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House prices continue to rise, says Nationwide
http://www.x404.co.uk/forum/viewtopic.php?f=19&t=4627		 Page 1 of 1
Author:  pcernie [ Tue Dec 01, 2009 10:00 am ]
Post subject:  House prices continue to rise, says Nationwide
http://news.bbc.co.uk/1/hi/business/8387203.stm

Not here they're not (at least where I live), but then they were severely overpriced anyway...
Author:  oceanicitl [ Tue Dec 01, 2009 10:39 am ]
Post subject:  Re: House prices continue to rise, says Nationwide
What does it matter how much property costs if it's not selling?
Author:  l3v1ck [ Tue Dec 01, 2009 11:28 am ]
Post subject:  Re: House prices continue to rise, says Nationwide
oceanicitl wrote:
What does it matter how much property costs if it's not selling?

It matters to home owners with a mortgage.
If you want to re-mortgage you get better deals, the better "loan to value" ratio you have. With most banks the best rates are when the LTV is below 60%.
If you house price goes up, your LTV ratio improves, potentially saving you money in the future.
eg
House value 100k, mortgage left 60k, = 60% LTV = best interest rate on offer
House value 90k, mortgage left 60k = 67% LTV = medium interest rate on offer
House value 70k, mortgage left 60k = 86% LTV = expensive interest rate
Author:  jonbwfc [ Tue Dec 01, 2009 1:23 pm ]
Post subject:  Re: House prices continue to rise, says Nationwide
l3v1ck wrote:
oceanicitl wrote:
What does it matter how much property costs if it's not selling?

It matters to home owners with a mortgage.

Not strictly true. I have a mortgage - although I'm technically not a home owner, nobody with a mortgage is - and the LTV of my house is irrelevant since I have no particular need to remortgage. The whole thing about remortgaging your house is as much an act of delusion as the constant need to 'move up the housing ladder' was. Last time I checked, the fees for remortgaging my house would have cost me about £700. The best alternative deal I could find at the time meant I would have had to stay with the 'new' deal for at least 5 years to break even, let alone make any profit on the change. And that deal only lasted 3 years, after which point it would revert to a standard rate mortgage and god knows how that would have affected the equation, because I have no idea what the standard rate will be in 3 years.

l3v1ck wrote:
If you want to re-mortgage you get better deals, the better "loan to value" ratio you have. With most banks the best rates are when the LTV is below 60%.
If you house price goes up, your LTV ratio improves, potentially saving you money in the future.
eg
House value 100k, mortgage left 60k, = 60% LTV = best interest rate on offer
House value 90k, mortgage left 60k = 67% LTV = medium interest rate on offer
House value 70k, mortgage left 60k = 86% LTV = expensive interest rate

If you want to remortgage, the first question you should ask yourself is 'why do I want to do this, and will it be worth the hassle in the long run?' Quite a lot of time the answer to the second part will be 'no'. Move house if you have to (moving location, growing family etc) and get a new mortgage when you do at the best deal you can find at the time. Then get on with your life and don't worry about it.

Jon
Author:  l3v1ck [ Tue Dec 01, 2009 1:51 pm ]
Post subject:  Re: House prices continue to rise, says Nationwide
We just re-mortgaged to get a five year fixed rate. We could only really see rates going up in the long term and wanted stability. The rate we got was good, but it would have been better if the LTV was below 60%. Hopefully if we get a new deal when the five years runs out, our LTV will be below 60%. At least it will be if house prices start to go back up again.
Author:  paulzolo [ Tue Dec 01, 2009 2:52 pm ]
Post subject:  Re: House prices continue to rise, says Nationwide
Other half keeps being niggled by her dad to move house to a “better area”. The bare bones is that we couldn’t afford to if we wanted to - we’d end up in the same kind of house elsewhere, and a fat moving bill, bigger mortgage and nothing “better” to show for it. Even though money will be made on the house when it’s sold, that profit does not equate to being worth anything in terms of “improvement” as ALL the property values have risen proportionally.

I’d only be interested in moving if there was a large shed load of capital to play with. As there isn’t, I’m not in any kind of rush. A house is for living in, not for some kind of mental speculation based on immense risk and debt.
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