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Over 50's club

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GimmeMedals Oct 2021 10:38am, 29 Oct 2021 21,533 posts	Quote Pin GimmeMedals I remember the scarily high interest rates of the '90s and how many people went into negative equity on their houses. We were ok (ex-OH had bought his house in the '80s and I was fortunately earning enough to pay the mortgage when he decided to drink his salary instead of paying bills), but it has always stuck with me so when Mr GM and I met, we got the lowest mortgage we could get away with so we didn't get caught out if interest rates went up so high again. Of course they haven't, so we could have bought a more expensive property and been fine, but that's hindsight for you.
McGoohan Oct 2021 10:50am, 29 Oct 2021 50,552 posts	Quote Pin McGoohan After having a bit of a negative equity disaster in the early 90s on selling a flat we had a few strokes of luck after that, though they didn't all feel too lucky at the time. 1. When Liebling's grandma died she left her a load of shares in her will that suddenly went hugely up in value. 2. The house we bought (and now live in) was very badly marketed as 2-bedroom - it has 4, but the occupant had converted it to two 2-bed flats. No-one else had looked at it as it was severely overpriced for two bedrooms but undervalued for 4. 3. And then I was made redundant after 17 years with the same company - selling the shares and my redundancy money paid off the mortgage.
Rosehip Oct 2021 11:21am, 29 Oct 2021 22,840 posts	Quote Pin Rosehip We had negative equity when the company relcated to Stevenage in ‘94. Thankfully the moving package included a very low interest loan to pay that off. Moving out of “London” we were able to buy a house over twice the size for the same mortgage.
bigleggy Oct 2021 12:28pm, 29 Oct 2021 6,862 posts	Quote Pin bigleggy I was a mortgage administrator in them days. Interest rates hit 15% and I went from dealing with 15-20 new applications a day, to 4 in a month.........and redundant a month later :-/ Mad mad days !
Bazoaxe Oct 2021 12:54pm, 29 Oct 2021 21,140 posts	Quote Pin Bazoaxe Negative Equity didnt seem to hit Edinburgh. Or maybe I was just lucky that it didnt hit the properties that I was in and they seemed to not only hold their value but grow in price. I find myself in a position where after 23 years in a home I am now mortgage free, but if I was to try an buy my own house I would not be able to borrow enough money and would need an eye watering amount of my own cash to secure the purchase.
jabberknit Oct 2021 1:05pm, 29 Oct 2021 4,065 posts	Quote Pin jabberknit We were struggling in the 80s in our first house with whopping interest rates, I wasn't working with 2 small children, and Mr JK got made redundant. He then had the great good fortune to get a job with a building society, which in those days came with a subsidised mortgage. That was such a relief! So much of family finance seems down to luck, as you have to make decisions based on so many unknowns. Paying off the mortgage was a fantastic day for us some years ago! DD1 and her OH were mainly able to get on the property ladder in London because two of her OH's grandparents died and left him some money.
Fenland Flier Oct 2021 3:25pm, 29 Oct 2021 3,652 posts	Quote Pin Fenland Flier 3 jobs to pay the mortgage, divorce and negative equity for me in the early 90's. Shit deals on endowment policies and high interest rates in the 90's haven't helped us at all. I'm currently overpaying and hope to clear our mortgage by the age of 65 but can't retire until I'm 68, never having a decent career or pension.
LazyDaisy Oct 2021 3:49pm, 29 Oct 2021 34,534 posts	Quote Pin LazyDaisy We were really lucky in that awful high-interest period - OH had two good promotions at work so we could afford to buy a much bigger house than we'd expected. Big houses were underpriced for their square footage because so many people were unable to afford the mortgage on them, but we just about could. By far, the best investment/purchase we've ever made, but even so, for the first few years we were here (and when we had two pre-school age children so I wasn't working) money was very tight indeed.
macca 53 Oct 2021 4:08pm, 29 Oct 2021 29,234 posts	Quote Pin macca 53 We are similar to LD, two small children (born 88 and 90), but I got a big promotion in 87 with which we took on a bigger house (it stayed as our house until we retired in 2017). Nevertheless there wasn’t much spare cash about for a few years and camping holidays became a thing (the kids have only understood in the last few years that it was camping or no holiday!).
um Oct 2021 6:18pm, 29 Oct 2021 5,335 posts	Quote Pin um Bazo - most of the people I knew with negative equity were on interest only, endowment type mortgages. Fixed payments that didn't cover the interest and so the outstanding amount went up. Faster than the house price. Sometimes the first they knew was hen they got a letter some years later saying they had a shortfall and the endowment payout was less than the outstanding mortgage. At the time I was glad I'd stuck to a repayment mortgage where I had a bit more visibility & control over payments.