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Trapped with negative equity – Housing price falls

#housingmarket #homeloans #heisesays
With falling housing prices, people who’ve paid a small deposit might be trapped with negative equity.

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  1. Negative equity was very bad in America after the GFC with suicides and depression. Property bulls will full your head with shit like , ok , pay your mortgage and you’ll be ok. Many might be , but don’t approach your bank about ANYTHING. Divorce, health problem, one house owner loses their job. Job relocated to different area , having kids, . There’s plenty to worry about if you have low equity. Don’t only listen to the rubbish about keeping your house. If you sell early enough you might get a little money, rent for a few years and re buy $200 to $400k lower . Everyones situation is different. Seriously think about how sound you are. And you need to make up your mind where prices are going

  2. Be careful out there if you are having housing or finance problems. The scammers will be coming out in droves offering low interest loans or high house prices all for an up front fee. They will tell you a story about overseas financing or investors! No matter how much trouble you are in giving a scammer thousands will not help.

  3. Twenty years ago, I could not refinance because my home loan was too small even though it was only four years old and the rate was two percent higher than the refinance loan.

  4. That's the worst situation to be in, the bank will kindly deny you debt to re-finance / consolidate other debts most of the time, and could face a forced sale with debt to still pay off without declaring bankruptcy.

  5. Prisons? Sure, if you recently bought a property with a very small deposit, theoretically you might be in negative equity territory. But if you're paying your mortgage on time, and you have no intention of re-financing, it's a non-issue. Aussies tend to move about every 7-8 years on average, so it's usually best to ignore short-term fluctuations in house prices.

  6. It doesn't take much. For a 1.2 million dollar house purchased early this year, in Sydney: Imagine the stamp duty was 40K, It dropped 35K, and it takes 25K to resell. That's 100K gone. With just a 3% fall.

  7. Majority of the 'free money' purchases with 2020-2022 0 .1% BBSY were covid owner occupied purchases. I.e not 2017-2020 investment unit splurge purchases and people that will pay to live in these homes. It will correct 10-15% for houses maybe slightly more for units but no further. Biggest risk we are seeing is residential and construction loans that havent accounted for the RBA giving disinformation. Lots more hurt to come but no meltdown.

  8. I wrote this comment a few months ago on this channel, people may not be able to refinance because they may not qualify and would then be at the mercy of whatever the lender decides for them, the lender does not have to move them to the variable rate, they could put them on the variable rate + x percent.

  9. If anyone got at a house they ought to have known that interest rates would increase to at least 5%.

    Yes property will drop 20% or so but then it will start creeping back up and the goal is to hold on to your property and then in 3 to 5 years we will be back to record highs in the property market.

    Some slight turbulence, tiny bumpy ride then we will recover.

  10. I live on the Central Coast, lots of people have moved up from Sydney in the last 18 months…and while work from home for many still exists…how long will it last? 20 years of commuting 5 days a week is an absolute grind…lets see what happens?

  11. This article is an example of jawboning the market to accept LMI a couple of years after the loan started. I’d be arguing very hard before accepting a variation like that even when changing from fixed to variable. But I don’t have that LVR so the article isn’t for me

  12. If people listened and only borrowed half what the bank was giving them then they would not have found themselves in this mess! Unfortunately greed got in the way of due diligence!

  13. remember peeps you are NOT THE OWNER of the property you have RIGHTS to it but unless you are the majority SHARE HOLDER u are nothing more than a slave to the banks

  14. I was working with guys who walked away from houses during the recession we had to have home loans were 17% and personal loans 30% its a bitter pill 💊 for people to swallow that the debt will follow you after the home is gone and probably at a higher interest rate far better to hunker down and ride it out

  15. Reducing/eliminating consumer debt, getting ahead on the mortgage, and having a small emergency buffer is smart financial planning in any economic climate.

  16. Global and historical income to loan ratio for Australia is at a guess 3 to 5 times, personally 4 would be the Max I would borrow, nieve financially illiterate 20 to 40 year olds who bought recent borrowing obscene multiple eg 8 to 12 or more should go to the sword, banks who watered down lending standards too should pay for their mistake, moral hazard, expectations of bail outs cant happen, those who gambled have to pay their losses, why should the prudent people among us carry the can? Sanity must prevail, gravity can't be defied forever

  17. Nobody was complaining when the interest rates were low. The gov were handing out free money. The cash rate was falling, property prices were booming and life was good.
    If history and nature tell us anything, it is that things go in cycles. After a once in a lifetime Summer with a high tide and blue skies people are surprised that the tide is receding and a thunderstorm is brewing.

  18. " but honey..when our bitCON bounces back….it will be okay….maybe we should buy more bitCON…." > Just rem kids…there will be many break ups over this and declining household wealth..( ie …what the dude drags in…)
    It is the way….

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