Sub prime American Lender Crash

[Adrian Ratcliffe]

Hi
Not been on for a while hope everyone is okay.
I have had a big motrgage rate rise and the end of a special rate deal, I have been in IVA for long enough my payments have jumped by £270 a month in a month.
I went to my broker we started looking at deals an email went round his office like wldfire a bank in the US sub prime and I mean a big lender is about to go tits up.
The lIbor rate has gone up and most of the money lent to the UK is from this and other US banks (the reason for the crash is that the rates in the US ran at about 1% now it's 6% most couldn't make payments on the 1%)
Cut to the chase anyone with an IVA is looking at 75% Loan to Value now and not the 85% most of us have been used to.
Also for some reason China lenders are in the same boat as the US.
MY PERSONAL VIEW IS THE SUB PRIME MARKET IS DICTATED TO BY THE US AND NOT THE FSA.
I f you are looking to borrow to pay off your IVA or looking to get a lower rate or fixed for a while do it now and contact your broker asap.

Regards
Adrian

[jpj]

Hi Adrain
There are millions in this country facing the same rate rise jump as you..mine jumped £300 a month last year.
i wonder how creditors view the position on this? It is the banks that we mainly owe the debt to,and it is the banks that have put up interest rates.
My IVA repayments are £700 a month, and in theory should have dropped to £400 due to my end of fixed term mortgage ending. (luckily my income rose and one balanced the other out.)
If the max we can all mortgage to is 75% then this has its +s and -s....
Yes if you want to remortgage and pay off your IVA early it is bad news...but if you want to wait till year 4 and do your equity release and cant get a motgage for more than 75% this means you get to keep more equity! you can only mortgage to 85 or 90% if someone will let you!
I urge anyone who is going to come off a fixed rate mortgage soon to investigate what new deal your going to expect (cause they are not great!) find what your new payments will be and warn your IP...IN ADVANCE...This will save you suddenly finding you cant pay your IVA and mortgage payments due to the rate rise!
JPJ

[ray_a]

Yes

I have been monitoring this since my break was interupted with this news.

My comment on this is that you can only borrow what you can afford on the equity release and I am sure someone will have a better idea but my view would be to hold on and get the best mortgage deal you can on equity release in year 4 and see what happens then.

As for fixed rate mortgages well I think any increase will most probable mean the IVA will have to be revisited and a variation order placed to reflect the increase in mortgae costs.

Very interesting times and those of us who are in an IVA may well be ahead of the game in what is going to be a very nasty few years!