Debt

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

Juicylucy

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

I think most people do see a mortgage as a debt. Why do people talk so much about how much is left to pay off, or make ectra effrts to may more than reuired off so that they can get their mortgage paid off early. It is just that the language is different, but the debt is the same. many people never default on the mortgage, no matter how much they are pressed to pay other debt.

The difference is, it is a secured debt, which mean the lender can insist the house is sold to repay the outstanding debt, which, all being well will mean that debt disappears, although the dispossessed still have to find housing and pay for it. Car loans work on a similar principle.

Unsecured debt, stays with people until they finally pay it off or go bankrupt - which brings a whole new set of problems with it.

JennyCee
You claim that nobody NEEDS one.
What would you do if you got married, moved into a semi furnished flat and then were able to get a mortgage to buy your first house ( 1971)
Where would your furniture come from. Remember this is 1971, no wonderful second hand shops around to buy cheaper furniture.
We were fortunate that we both had secure trades ( printing).

I remember buying a suite and bed on hire purchase, 1969.

We did buy second-hand dining table and chairs from a neighbour of my DB. We had it for over 20 years and it moved house with us twice.

Plans to scrap the credit card cap of £100 for smaller, everyday purchases will just prove too fatal.

I do think managed sensibly credit cards are a good asset. I have a Sainsbury's credit card, I got signed up for that in the store itself, I only use it for grocery and household shopping nothing else, and my payment in full is collected by dd. Other than that I have an M&S card for fripperies. A Barclaycard I don't use very often and of course my debit card. I always pay off what I owe every month, I became sensible in my mid twenties apropos of getting in debt I've never done it since. I do think we need credit cards for certain situations they're very much a factor of modern day life, it depends on how we use them, I agree it can prove ruinous the roll up of interest that can accrue is shocking especially for those that juggle with several and pay of the minimum amount every month.

Juicylucy

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

I never saw that as a debt either when I had one - nope....I saw it as equating to rent...but I would get to own the house once I'd finished paying it off (which was something I always intended to do early if I could from Day 1).

I see it as there's;

1. debt (by which I mean consumer spending in the main). So that's what you owe on credit card, overdraft, loans, borrowing personally from people and may be incurred from spending or from paying bills (when there wasnt enough income to do so).

2. mortgage (which you're paying instead of rent - as you managed to get a deposit together...but as per most people you didn't have enough money to buy a house outright).

3. student loans (which I see as nothing to do with the person themselves - it's just that what should be university grants got turned into loans instead - and that's down to the government and not the person themselves so to say).

I divide bills the same way:
a. Bills (ie my fuel/water/Council tax/communications)
and
b. NHS bills (which I regard as money I'm being made to spend to "subsidise the NHS on my own behalf" because it barely functions these days. I really really begrudge money getting taken for "NHS bills" - it goes "Earwax removal - used to be NHS/still should be", "Blemish removal - used to be NHS etc" and so it goes on. I don't regard myself as getting anything at all for "NHS bills" - just the healthcare we should all have okay anyway. The budget list for each month is divided between "bills - £x" and "NHS bills - anything they make me pay for that month, eg "Dentist check-up/hygienist - upward of £100 minimum".

Personally I make sure I steer well clear of debt (either my own or NHS debt) these days. But - yep...it's in two columns - 1. my costs 2. their costs they are making me pay.

I'd have expected sympathy for sure if I couldnt pay my mortgage back along - and for people to treat any debts I had as "my doing". There is no realistic alternative to having a house/flat to live in and, imo, you've "done your bit" if you've got a manageable at the time mortgage in the first place. My "to do when I can" list always went 1. Necessary living expenses. 2. Bills 3. Mortgage 4. NHS bills 5. Wow - some money for me to actually spend at last and about time too....

Juicylucy

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

A mortgage is a debt. People tend to pay mortgages early, there's nothing to talk about. Car loans, if people so choose, are similar.

I think the difference here is the type of debt.
We plan for mortgages and probably car buying.
We decide how much we can afford out of income.
With a car etc it is a fixed rate for a limited time.
I admit mortgages are different as the rates go up and down but we plan for those outgoings.
Credit card debt is when someone decides they must have something, clothes ,holidays and they really cannot afford them so they go into debt not realising that that debt is compounded monthly until it is unsustainable.
Thereby lies misery.

A mortgage is a long-term loan at a lower rate of interest than that on credit cards.
It might be a loan but is a different concept.

Eg at 4% a £250,000 mortgage would cost about £400,000 over 25 years, relatively cheap compared to the 15% we paid years ago.

Juicylucy

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

I never met anyone who wasn't concerned about their mortgage or class it as a debt .

Have you actually had a mortgage?

At the moment mortgage interest rates are around 4.5% and fixed rate deals are available.
Rates of interest on credit cards are around 20%

Long-term loans are different from short-term loans but all are debt.

