Mortgage Rates

The 2020 Mortgage Collapse – Should YOU Be Concerned?





The 2020 Mortgage Collapse – Why YOU Should Be Concerned! Today, we’re going to be investigating the rumours around the apparent ‘upcoming mortgage collapse’ where many experts are claiming that you simply won’t be able to get a mortgage very soon with banks and mortgage lenders going bankrupt!

So firstly, let’s start with what we do know: a large amount of mortgages and home loans have been frozen across many Countries…

Many mortgage companies have huge delays on processing mortgages, with some lenders backed up for months.

But on the flip side, many house sales with valuations are going through at rapid speeds for 2 reasons: even though people suspect that prices might drop, they’re even more afraid of not being able to get a mortgage.

Because they know they might lose their job, they’re taking the lesser of two evils by locking in a low interest rate and getting a house now rather than later, even knowing it may drop in value

Lenders are being stricter about who they give a loan to due to the risk of unemployment, because they have no idea whether that person will lose their job in the next few months

Lenders know that as unemployment is going up daily, your risk of default increases daily too. Many people therefore, aren’t able to get a loan.
And if they get furloughed or their salary decreases, then their affordability for their next house will most likely decrease too. Which in a worse case scenario, could result in decrease in house prices City, County, State or Country wide.

Moving forward, we’re already seeing tighter lending policies. Especially if millions of people are going to be living off 80% of their previous earnings.

If interest rates have been reduced to 0.1% by the central bank, then why are mortgage providers charging higher interest rates… ? Shouldn’t the banks have passed on these reduced rates to you the consumer?

Not surprisingly, mortgage lenders have actually increased their interest rates due to the high demand, but they should, I’m not saying they will, but they should trickle back now as lenders catch up with the demand, but just remember, the banks are not your friends, they exist to make profit and that’s it.

It’s a simple case of supply and demand, so many people want to get their mortgage right now for fear of losing their job and the banks know that so they are increasing their interest rates.

Instead, some banks have actually increased their interest rates! which you may think is strange but the reason they’ve done this is because they won’t be able to get rid of the loans if they don’t. They’re also taking advantage of the fear that people have and preying on them.

If credit becomes harder to get or interest rates become more expensive, then house prices will have to fall in price too in order to meet the affordability of buyers

So it’s either going to go 1 of 2 ways – and no one knows the answer to this challenge, but let me give you my thoughts on this: and remember this is just for entertainment purposes only – I’m not a mortgage broker so this is just my opinion from being in the Real Estate industry for the last 15 years:

1. Lending will ease up and the availability of credit will become easier again. The demand for mortgages will reduce so much that the mortgage interest rates will come down as a result of competition with other lenders. OR

2. Lending will tighten and interest rates will increase, causing a housing crash – of this I’m almost certain (and the Fed knows this too, hence why they haven’t been raising interest rates since the last recession, because they didn’t want to cause another housing crash…)

So how do I think this is going to affect you?

Well if you’ve currently got a mortgage on a fixed rate then nothing’s really going to change for you during the term.

But if you’re in the market for a new home, a new mortgage or you want to refinance, then you may find things a lot more difficult. For example you may have to pay a higher interest rate in the short term and put more down as a deposit, because the bank wants a higher loan to value ratio to protect themselves against a possible downturn in the market. Especially as there’s huge demand right now for cheap money.

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41 comments

  1. Want to learn more about Property/RE investing? See me LIVE at my upcoming event, ask me questions & meet me afterwards: https://www.propertycashflowacademy.com/pca-live
    (Run twice per year in the UK, USA dates coming 2021)

    Reply
  2. First time buyers will have to come up with 20%. The days of no money down is gone!!

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  3. I could care Less !
    I paid cash for my home over 30 years ago by saving while working two jobs 7 days a week until i was 31 years old.
    I hate credit and with it was illegal for anyone to even think or say that word !
    People get a mortgage and then not long after they refinance or pull a home equity loan
    Wash , rinse , repeat !
    Then ::: omfg i can't pay my bills !!!

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  4. We are not surveyors, we are certified real estate appraisers.

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  5. I'm hoping for a huge crash! Want to buy them cheap!

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  6. Just took 70k out my house ready to buy another one soon

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  7. In buying foreclosures in 2010 I learned Deutsche Bank is a bunch of idiots…… those same idiots are still running Deutsche bank (( I can't tell you how badly messed up their mortgages were)) but cash is King …I'M will be buying

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  8. The biggest learning of the Depression and GFC was to keep the banks alive so money flows. What you are suggesting ain’t gonna happen. Prices will go down yes, and desperate borrowers will lose out, but the main banks will get through.

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  9. Good advise, will keep watching, as what you share is true advice.

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  10. Steve Buscemi ?

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  11. So, ultimately the Federal Government will hold the mortgage? Will the homeowner make payments to the federal government. If so. what happens if the homeowner defaults? The government takes the home?

