Originally posted by woodnut86
I believe prices will keep on sliding down here and as you say, we could maybe pick one up for bugger all in a few years?
But, what if that doesn't happen? The economy takes an upswing, or even simply stabilises? Short of armageddon, the population is going to continue
to rise and housing will remain at a premium, demand greater than supply, in areas that have an active economy. Look around you and consider what
will be the outcome of that in a few years time only
in relation to your house. Then consider the interest rates in relation to your current
Consider alternatives that could reduce your mortgage. Do you have a spare room that you could rent out? Check with any universities, colleges and
schools whether they need host families for overseas student. They tend to be short-term, upto three months, sometimes more, and they pay good weekly
rates. You can use this extra income to make additional capital repayments and therefore reduce the equity to loan ratio. This will also give you a
buffer should the interest rates go up.
Even if you put the house on the market, it could take a while to sell, and if the market is perceived to be unstable then you may have to take a
reduced offer, so best to take action now and look to improve your current situation anyway. I am in the UK, but I am currently in the process of
selling my house, rather than the usual six to eight weeks, it is now running into three months, that is almost entirely due to over caution lenders.
That is really the only thing that is holding back the market, people want to buy, people want to sell, but lenders are making it prohibitive to
borrow and are slowing the market down inexorably and forcing anally retentive chartered surveyors to under value properties for fear of penalisation
by said lenders and borrowers alike.
Interest rates are too low and
therefore it is not worth their while to lend to homeowners on long term loans. Very few borrowers are
permitted to make 100% mortgages, and many are requesting as much as a 30% minimum deposit. This purposely drives the banks reserves as more people
are forced to save for these deposits, which because of low interest rates does not cost them so much. So even if you are not in the UK, the UK bank
market is having a roll down effect, because it is sterling, and sterling is one of the currencies that drive the global economy. All those that
borrow, trade and facilitate with sterling will be experiencing the bank of England low base rates.
I would not be looking to change your position as radically as you propose, you are far better looking to consolidate it, that way, however things go,
your position is improved. You currently have a home, and as long as you can meet the mortgage payments, that position is secure. By looking too far
ahead you are risking considering all the variables, remember as long as people cannot afford to buy, rents will keep rising, and even is nothing at
all changes, energy prices will keep on rising too. Focus on the here and now, and look to strengthen your position one way or another.