Property prices thread

[HVC]

How does refinancing work in the states? Why would your bank refinance at 2% if you signed at 4% for 30 years?

[Admiral Yi]

How does refinancing work in the states? Why would your bank refinance at 2% if you signed at 4% for 30 years?

I think it's a different lender usually.

[DGuller]

How does refinancing work in the states? Why would your bank refinance at 2% if you signed at 4% for 30 years?

They don't have a choice in the matter.  You always have the option of repaying the mortgage early.  This is exactly what you do when you refinance, you take out another mortgage and immediately repay the first one with the loaned amount.

[HVC]

So basically you pay off the principle with a new loan. Are there any penalty fees?

[DGuller]

So basically you pay off the principle with a new loan. Are there any penalty fees?

I don't think so.  If your rich aunt died and left you with a bunch of cash, I think you can pay off your principal in one shot without any penalties.  There are refinance fees, though, so it doesn't make sense to refinance for 0.1% lower rate.

[Josquius]

There's the opposite too. Kids who've only ever known tinder and always had hook ups on tap without leaving their room.... I'm jealous there.

Are you really?  It seems pretty arid in comparison to grappling down in the mosh pit.

The grass is always greener.

But they do seem to get laid more. Though yes, possibly at the expense of fun boozy times unrelated to such things.

[Zanza]

1955:



That's apparently 85k considering the "normal" inflation.

[Barrister]

One thing I don't see discussed too often though when talking about home prices...

take a look at those pictures.  Those houses are tiny!  2 bed - 1 bath - either nobody makes houses that small, or nobody wants houses that small.

[Habbaku]

It's both. My area has a whole slew of houses that small, but they're all from the '50s and '60s and I don't think I've seen anything like them built up recently.

They're still quarter-million dollar homes. 

[crazy canuck]

It's both. My area has a whole slew of houses that small, but they're all from the '50s and '60s and I don't think I've seen anything like them built up recently.

They're still quarter-million dollar homes. 

We had whole neighourhoods like that on the North Shore up until about 5-10 years ago.  But pretty much all of that has been knocked down to create more dense multi-family dwellings.  Given the lack of buildable space here I think that is necessary.  The trick is to also build out the supporting infrastructure (schools, playgrounds, greenspace, libraries, community centres, etc etc. to accommodate the expanding population - but I am not sure we are doing a great job on that front.

[Barrister]

In Edmonton city council has had a push to build more "infill" housing - knock down the tiny post-war stuff in order to get more density.

The problem is though, while in some cases they might knock down a detached home to make a duplex, for the most part they're just knocking down cheap, small homes on expensive land and replacing them with large, expensive homes on expensive land.  Not sure how much it's doing for density.

[Tamas]

Prices. Must. Not. Fall.

First-time buyers may get a boost from this week's announcement that the Bank of England will no longer expect lenders to check if they can afford mortgage payments at higher interest rates – but experts do not expect it to lead to a mortgage free-for-all.

From 1 August, banks and building societies will no longer be required to stress-test a borrowers' finances with the mortgage market affordability test when working out how much to lend.

The test meant checking that a borrower could still afford their loan at the end of any short-term special offer period in the event of rising interest rates. Lenders worked this out using the "revert to" rate – the standard variable rate or tracker rate that borrowers would move on to, plus three percentage points.

[HVC]

Lending money to people who can't afford to pay? I think America tried that. Didn't end well.

[Tonitrus]

One thing I don't see discussed too often though when talking about home prices...

take a look at those pictures.  Those houses are tiny!  2 bed - 1 bath - either nobody makes houses that small, or nobody wants houses that small.

The house I live in now is a 1950's-era built for military families, and it is a on-the-small-side (by today's standards) 2-bed 1-bath.  It has been renovated a bit of course, but mostly in the lipstick-on-a-pig style (the wood floors are likely original).  My brother is a contractor and noted some of the differences from more modern homes (such as higher than normal ceilings).  And it has weird things (hold your ears UKers) like the washer/dryer in the kitchen instead a separate room.

[Sheilbh]

Lending money to people who can't afford to pay? I think America tried that. Didn't end well.

It's been in the works for six months or so and is a fairly technocratic change.

In 2014 the BofE two new stress tests around mortgages for banks - this one and loan-to-income calculations. They review them every year and last year proposed getting rid of this one so it's just based on loan-to-income - after that proposal they did a consultation etc and are now doing it. They basically think loan-to-income is the better one for guarding against too much debt.