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  12. Ya…lets all take advice from this guy who went bust during the housing crisis who was over leveraged on multiple adjustable interest rate mortgage loans LOL. Everybody in the US should be feel all warm and fuzzy because we are "protected" by 3 layers of horse shit debt avenues to paper over any losses or reduction in values. Sure pall…nothing to report but good times in the real estate market. If you want some real advice from someone like me who avoided mortgages like the plague during the great recession because I could see it coming a mile away…..STAY AWAY FROM REAL ESTATE. Be patient and watch the horror coming down the pike. The fed cant save shit, the debt load is too massive. There is no way in hell anyone should be adding themselves to the debt slave hoards at this moment by taking on an over inflated mortgage. Unless you got cash…stay away.

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  13. I'm excited I've been waiting for it to crash I'm waiting to buy

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  14. "Banks are not your friends" EXACTLY…. The problem is not that bankers, lawyers and politicians are thieves and liars; the problem is that people forget that bankers, lawyers and politicians are thieves and liars. The solution is remembering.

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  15. We will never know anything until it happens . You can read 1000 books but everything depends on the decision of some people. No books or papers or studies.

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  16. 30 years to pay a house, if you have a perfect health, great job, perfect marriage but the country goes to shit.

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  17. dude what happened to your voice?

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  18. check Australia, the beautiful country which belongs to Westpac Banking Corporation

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  19. United States turn communist

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  20. interesting my rate is fixed for the entire term. This is typical for US.

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  21. People will keep their cash. Most Joe Blows with clean money will keep their 20% as an emergency fund. Folks in cheaper areas will be ok but those in larger cities where the mortgages takes 70% of their income will be careful. A lot of the condos in Vancouver are empty or used for short term rentals like Airbnb. This market will pick up again but those who just jumped in the airbnb biz will have to switch to real longer term rentals pronto unless they can support the mortgages while waiting for the movie industry, the business crowd and the tourists come back.

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  22. do you have a suggestion for my wife and I? recently married I’m in the military and we need a home. i’m currently living in the barracks while looking at houses, plan on using VA loan for us. we really don’t want to rent, do you think it’s safe to buy a home right now? we will be living here in NC for the next 2 and half years. the plan is to rent it out after or selling it so looking for a good deal not just the most expensive home

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  23. 2008 the govt stepped in too late to help the lenders. There will be foreclosures again unfortunately. But not like 2008

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  24. Essentially it's credit expansion for the banks and credit crunch for the plebs. This is a recipe for housing crash once again?

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  25. Tenants are the pin that's going to pop the housing bubble coz they're broke

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  26. I can see that what you say has merit

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  27. Thank you Neil I appreciate everything you do for us well I want to speak for myself what you do for me. Because if I had to pay someone I'd be like that rabbit and screwed rapidly away from those bankers. Neil once again thank you God bless.

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  28. Is there anyway that you could translate this video in Spanish, please? I really appreciate it. God bless

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  29. It's as a result of too much debt and the everything bubble.
    This is going to be the greatest depression ever and the covid nonsense is just a smoke screen to cover up the end of this fiat currency cycle.

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  30. 0:00 – "The 2020 Mortgage Collapse – Should YOU Be Concerned?" Not if you positioned yourself for this collapse in advance. I've been preparing for it since 2014. My mortgage is less then 100k and I've only owned my house for 22 months.

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  31. My mortgage is through a private bank and on an adustable rate.
    I was told this is good for situations like this?

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  32. what do you think about spain property was looking up now this has happend

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  33. Hi Neil. I am a subscriber, and I do hit the like button, but not this time. I am a very ethical mortgage broker with my own business and aI value your videos and your candid approach, but come on mate, we're not 'all like that'. I have been explaining to everyone that comes to me that I would love for them to do business with me every 2 years but the right thing to do is fix for longer, because I have been telling them that there is always a risk rates will go up, and they could find themselves regretting they didnt fix for longer while they had the opportunity, and very often, only for a few quid more. I am very realistic with my clients, and it is a shame you have put us all in the same box here. Hey, if you need a new broker Neil, I am here for you pal 😉

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  34. Very Good movie. Now I Can watch funny cat videos 😂

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  35. I am a first time buyer in the process of buying a new build home in the UK. I got my mortgage offer in before coronavirus hit the fan. 1.99% on a 5 year fixed rate term, with a 50% loan to value. Back in February I offered £300,000 for a house that was advertised for £325,000 and it was accepted by the developer. I am worried about house prices dropping significantly due to the virus, but I am getting this house for £25,000 less than other buyers who have already bought the same type of house on the development and if, as you say, interest rates are about to go up more, then maybe the fact I got a low interest rate somewhat negates property prices going down? Another thing is, I could probably pause the sale, wait it out and maybe offer even less money for the house when the dust settles, or offer less now?

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  36. I just put a reservation fee on a new build in London and working on my mortgage application. The offer of principle only gives me 55% not the 75% they promised me earlier. Damn I don’t know what to do, lose 2500 pound and wait or borrow personal loan then go with it? Don’t know what to do now. I have been waiting for this price for 8 months!

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  37. The Federal Communist resurve.

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  38. Thanks again great video, I can't wait for the housing market to crash I've waiting to buy forever. If interest rates go up in the immediate future post current crisis, do you thing they will come down by the end of this year?

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  39. Thank you. I honestly dont know what will happen. I dont even think they know to be honest.

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  40. Great!!

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  41. Thank you!

    Reply

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