Boomer idiot MEW sad face

[Boglet]

https://www.bbc.co.uk/news/uk-england-nottinghamshire-66958018

I’ll preface this by saying OK, they don’t fit the technical definition of boomer.

This story on BBC caught my eye this morning.  Essentially a couple (jointly) took out a loan against their house in the 90s for a new car and some home improvements on a Shared Appreciation Mortgage. Now because the value of their home has skyrocketed, if they were to pay it back it would be a large amount and this is obviously completely unfair.

Quick fag packet calcs based on the numbers in the story. 75% of appreciation owed, Barclays want 150,000 of 250,000 value so appreciation 200,000 and house value 50,000 at the time. They have to pay the original principal as well so call it 165,000. If they sell for 250,000, they come away with 85,000 (minus fees and blah blah). So yeah, far from a great deal but they’re not being left penniless.

To get those numbers with a conventional loan, borrowing the £16,500 for 25-30 years the equivalent interest rate would only have to be something like 8-9% anyway. Not exactly payday loan territory.

Now one of them has died and the other one is playing the ‘boohoo we didn’t know what we were doing’ game to be let off the hook. I’ve personally never heard of a ‘Shared Appreciation Mortgage’ before and it sounds like a pretty lunatic idea but then pretty much par for the course I guess.

“We could end up with no house”. Well yeah, that’s what happens when you sell something. Surely the answer is “don’t sell then”? She’s 89, frail and has flu. Going into care for long periods probably isn’t going to be an issue. Presumably it’s the son who stands to inherit who is the driving force here.

Honestly I’m so sick of retarded boomers who somehow managed to fuck up a golden hand and still come out slightly ahead.

 

[King Penda]

Bit of interest ffs lol. Yes it’s the son pushing this

[Inigo]

One of my neighbours did similar for a smaller percentage, but to fund chemotherapy for her dying husband as the NHS refused.  I asked her at the time if she was sure she was comfortable with the idea and she insisted she was.  Now she's a bit grumpy about what she has "given away" and was looking at ways to undo it.

She has no dependents, so no real problem as far as I can see.  Ideally, to my mind, she needs to spend the entire value of the house before she dies.

[Loki]

The new car is probably bean cans by now as well 

[Boglet]

https://www.bbc.co.uk/sounds/play/m001pmcb

Here's the interview, starts at about 19 mins.

I really can't understand what the gripe is. The only reason you owe a lot is because your house has 5X'd. Perhaps you'd be happier if your house was still valued the same as when you bought it?

I have to say though - nothing says 'we're about to blow an enormous housing bubble' like pushing shared appreciation loans.

[spunko]

They were only offered between 1996 and 1998 - so in other words they've had 25 years to arrange an alternative. Now that the mum is on her way out, the son sees only pound signs. Sickening.

[One percent]

3 minutes ago, spunko said:

They were only offered between 1996 and 1998 - so in other words they've had 25 years to arrange an alternative. Now that the mum is on her way out, the son sees only pound signs. Sickening.

Yep, as I posted on another thread where this came up, the son has suddenly realised that the bank owns his inheritance.  Tough.  
ive a couple of mates, both single with no dependents. In their position id be going for equity release and spending the lot. No point leaving it to the cat charity. Even though that would keep my daughter in work.  

[Boglet]

2 hours ago, Loki said:

The new car is probably bean cans by now as well 

 

'Hope you enjoyed that car dad, it was the most expensive Rover 200 ever'

[One percent]

1 minute ago, Boglet said:

 

'Hope you enjoyed that car dad, it was the most expensive Rover 200 ever'

I’m thinking that there are a lot of people in this situation currently. Not through the financial deal these people took, but through scratters and idiots that have over leveraged , thinking interest rates were at a new normal. It’s going to be interesting watching it all unravel. 
 

[belfastchild]

31 minutes ago, One percent said:

the son has suddenly realised that the bank owns his inheritance. 

That he has probably already spent a large chunk of.

[Harley]

So nothing to do with boomer other than in the title and last sentence.  Virtual Dosbods signalling!  

Edited October 10, 2023 by Harley

[One percent]

39 minutes ago, belfastchild said:

That he has probably already spent a large chunk of.

As they old saying goes, don’t count your chickens…

[Boglet]

27 minutes ago, Harley said:

So nothing to do with boomer other than in the title and last sentence.  Virtual Dosbods signalling!  

