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Re: Northern Rock
So I take it none of you sad lot bought any Northern Rock shares last Friday for a quick sale on Monday. 35K between a few of us - easy money - easy money indeed.
Anyway keep hypothesising errr I mean dreaming about a housing crash. One thing is for sure current prices have been stagnant which equates to 'crash' but in situations like this there will always be buyers lined up. Its an interesting time... I'm trying to get hold as much capital as I possibly can over the next year to capitalise on the situation.
Very good point about the credit crunch this is indeed an issue as some people have stupidly taken their house value as part of their assets errrr wth ! The house does not belong to you. I myself - technically don't own any property but if I was a dreamer I would say I'm a millionaire on paper --- err yeh right.
The equation I have been using for a long time is (this keeps be very safe)
House value = Price you bought it for + Interest you have paid since the purchase.
This is the bottomline figure otherwise the banks would never give us a mortgage. This is the break even line and something you should really bare in mind at all times.
Market value will always be the market value regardless - you pay what the market dictates it has no representation to the true value of what you are buying, but to cover yourself you must make sure that your debts are not countered with fictious housing market prices.
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