Ok so how are people mainly affected by this "credit crunch" thing

[stoppinattwo]

And what do you propose to do about it as a family???

i mean proportionally less, iyswim!

I'm not sure, PP, because the only time we had to use it we were two adults and one child - plus I was expecting DD2 - in a two bed flat.

But the forms did come with notes as to what the council guidlines were regarding suitability in size v. number of occupants in the home, including non-related v. occupants of the same family.

We have shelved plans for an extension, sticking DH to work in the shed and knocking down a wall upstairs instead. The money for the extension is now going to pay off a bit of our mortgage and have got money going into ISAs to offset some more of it.

We weren't happy at the size of our mortgage and want to concentrate on getting that down .

It is hitting several people we know, but all of them have spent the last few years basically living off the equity in their house so not a big surprise.

We have very little big debt and a small mortgage so unless either of us lose our jobs we should be OK. We have a small loan which will be paid off this summer and we won;'t be taking another out. Only problem is that we were thinking of replacing our car soonish but we won't now.

I have never understood why people raise money against their house equity to buy things they would like (rather than need) ...I am pleased I was brought up to minimise debt and buy things when we could afford them ..

If DH stays employed the credit crunch shouldn't affect us unduly .. although there might be some implications with our remortgage next year

'I have never understood why people raise money against their house equity to buy things they would like (rather than need) ..'

It does seem rather foolish, especially if it's your only big asset.

I've only seen that work during the boom when some friends of the ILs, who'd bought their Edinburgh home for £17,000 borrowed against it to make some much needed repairs/updates that pushed the value of the home they wanted to sell off asap so they could downsize.

It was basically short term, after they'd taken advice that making those repairs would add even more value to the home, which they sold a couple of years ago a week after it was on the market for £220,000.

They'd only borrowed £30,000 - roof, outside rendering, new kitchen and bath.

Well, I suppose this answers my question (similar to Noddyholder's) as to how "ordinary" people (like DH and me)) have been managing to buy new cars, go on fab holidays, dress to the nines (unlike DH and me) etc.. People are up to their eyeballs in debt. Maybe my Primark wardrobe will set a new trend...

all my rich city banker/hedge fund manager friends are shitting themselves. good.

I always wondered that myself, clam. It never occured to me taht someone would borrow against their house for that?!

I mean, like I said, maybe, during the boom, if you were already going to make a HUGE profit, needed to downsize and the repairs you were going to make were going to pay off even more.

Or if you owed the IR big time and they were coming to seize goods.

Or a divorce.

But otherwise, why?

'all my rich city banker/hedge fund manager friends are shitting themselves. good. '

I don't see why. People like that never get hit hard by anything.

threat of redundancies
reduced bonuses
"i'll only earn a quarter of what i earned last year" etc...

must be a hard life in the city... not.

but surely they have loads of other assets and can get jobs elsewhere?

i mean, turnover in such jobs is to be expected, since they're usually performance-based, anyhow.

most of those people are very clever with their money, especially protecting it.

[i worked as a legal secretary in the department of a HUGE financial house in the US]

but surely they have loads of other assets and can get jobs elsewhere?

i mean, turnover in such jobs is to be expected, since they're usually performance-based, anyhow.

most of those people are very clever with their money, especially protecting it.

[i worked as a legal secretary in the department of a HUGE financial house in the US]

probably...

part of my job involved reviewing ALL of their financial statements - fund managers, in the US at least, usually have to provide their legal department or contractors with this so they can be checked for any discrepancies with the laws regarding trading.

believe you me, most of those people didn't need to work at all if they were looking to lead an ordinary life.

that point you brought up befroe twig and expat.........it is such a good point about being brought up to understand that you have to save for luxury...it doesnt come on a plate. You ar doing your kids the best favour if they understand that one thing

I think that living within your means and not feeling like you have to keep up with anyone else is a hard lesson to learn

I just don't understand why you'd even think about risking the roof over your head, and your childrens', unless you're desperate.

I mean, do people realise how lucky they are to have a permanent home of their own at all?

I guess not, because if they did they wouldn't dream of borrowing against it foolishly for ridiculousness.

We own everything we've got. I have credit cards but not much on them and a Waitrose card that's clear atm. And I've paid this years tax.

Our current work project is undergoing due diligence to get 2nd round funding which should last for 2 years. We bought that forward as I don't think the venture cap will be so plentiful in 6-12 months time. So if the funding is agreed then we won't really be affected.

I wonder if we've felt the full effects of this credit crunch yet. If the country goes into recession then living costs go up and wages stay the same. Interest rates increase and expendable income is depleted which has a knock on effect for businesses, jobs etc. I remember the last one it just creeps up gradually.

I've felt the effects with stock market investments. I fear there may be higher falls to come.

I just wish that there were people who were straight talking.......you cant seem to trust banks mortgage lenders. How irresponsible to allow people who obviously dont understand the implications of reckless borrowing to "keep up with the jones's"

Bring back stuffy old banks i say!!!

If you cant save for it then dont buy it.

Well the credit crunch cost me my job I used to work for an American finance company which closed its UK operation. They were heavily involved in sub prime lending in the US and needed to reduce costs.

Can't sell my house in Hampshire, need to move to Leicester.

Lubyloo, sorry to hear this. Think you may be the tip of the iceberg but lets hope not.

I work for a global company which is most famous for credit scoring. Luckily work seems okay at the minute, and DH has just changed jobs (a few weeks before the old company announced they were halving their work force!) so job wise we appear to be okay.
Our mortgage is still a fixed rate for 3 years, so we're sitting pretty there. Our loan is fixed, just moved my credit card balance to a 4.5% for life of balance deal, we are very conservative with gas and electricity anyway, currently the only electric in the house is the modem, router, fridge/freezer. Everything else is off.
The only issue for us - we cannot sell our house. We are in a two bed, and until we sell, we cannot consider another child

I hope we will be OK. DH sells to the construction industry so they might take a bit of hit, but I have been waiting to be made redundant for over a year now, so don't think that is entirely credit crunch related when it happens. I think we could afford for me to be made redundant - our mortgage payment is about 30% of DH's take home a month and presumably we would qualify for some tax credits then. Although I guess a lot of luxuries will have to go because I will struggle to get another job at the same level I am now.

I don't get buying cars, holidays etc on your mortgage. But I think improvements to your house - extensions, loft conversions etc are a different matter. The only time we got an extension on our mortgage was to landscape the garden, with patio etc and was a very low number of 1000s (2 or 3 I think) and also we didn't extend the term only the overall sum.