I already said not technically boomers.

However for my purposes anyone who was of working age to benefit from all of:

-Final salary pensions

-Sensibly priced housing

-miras

-No higher education fees

-Ask sid

-a cohesive society

-etc

Is basically a boomer

😉

Edited October 10, 2023 by Boglet

[Frank Hovis]

1 hour ago, One percent said:

I’m thinking that there are a lot of people in this situation currently. Not through the financial deal these people took, but through scratters and idiots that have over leveraged , thinking interest rates were at a new normal. It’s going to be interesting watching it all unravel. 
 

 

Isn't it.

All the jam today plate spinners, remortgaging to unlock the equity in their homes, maxing the credit card and switching for the the zero interest introductory offers, cars on lease or PCP because they want a better one in three years.

They will own nothing.

And they will owe a lot.

 

Financial recklessness has been actively encouraged for twenty five years at the same time as wages have consistently lost real value to inflation; the growth in debt has offset the lack of pay increases.

And now, with interest rates back to normal levels, for the reckless comes the reckoning.

[MrLibertyRedux]

1 hour ago, Frank Hovis said:

 

Isn't it.

All the jam today plate spinners, remortgaging to unlock the equity in their homes, maxing the credit card and switching for the the zero interest introductory offers, cars on lease or PCP because they want a better one in three years.

They will own nothing.

And they will owe a lot.

 

Financial recklessness has been actively encouraged for twenty five years at the same time as wages have consistently lost real value to inflation; the growth in debt has offset the lack of pay increases.

And now, with interest rates back to normal levels, for the reckless comes the reckoning.

Happened to a relative my age back in '08.

18 months beforehand "got this", "got that" "done this" "done that", complete with schoolboy sneer and hand chop.

PCP Range Rover and high end Mercedes. Pilots licence, exotic holidays. 10's of thousands worth if not more in stupid toys. House worth over half a million quid that they bought in the 90's for 80k and had no equity in. Was bragging at a wake.

End of '08 at another funeral "I've had to go bankkrupt".

Basically remortgaged nearly half a million quid on lifestyle.

 

Edited October 10, 2023 by MrLibertyRedux
spellink

[Frank Hovis]

1 minute ago, MrLibertyRedux said:

Happened to a relative my age back in '08.

18 months beforehand "got this", "got that" "done this" "done that", complete with schoolboy sneer and hand chop.

PCP Range Rover and high end Mercedes. Pilots licence, exotic holidays. 10's of thousands worth if not more in stupid toys. House worth over half a million quid that they bought in the 90's for 80k and had no equity in. Was bragging at a wake.

End of '08 at another funeral "I've had to go bankkrupt".

Basically remortgated nearly half a million quid on lifestyle.

 

 

I bet there are loads like that, though they just about manage to hold onto their house by working up to or past SPA.

The banks have enabled them to spend at stupid levels because they have the security of the mortgage on their house, second, third, fourth mortgage please go right ahead.

It's not any specific aspect of the spending which is stupid, I've known several with a PPL or going on exotic holidays, but it's the people like your relative who just have to outspend everyone else on everything who are going to come a cropper.

 

I don't know anyone that bad but I do know one bloke who inherited £600k a few years back, used maybe £400k to buy a decent home and since then has had two consecutive workshy girlfriends who he has spent to impress with weekly meals at expensive restaurants, fancy holidays, a dog and now a second dog, a flash car on lease, and extensive garden work done.

He earns I would guess £26k - £28k, works full time.

There is no way that his salary supports his level of spending even though he owned the house outright because of the inheritance so has had no mortgage to pay.

And, somewhat inevitably, the money has run out. All the garden work is being funded by a loan.

He's not in trouble yet AFAIK but by spending freely he has gone from house + £200k at 35 to house - £20k at 55.

I think it only a matter of time before he takes out a mortgage on the house.

 

I couldn't let financial security, especially gifted financial security, slip through my fingers in the way that he has.

[Harley]

5 hours ago, Frank Hovis said:

.....

Financial recklessness has been actively encouraged for twenty five years at the same time as wages have consistently lost real value to inflation; the growth in debt has offset the lack of pay increases.

And now, with interest rates back to normal levels, for the reckless comes the reckoning.

A pincer movement a Russian general would be proud of.