measuring mortgage stress

[j]

Following on from Rolf Lathams comments about measuring mortgage stress today

I love the term "mortgage stress"

The problem here is that the stats dont show how much of this mortgage stress is due to

1. Harvey Norman induced "post move in disorder"..................wow our new house is so empty, lets get some buy now pay later.

2. General Affluenza............focus on a newer or larger vehicle, a new tele


I suspect if we did the ground work, we would find that mortgage stress isnt caused primarily by the mortgage loan, but often by other addons that have sucke up any buffer the borrowers had.

yes, sure there are many issues of gen mortgage stress issues, but what are the REAL numbers

Hi Rolf

This is a good question?

I believe Government and the banks do not measure mortgage/financial stress statistically.


So no statistical or objective warning signs other than surveys of people eg Fujitsu Reports.

Perhaps it could be a subject for academic research?

How to measure the financial health status of people
Measurements like LVR, DSR, arrears on any loans, arrears on bills etc etc I (I am sure there are countless other factors that could be considered)

All information could be measured on a suburb, postcode, LGA, regional and state level. Personal details kept strictly confidential and private.

However measure and monitor financial status of each suburb or postcode.
This could yield where are the high DSR suburbs, high mortgage stress suburbs and other factors.

So investors could understand risk and opportunities better

 

[keithj]

I believe Government and the banks do not measure mortgage/financial stress statistically.

Both the RBA & the banks, and also mortgage insurers monitor these closely.

How to measure the financial health status of people
Measurements like LVR, DSR, arrears on any loans, arrears on bills etc etc I (I am sure there are countless other factors that could be considered)

All information could be measured on a suburb, postcode, LGA, regional and state level. Personal details kept strictly confidential and private.

Read some bank annual reports & RBA speeches to find this info... and consequently they often appear here on SS .

And be v. careful about the various definitions of 'mortgage stress' floating around, the tabloids definition sells a lot of newspapers, but isn't especially relevant.

 

[RumpledElf]

I am SO not in mortgage stress since becoming a landlord. We pay about $30 a week after the rent comes in. Once the new house is built we'll be way ahead after rent - two rents in, 3 mortgage payments out. No car debts, no credit cards, no furniture on Harvey's finance, nothing. Nothing we want (besides a new house, which we are frantically saving up for) and a looming baby bonus for a baby that already has several boxes of yellow and green baby clothes leftover from the last one just sitting here waiting to be pooped on.

Would be screwed if we were renting or worse, living in the city.

 

[Witzl]

i love the fact that NO WHERE does it actually qualify what defines mortgage stress.
How is it measured?
How is "severe" mortgage stress measured?

I rekon its all a load of crap TBH.

 

[Rolf Latham]

I do believe credit over exposier is an issue................otherwise our LMI providers wouldnt be so risk averse that the ponzi scheme almost falls over .

But to class the "affluenza bug" as mortgage stress sends the wrong message

ta
rof

 

[VYBerlinaV8]

We did the interest free thing once, and never again. We only financed about $1300 of stuff (couches), and figured that despite having the money in the bank it would be good to defer payment. So... we pay the minimum each month, and a month before the interest kicks in, the wife rings the finance company and asks for a payout figure (it was about $500). We make an extra payment in accordance with their instructions to finish the loan off, but they kept sending credit cards (which I kept cutting up), wanted to increase our credit limit (which I refused to do, and indeed asked them to close the account), and generally kept the facility open despite being told repeatedly to close the account. Then, a year after I thought it was all finished, we were getting some finance sorted to buy our first IP, and the bank asks about the credit facility we haven't declared! I ring the finance company only to be told they've reopened our facility for us before Christmas. So, I threatened them with going to the banking ombudsman, and formally wrote to them telling them to close the account. What a hassle.

Bottom line, we've learnt our lesson. It cost us nothing in $$, but lots in hassle.

Oh, and when we first moved into our PPOR (we built our first home 8 years ago) we had three rooms with no furniture at all for almost 3 years!