My DH is marvellous at managing our money - moving bank accounts, credit cards and savings around to get the best deal. A few years ago we paid a huge deposit on a new car by American Express which was giving a fantastic 0% deal when taking out a new credit card, and recently we had an expensive holiday and are paying it back over 2 years at 0% interest. We have got the money in savings to pay it all, but better in our accounts earning interest (however meagre) than in others pockets!

The one thing I can think of re attitudes to mortgages differing might be because of the changes imposed to help with mortgages if one becomes unemployed.

As far as I recollect back in more Normal Times (ie the early 1980s) I wasnt that concerned about my mortgage (though I wanted it gone) because, if I became unemployed, then the DWP would be due to pay the interest part of those payments from a few weeks in, however much they were and however long I had a mortgage for.

But then they cut it and, as far as I recollect, people are now made to wait months before they get any help/there's a limit to how much help they can get - and they're told it's a loan!!!!! and they will be expected to pay it back (errrr....just how if they've just been unemployed for months?). I'd have been terrified if that had been how things were when I first took on a mortgage - scared stiff in case no-one (either employer or DWP) was basically covering my mortgage really and very scared they'd cause me to lose my house.

So maybe that's at any rate part of the reason some people are now regarding a mortgage as "debt" - because of the sheer panic as to how it would be covered if they were made unemployed? No-one should have to feel terrified about a risk of losing a roof over their head if they become unemployed due to no fault of their own.

I would say the vast majority of those with a mortgage have every intention of repaying what they can of the capital as soon as they see a reasonable chance to do so after all.

twinnytwin

My DH is marvellous at managing our money - moving bank accounts, credit cards and savings around to get the best deal. A few years ago we paid a huge deposit on a new car by American Express which was giving a fantastic 0% deal when taking out a new credit card, and recently we had an expensive holiday and are paying it back over 2 years at 0% interest. We have got the money in savings to pay it all, but better in our accounts earning interest (however meagre) than in others pockets!

We do the same. We paid our home quite quickly (before age 40). Accept good credit card deals, paying before interest begins.

Some people now cannot afford to take out a mortgage before 40.

As you say you married as teenagers and you have never worked, Norah, you are fortunate indeed.

petra

JennyCee
You claim that nobody NEEDS one.
What would you do if you got married, moved into a semi furnished flat and then were able to get a mortgage to buy your first house ( 1971)
Where would your furniture come from. Remember this is 1971, no wonderful second hand shops around to buy cheaper furniture.
We were fortunate that we both had secure trades ( printing).

1971. There were plenty of second hand shops around to buy secondhand furniture and far more auction houses than nowadays.

We married in 1968, rented an unfurnished flat. Bought a house in 1969. Both were furnished almost entirely with secondhand furniture. In fact one of our fist actions afetr we got engaged and found a flat to live in was go down to the local auction house.

A year or two before when my father retired from the army, my parents had furnished their home in a similar fashion. Furnishing with Victorian furniture, piante dor not was all the rage and some of it was relativley expensive for that reason.

Allira

Some people now cannot afford to take out a mortgage before 40.

As you say you married as teenagers and you have never worked, Norah, you are fortunate indeed.

My husband worked for 2 years, after quitting school, before we married. He's 2 years older. He's not one to spend, he saved.

I'm not sure how others save or are fortunate in waiting.

Part of the problem is the credit limit on the credit card can be high. The credit limit on the credit card that I had for years is £12k.

I had quite a bit of debt of that credit card related to expenses for our previous 2nd home. Instead of using money in the savings account to clear it. I transferred the debt to a 0% credit card and pay it over a couple of years.

It was a bind but I was not ashamed of my debt or anything like that.

I worked for years after college but it took two of us working, after marrying in our twenties, to save for two years for a deposit for a semi-detached house.

Norah

Allira

Some people now cannot afford to take out a mortgage before 40.

As you say you married as teenagers and you have never worked, Norah, you are fortunate indeed.

My husband worked for 2 years, after quitting school, before we married. He's 2 years older. He's not one to spend, he saved.

I'm not sure how others save or are fortunate in waiting.

If I hadnt had a major stroke of financial luck - right place/right time/etc at 34 = I'd have been looking to see if I could start a mortgage in my 60s (late 60s at that)!!!!!! That thought makes me feel quite sick - that someone who was a homeowner from birth so to say (or anyone) could be made to wait that long before being able to buy a home. Not even sure if anyone would have given me a mortgage.

It was such an absolute fluke that I had the chance I had - even though I was there thinking "C'mon Universe - I'm trying to manifest a way....help me out here". I'd carefully put to one side two "redundancy" payouts (so-called) and thought "Right that's pretty much exactly what I need for removal expenses/solicitor. There's still no way to find a penny for a deposit - never mind the huge deposit I need on my salary". So yep.....I proved that - albeit only occasionally - manifesting does sometimes work....and I was visualising like no-ones business what I was going to do/how I was going to live in that house I was firmly set on getting it somehow or other. I'd have liked it to be the better house in better area that I was busy visualising - but it was pretty miraculous that I managed to get one at all in my circumstances. So I wasnt counting sheep to get to sleep at night - I was picturing myself walking up a path going through my front garden, cooking in my kitchen, going for walks nearby in that nice area I'd identified. What actually turned up was a house straight on the street with a back yard in a "middling" area - so far from what I'd been picturing....but at least I managed to get one.

