insolvencies

  hijo 12:45 03 Nov 06
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just when abby offer 5 times your salery for a mortgage....how conflicting isnt it ...are we living beyond our means....???

  Confab 13:07 03 Nov 06

This is nothing new to me. When I worked for The Royal Bank of Scotland all staff had the benefit of a mortgage at either 5 times your salary or 3 ½ times your and your partners joint salary. The first £30,000 was fixed at 5%. This was back in 1985.

With the Abbeys offer I believe that you have to earn at least £50,000 per year so that excludes quite a few. You also need quite a tidy deposit.

It’s all about responsibility and working out if you can really afford the mortgage repayments.

  Confab 13:15 03 Nov 06

Just done a quick Calculation.

£50k per year * 5 = £250k
Term 25 Years
Rate 8%

Monthly Cap & Int repayment £1,929.54

Or Monthly Interest payment £1,666.67

That’s without taking any deposit or partner earnings into consideration.

  johndrew 14:27 03 Nov 06

Back in 1978 my mortgage was 8% in the next few months this rose to 15% and annual inflation to 25%. My morgage was a little over 3 times my annual salary with little or no chance of increasing my income. Many others were in a similar situation.

If it had been as easy then as it is now to become a bankrupt or get into an insolvency agreement I think the figure would have surpassed those released today.

Given property prices today (mine then was about 7 times my annual salary - so not so very different as today in most places) it is people who want both the lifestyle and to be `on the ladder` who are most at risk.

The choice is simple either have your own house, buy second hand furniture to start with and slowly build up, give up the expensive holidays and not go out regularly OR live in rented accommodation.

  hijo 00:05 04 Nov 06

there scarrey points guys thankx

  Forum Editor 01:06 04 Nov 06

Millions of us are, yes; which is why credit-card debt and personal bankruptcies are both at an all-time high.

We live in a 'have it now' society, where everyone wants everything right now, without having to wait until they can afford to pay for it. As far as the commercial world is concerned it's a good job too, if we all waited until we had the money to buy things our economy would grind to a halt tomorrow - the world works by lending and borrowing.

  rodriguez 01:36 04 Nov 06

If I want to buy something I tend to make sure I have the money spare before I do, I never lend money or anything. I have just enough money to live on and if there's any left it goes down the pub - anything extra I want waits until I have the money for it. A lot of people take out loans and stuff but I don't - basically how I work is if I got the money I get it, if I haven't got the money I wait.

  hijo 01:43 04 Nov 06

FE is an amazing dude..he ALWAYS answers the question "spot on",,,still think hes a robot though....lol..kinda like a "logans run"...where the opinion is judged by the pc..i love him..

  jz 17:29 04 Nov 06

"As far as the commercial world is concerned it's a good job too, if we all waited until we had the money to buy things our economy would grind to a halt tomorrow - the world works by lending and borrowing."

If interest rates rise rapidly (which has happened in the past) all those people who live beyond their means suddenly can't afford anything anymore, and the economy takes a dive. Perhaps it's just as well that some people don't live beyond their means (and I'm one of them) otherwise the economy would suffer even more.

  wee eddie 18:23 04 Nov 06

If the interest rates rise.

Those of us relying on Interest for our income suddenly have clout.

We get the painters in 'cause they are desperate for work, fit a new kitchen and a Loft Extension.

It can't be all bad.

  jz 19:08 04 Nov 06

wee eddie: I'm afraid that previous cases of high interest rates after people have overstretched themselves show that the economy suffers badly. There are some balancing factors, as you point out, but they don't make a big enough contribution to keep the economy going strong.

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