Credit crunch 'victims'
Discussion
I'm sure everyone knows someone who is really suffering from the credit crunch (recession). I'm no different, except this person’s downfall is entirely of his own doing.
I've known the chap for years, and although we aren’t best of friends, we get along ok, he is a well respected and hard working person. However, he is one of those people who likes to show off, he likes expensive watches, expensive cars, big houses. Image is everything for this guy and his wife.
Back in May 2006 he completed on a £500k house, I’m guessing the mortgage was approaching £350k. Fair enough I thought, big step up from his previous house but he's obviously doing well so fair play.
About a month later he invites me over and as I pull up on the drive he is stood there, beaming like a kid in a toy shop standing next to a brand new BMW M6. Lovely motor it is too. He takes me out for a spin and explains he got it on finance from the local BMW dealer.
Christmas 2006 and theres another new motor on the drive, this time his wifes, a brand new Boxster. How can he afford that? You guessed it, on finance.
Just after Christmas they find out his wife is pregnant. The child is born in October 2007 and to pay for all the baby goods, an extension to the house for a nursery, and a new kitchen whilst he’s at it, he takes out a loan for more than £20k.
Then the s
t hits the fan. His wife finishes work for good to look after the baby. In May 2008 the mortgage is up for renewal so jumps from around 4.5% to 7%, (he managed to renegotiate to around 5.5% I think) .
A month later BMW come asking for the balloon payment, something he pays for with ANOTHER loan, this time secured. This is when he admits to me and a few other mates, over a pint or 3, that he’s struggling to make payments.
A couple of days later, I drive past his house only to see a For Sale sign in the front garden. By September this year he’s sold up and moved into his new house. He’s gone from a 5 bed new build to a 3 bed 1970’s semi detached, a few doors down from where he lived previously to his 5 bed house. Still, there is an M6 and Boxster parked on the drive.
Last week the Boxster went back to Porsche and was replaced by an early X5 with astronomical miles on the clock. (Why not buy something cheaper to run with better economy?)
As far as I know he is still up st creek money wise. Mortgage payments, loan repayments and credit card debts. The M6 and the house he is living in are now up for sale. To make matters worse, there is also a threat his company will go out of business early next year.
To be perfectly honest, I’m finding it hard to be sympathetic.
To me, people like this are the essence of the credit crunch. Anyone else got any credit crunch horror stories?
I've known the chap for years, and although we aren’t best of friends, we get along ok, he is a well respected and hard working person. However, he is one of those people who likes to show off, he likes expensive watches, expensive cars, big houses. Image is everything for this guy and his wife.
Back in May 2006 he completed on a £500k house, I’m guessing the mortgage was approaching £350k. Fair enough I thought, big step up from his previous house but he's obviously doing well so fair play.
About a month later he invites me over and as I pull up on the drive he is stood there, beaming like a kid in a toy shop standing next to a brand new BMW M6. Lovely motor it is too. He takes me out for a spin and explains he got it on finance from the local BMW dealer.
Christmas 2006 and theres another new motor on the drive, this time his wifes, a brand new Boxster. How can he afford that? You guessed it, on finance.
Just after Christmas they find out his wife is pregnant. The child is born in October 2007 and to pay for all the baby goods, an extension to the house for a nursery, and a new kitchen whilst he’s at it, he takes out a loan for more than £20k.
Then the s
t hits the fan. His wife finishes work for good to look after the baby. In May 2008 the mortgage is up for renewal so jumps from around 4.5% to 7%, (he managed to renegotiate to around 5.5% I think) .A month later BMW come asking for the balloon payment, something he pays for with ANOTHER loan, this time secured. This is when he admits to me and a few other mates, over a pint or 3, that he’s struggling to make payments.
A couple of days later, I drive past his house only to see a For Sale sign in the front garden. By September this year he’s sold up and moved into his new house. He’s gone from a 5 bed new build to a 3 bed 1970’s semi detached, a few doors down from where he lived previously to his 5 bed house. Still, there is an M6 and Boxster parked on the drive.
Last week the Boxster went back to Porsche and was replaced by an early X5 with astronomical miles on the clock. (Why not buy something cheaper to run with better economy?)
As far as I know he is still up s
t creek money wise. Mortgage payments, loan repayments and credit card debts. The M6 and the house he is living in are now up for sale. To make matters worse, there is also a threat his company will go out of business early next year. To be perfectly honest, I’m finding it hard to be sympathetic.
To me, people like this are the essence of the credit crunch. Anyone else got any credit crunch horror stories?
