which are equivalent to your ARM's. Neil. Yes, in England we don’t really have an equivalent to fixing the mortgage for the life of the mortgage. Although those offers are available, hardly anyone takes out such a mortgage.

[Currently only 25 lenders offer a 10-year deal; four lenders offer a 15-year deal; two a 20-year deal; three a 25-year mortgage; and just one - the Manchester Building Society- offers a 30-year fixed rate mortgage.

This is in marked contrast to housing finance in the EU and the US, where such deals are common.]
source: http://news.bbc.co.uk/2/hi/business/6292266.stm

So when I say “fixed rate” I mean “short term fixed rate deals of two or three years”, which are equivalent to your ARM’s.

Neil.

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