Fear not, I haven’t had a Charlie Sheen style melt down and taken to singing Cher songs; in part this is clearly evidenced by still working in the mortgage world where the expression ‘winning’ simply cannot apply.
But what if you could turn back time? Would you do anything different? If you are renting, in negative equity or mortgage free we are hoping to get an answer about your feelings on your lot as we enter into a new year.
For your writers part I can say that negative equity is a fact of life that I am used to living with (on a personal basis), but if I was to go back in time and do things differently would I be in a far different position today?
Yes, I would have likely done something else with my savings that put it at risk, but the nice thing would have been that without leverage (borrowing) that would have been all I could have lost.
But the ‘loss’ for me isn’t really about capital balances, that would only be correctly applied if it had to be realized, rather it is about paying more every month for an asset than I may have had to pay for it. The whole idea of borrowing is about moving money through time and paying for it, so instead of having disposable income €X you end up making due with €X less the cost of paying for the over-valued portion.
For people renting 2012 is likely to be a critical year of deciding to opt in or become a long term renter, with Tax Relief at Source being continued and prices 52% down it would take a Japaneese (rather than British/American/Swedish or Finish) sytle meltdown to incur a bad outcome in the long term.
But do people want to be tied down to one location? Do they want to have a mortgage choice which harks back to the days of Henry Ford’s maxim ‘you can have any colour car you want as long as it’s black’ (in this case any mortgage as long as it’s standard variable, the obvious difference being that you can’t just ‘get’ a mortgage any more).
Do you think 2012 is going to be a good or a bad time to buy? In today’s poll we’ll ask you about this and right after the Christmas break we can argue about the results – because for now at least there is some celebrating to do!
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