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95% Mortgage Plan Back On The Menu

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  1. #11

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    Quote Originally Posted by Mat:
    People will buy what they cant afford.
    Simple as that.
    Forget any stress test.
    Huh? You serious?
    Didnt we just have a sub-prime mortgage crisis beause People bought stuff they could not afford.....

  2. #12

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    Nobody cares if individual buyers get in over their heads and go bankrupt as a result of unwise financial decisions; there is no systemic risk from that. But when the originators then distribute these dodgy debts in the form of opaque structured finance vehicles, THEN the systemic risks are created. If these 95% mortagages stay with their originators (meaning those who provide the purchase money also collect the payments going forward), there shouldn't be a problem for the rest of us to worry much about.


  3. #13

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    If you thnk it is going to stay w the originators.....

    and btw, even if it was staying with the originators, it still is a receipe for disaster...


  4. #14

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    Quote Originally Posted by Mat:
    If you thnk it is going to stay w the originators.....

    and btw, even if it was staying with the originators, it still is a receipe for disaster...
    I don't think so either; I was just illustrating my point. And I agree it would be a recipie for disaster for the originators, but which they would be well aware of and, thus, not take on too much of it. (In theory!)

  5. #15

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    Quote Originally Posted by Mat:
    Time will tell.

    It all depends how the prime moves and how the hibor moves.
    Ok thanks for that advice : I can accept that uncertainty

    Sent from my ST27i using GeoClicks mobile app

  6. #16

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    Apr 2011
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    You mean physically, right?
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    Quote Originally Posted by INXS:
    Why is it a recipe for disaster? It is the stress test that is the key.
    Tell that to the Irish, Americans, Spanish and Dutch who actually got neg equity and lost their homes. Despite of al the stress test.

    Stress test my .... It's just an excuse to sell something which should clearly not be sold given the risks it entails.

  7. #17

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    Quote Originally Posted by dutchmen:
    Tell that to the Irish, Americans, Spanish and Dutch who actually got neg equity and lost their homes. Despite of al the stress test.

    Stress test my .... It's just an excuse to sell something which should clearly not be sold given the risks it entails.
    Negative equity is not a problem if it's your primary home and you're in it for the long term.

    The only question is can you ride out a hike in interest rates. That should be your stress test.

    If you're worried that you won't be able to sell out if a crisis comes then I advise renting.

    For me, I am the same with buying as renting. I can't abide spending the percentage of salary many do on rent. Currently I spend between 10% and 15% of my income on rent.

    When I've looked at apartments for purchase I've considered those in the range 2.5m to 3m. I'm very sure most locals would be looking at places 2-3 times that price if they were on my income.

    Not sure why I should be punished for what others do! While interest rates are low I've got better things to do with my cash than tie it up in a Hong Kong flat.
    dutchmen likes this.

  8. #18

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    Quote Originally Posted by INXS:
    While interest rates are low I've got better things to do with my cash than tie it up in a Hong Kong flat.
    This is what my "tied up" cash has done in the last 6 years. You've done better?
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  9. #19

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    Quote Originally Posted by Gruntfuttock:
    This is what my "tied up" cash has done in the last 6 years. You've done better?
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    Well you've got quite a lot more cash than me! That said, in the last two years I think I've out performed you, relatively speaking that is... I invest my money back into my business and it has been growing steadily.

    Put it in your diary and ask me again in two years.

    That said, I'd love to buy a place. On the other hand, if I had the cash I'd buy a commercial unit!

  10. #20

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    Quote Originally Posted by INXS:
    That said, in the last two years I think I've out performed you, relatively speaking that is... I invest my money back into my business and it has been growing steadily
    Ah, but that involves working! I don't really fancy that any more...
    INXS likes this.