Hi,
On this mornings Newstalk breakfast show, Charile Weston (of the Indo) was talking about a new product which some banks are on the verge of introducing.
The basic premise of it is that if you have negative equity but want to move house, then you can wrap up the amount you would owe to the bank from the old mortgage to the new mortgage. So I sell current house – I owe say 50k to the bank, but they will wrap it up in the new mortgage, so you still owe the bank but you get to move house.
On the one hand its very dangerous if it sinks people into further debt, however it may be beneficial to people who need to move house for whatever reason. Personally it would suit me as both my spouse and I are working but we need to move property now. However the negative equity on our property at the moment is ‘only’ about 10-20k. Our only other option is to rent out our current property and then rent another one for ourselves which we would rather not do.
Apparently the banks are doing it on the basis of ability to repay – though look where that principle got us. This may also be viewed as an attempt by the banks to get people off tracker mortgages and onto variable rate one.s
Link: http://www.independent.ie/opinion/columnists/charlie-weston/charlie-weston-mortgage-bid-to-unlock-market-could-backfire-2228556.html
This was done in the UK in the 90’s, it fuelled a bit of a rebound in the market – but I’m not sure what the long term consequences of it were.
I had a look at all of today’s posts, and it does not seem covered so apologies if I have missed it.
Thoughts?
On this mornings Newstalk breakfast show, Charile Weston (of the Indo) was talking about a new product which some banks are on the verge of introducing.
The basic premise of it is that if you have negative equity but want to move house, then you can wrap up the amount you would owe to the bank from the old mortgage to the new mortgage. So I sell current house – I owe say 50k to the bank, but they will wrap it up in the new mortgage, so you still owe the bank but you get to move house.
On the one hand its very dangerous if it sinks people into further debt, however it may be beneficial to people who need to move house for whatever reason. Personally it would suit me as both my spouse and I are working but we need to move property now. However the negative equity on our property at the moment is ‘only’ about 10-20k. Our only other option is to rent out our current property and then rent another one for ourselves which we would rather not do.
Apparently the banks are doing it on the basis of ability to repay – though look where that principle got us. This may also be viewed as an attempt by the banks to get people off tracker mortgages and onto variable rate one.s
Link: http://www.independent.ie/opinion/columnists/charlie-weston/charlie-weston-mortgage-bid-to-unlock-market-could-backfire-2228556.html
This was done in the UK in the 90’s, it fuelled a bit of a rebound in the market – but I’m not sure what the long term consequences of it were.
I had a look at all of today’s posts, and it does not seem covered so apologies if I have missed it.
Thoughts?