I saw on the news this morning about a family who are losing their house. They took out a 100% mortgage, then had loans. Then a 3rd kid came along. Unfortunately I cannot sympathise. Don't tell me these people didn't know what they were doing. Instead, they blamed the mortgage company for lending them all the money. With the 3rd kid, if you can't afford another child, use protection!
When I took out a mortgage, I saw the small print that said "watch out - if the interest rate goes up to 12% then you could be paying X amount per month". If I could not afford it, no way would I take it on.
You make your own luck in life.
(I'll give £21k for the M6...)
When I took out a mortgage, I saw the small print that said "watch out - if the interest rate goes up to 12% then you could be paying X amount per month". If I could not afford it, no way would I take it on.
You make your own luck in life.
(I'll give £21k for the M6...)
Edited by cslgirl on Tuesday 16th December 12:13
Republik said:
duckgoosesparrow said:
He is not a victim. He is an idiot.
Amen.t but at leasst he's trying to deal with it in someway. I can't help but think that there will be a lot of people who will go round attempting to bankrupt the rest of us too before this is overduckgoosesparrow said:
He is not a victim. He is an idiot.
Sorry to say but this is about as close to the truth as he (the mate, not the OP) doesn't want to hear.There is pushing and stretching yourself (the £350k mortgage is(was) still less than 75%) and being a dim feckwit (the M6, Boxster and other stuff.) I could even forgive one of the cars but the rest id just asking to be reemed and rammed by a rhino.
To be honest, he's one of the feckers who've got us in this situation.
I hope he's looking forward to an IVA and driving round in a Morris Marina.
no sympathy here, nor for the muppet on BBC breakfast this morning who had a house, new car, extension etc on finance, then couldnt pay for it when he got his missus up the duff for the 3rd time, and lost his job..
And was then blaming the bank for allowing him to borrow it.
Those mortgage repayment protection schemes dont seem such a bad idea now do they.. Shame you thought you'd borrow absolutely as much as you could instead.
I hope he's looking forward to an IVA and driving round in a Morris Marina.
no sympathy here, nor for the muppet on BBC breakfast this morning who had a house, new car, extension etc on finance, then couldnt pay for it when he got his missus up the duff for the 3rd time, and lost his job..
And was then blaming the bank for allowing him to borrow it.
Those mortgage repayment protection schemes dont seem such a bad idea now do they.. Shame you thought you'd borrow absolutely as much as you could instead.
This has nothing to do with the credit crunch - other than it was reckless lending like this that caused it in the first place.
Some people always live beyond their means. I would wager that even if your mate earned three times what he was earning he'd still be in serious hock because he'd push the boat out even further.
Some people always live beyond their means. I would wager that even if your mate earned three times what he was earning he'd still be in serious hock because he'd push the boat out even further.
There was one in the Mirror a few weeks back. Full page article, big half page photo of a guy and his wife stood outside their house.
They lived in a nice, fairly large £350k house and their mortgage payments had gone from around £1200 a month to over £2000 a month. They were tugging at heart strngs and bleating about how they were 'struggling' and worried abot what was going to happen. They were angry their mortgage payments had gone up so much and really didn't know what they were going to do. They were worried they might lose the house. To try and ease the financial burden the guy had given up his Man Utd season tickets and monthly gym membership.
Could hardly sympathise, I just thought "sell house, downsize, problem solved".
They lived in a nice, fairly large £350k house and their mortgage payments had gone from around £1200 a month to over £2000 a month. They were tugging at heart strngs and bleating about how they were 'struggling' and worried abot what was going to happen. They were angry their mortgage payments had gone up so much and really didn't know what they were going to do. They were worried they might lose the house. To try and ease the financial burden the guy had given up his Man Utd season tickets and monthly gym membership.
Could hardly sympathise, I just thought "sell house, downsize, problem solved".
Driller said:
The banks are pretty bloody stupid lending money to someone already heavily in debt though aren't they?
And if the borrower doesn't mention the debts on the forms?Bottom line, there is only ONE person responsible for him getting into so much debt. Him.
People HAVE to take responsbility for their own actions.
Couple that had a child around the same time as us, who 'er indoors met through various baby classes, you know the sort of thing.
Had a couple of nice little businesses, guest house and an IT supply company.
Played with property on the side.
Two years ago thought bks, sold everything, got into circa £3m mortgages on short term lets
I remember having a conversation where she said to me 'There is absolutely no way that property will go down, no way at all'
Guess who now cant service the very real debt based on the myth of value?
Had a couple of nice little businesses, guest house and an IT supply company.
Played with property on the side.
Two years ago thought b
ks, sold everything, got into circa £3m mortgages on short term letsI remember having a conversation where she said to me 'There is absolutely no way that property will go down, no way at all'
Guess who now cant service the very real debt based on the myth of value?
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