You get to be pretty determined to find some way somehow when you've not forgotten that a work colleague from a previous employer shocked everyone by putting herself in a position to get shot (literally!) - as she'd been unable to afford a house too and so she'd married for one! When the husband found out he'd been married for the wrong reasons (ie to have a second income to put towards buying the house she needed) he shot her. I think she was injured - not killed - but I don't think anyone blamed him for doing that - as we know marriages are supposed to be "love matches" in our country and it hadn't been. So he was livid......understandably...

Not forgetting that when I finally could get one it was on the basis that I was going to have to take in a lodger to cover the extra costs to start with. So I needed a very particular style of house - which I quickly found out was rare at starter house level and I was getting nowhere finding it.

So I went for a walk in a street I'd identified as just about affordable for me and was checking out the houses from outside and stopped dead outside one carefully assessing what I could see from the street and I was just waiting basically eyeing it up and down (roof - not replaced yet...but should last till I could move up the ladder/windows not doubleglazed yet..but should do etc).

. At which point I didn't know I knew its next door neighbour and I got spotted and invited in for a drink! It was going to go on the market within the week and I could see that a rather small cheap DIY job would change the layout sufficiently to what I needed re lodgers and it was something my father could do - so that was it = house chosen. I'd made sure that lodger wouldnt be having to walk through my sitting room to get to the kitchen. Job done before the academic year started.

When the olldest among us took out our first mortgage, lenders would only lend on one income. We bought our first house in 1968 and th lenders were begrudgingly prepared to take one salary and half a second salary into account, later on they did, as they do now and take 2 salaries into account.

The unintentioned consequence of this was it made houses more expensive because lending on two salaries means people can borrow more money and the more money lots of buyers have the mroe prices go up.

The way to make houses affordable is to limit mortgage loans to one salary per household. House prices will tumble and millions of other people, as the value of their house falls will find themselves in negative equity

The way to make houses affordable is to limit mortgage loans to one salary per household. House prices will tumble and millions of other people, as the value of their house falls will find themselves in negative equity

And the consequence of that is that many people who are at present just about managing will find that they owe more than their house is worth, not a good situation for many.

I get your point M0nica re "based on one salary" - as that particular change was what caused single me to have such problems and my starter house was so delayed in turning up (10 years!!!!!!).

At 24 I distinctly thought "Well Mr Right hasnt turned up and maybe he never will then. So I have to buy a house on my own then". They'd just made women more equal and no-one could be awkward to me about giving me a mortgage just because of the sex of my body any longer. Trying to recall the figures - but the starter houses by me were around £8,500 each then (very much the standard price for them and there are plenty of starter houses there). My memory isn't so great re what salary I was being paid - but I know it was pathetic (think it was around £2,800 and I was having to climb a payscale to get the rest of it) and so I figured I should be able to manage just just just to get one.

Then they started taking account of wifes salaries too and that did it overnight - the couples knocked me straight out of any chance - as they shot up the price of those houses. To say I was upset would be putting it mildly - I was livid at being shoved back and off the "queue" because of being single. My comments about "smug marrieds" were pointed. My "fight to be properly housed" began at that point and took 10 years and that huge fluke of good luck before I managed to get mine thanks to them.

But - realistically - I am not at all convinced it would work. Our biggest problem is we are way way overpopulated. The second biggest problem is we don't even know what our population level is during the last few years. We know what it is officially (think that's around 68 million??) - but we certainly don't know what it is really - as we know. There is an MP right now trying to find out what our population level really is and I'm anticipating he'll have one heck of a job to do so - if he can manage it at all. He started by saying "How come there are way more smartphones owned than our official population level?" There will be people with more than one smartphone - but on the other hand babies don't own smartphones etc. We all know why and we've probably all got an idea just how many people are uncounted - certainly more than a million for sure and almost certainly we are talking a noticeable number of millions more than that.

So I would say the problem is the uncounted millions are also requiring houses on the one hand and then there's the second home factor on the other hand (ie quite a few people have second homes and one of the big drug company people - Pfizer? owns two second homes in a nearby town to me. That's just one household).

Then there's the minnow in the pool - I'm quite a fan of watching those urban exploring channels on YouTube and so I wonder just how many houses are sitting there in limbo (probably whilst relatives argue it out about inheritance). I know of one/probably two of those abandoned houses easy walking distance from my home and, as far as I can see, neighbours are jealously guarding them against anyone taking things any further re bringing those houses back into use (one of them told me direct that she didn't want "work" being done on the house next to hers). My own outlook is basically "Do do the work any house needs" - just as long as they don't increase the size of it (that's a problem of itself - and I've seen windows being put in roofs near me since I came here and am thanking heaven no-one has tried a house extension or garden-grabbing near me - if only so I don't have to spend time fighting it).