geezer466 wrote:
Certainly a prime example of why fiscal responsibility should be on the curriculum in our schools.
State education is very unlikely to overcome what is in effect political propaganda. The housing "value" boom, with readily available cheap money were all part of the political "feel good factor" that was officially created to bolster the New Labour experiment.
From the article:
http://www.dailymail.co.uk/femail/artic ... ments.htmlQuote:
And through a combination of bad financial planning and events beyond our control we were forced to sell.
Shona Sibury makes it sound like some kind of accident. They forgot the golden rule; to live within their means. I suspect they allowed themselves to be seduced by all those artificially glossy TV property programs, and backed up by the New Labour experiment of painless wealth.
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Certainly, we overstretched ourselves when we bought our lovely period home for £419,000 in 2002. But with mortgage companies practically throwing loans at us in a rising property market, we slept soundly at night, smug in the knowledge the house was making us money.
On your own admission “we over-stretched ourselves”. You didn't buy it – you BORROWED money you should have walked away from. As early as 2000 it was clear that the big lend and borrow to buy ever-increasing-in-value-houses was a scam that was destined to disaster. And that brings me to another common misunderstanding; mortgagees and home-loan borrowers are constantly referred to as HOME-OWNERS. They are not home-owners UNTIL the entire debt has been redeemed.
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Heavily pregnant at the time, I wandered dreamily through the vast, airy rooms imagining my children growing up here.
That's another problem; too much imagination and insufficient reality. The heart was ruling the head – not uncommon in modern times.
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Besides, with the crisis in the UK pensions industry in full swing it made sense to put everything we owned into a house.
The pensions crisis should have been a very clear warning that something was seriously wrong in the world of finance.
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But over the next seven years we steadily, and stupidly, stretched ourselves too far. It started with the thousands of pounds we spent renovating. When we ran out of money we didn’t worry — we just remortgaged.
Just the same as Gordon Brown did with the national economy. How did so many apparently sensible people come to believe that houses were money trees just waiting to be harvested?
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In our defence, we weren’t spending the money on expensive designer clothes, luxurious holidays or flash cars. Much of it was going on school fees and upkeep of the house. By the beginning of 2008 we had remortgaged three times, taking out a staggering £500,000 loan on a house that wasn’t worth much more. Our interest-only mortgage payments had soared to nearly £3,000 a month.
Debt is debt whatever the reason for borrowing money. Anybody who takes out an interest only mortgage isn't buying ANTHING – they are renting from the “lender” and gambling that inflation will inflate their debt away. Not exaclty sound economics.
I don't believe Shona Sibury is as hard up as she makes out:http://journalisted.com/shona-sibary?allarticles=yes