Mortgages are a pain in the ar*e! Way ot

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Mrjones2004x
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Mortgages are a pain in the ar*e! Way ot

Post by Mrjones2004x » Fri May 18, 2012 7:51 pm

I'm 31. First time buyer and to have a 5% deposit with all the extra funds (stamp duty, solicitors etc) means about £10k deposit. Sounds ok yeah?
Well you need a parent guarentor who can gaurentee 25% of the morgage! The house we are looking at is £170,000 which is ok but how can I ask my mum to be the gaurentee? If we save 10% we need about £19k deposit!

Has it always been this tough to get on the ladder?

Frustration is not the word! I blame the misses too as she was looking at houses and found one that matched everything we want need

Grrrrrrrrrrrrrrrr! :x
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irish_admiral
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Re: Mortgages are a pain in the ar*e! Way ot

Post by irish_admiral » Fri May 18, 2012 8:00 pm

Nope. Go back about 5 years and banks were falling over themselves to give you mortgages if you had no deposit and AN Other job. But that's one of the things that caused the banking crisis... too many people who were risky bets being given mortgages, and then too many of them became bad debts.

My advice? Keep saving, or borrow from the bank of mum & dad. Avoid short term fixed mortgages because the likelihood is that you won't get to the next "stage" of equity in your property, and will be clobbered with a higher interest rate in a couple of years as the banks are increasingly becoming more cautious. Go for a 5 year fix if you can find one, but I think you'd need more than 5% deposit.

Seriously... be VERY cautious about getting short term fixes on low deposits. I'd really urge you to put more into a deposit if you can, or if you go with your 5% & a short term fix, be willing to sell your gear after your initial term is up.

My credentials... economics degree, masters, and full time chartered accountant who's recently got a mortgage. Brothers work for banks. Trust me on this.
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Thinline_slim
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Re: Mortgages are a pain in the ar*e! Way ot

Post by Thinline_slim » Fri May 18, 2012 8:04 pm

That would be quite typical over here in the states although 25% would be a bit high. Any more, with the housing bubble pop, most banks won't do anything without at least 20% or a 2nd guarantor.

In my opinion though, if you don't have 20% to put down, you're either looking at to expensive of a house or you're not ready to buy a house. Just my opinion so take it as is. Another rule of thumb is that your mortgage should be no larger than 1/3 of your households take home pay. Without 20% down that can be pretty hard to do.

Good luck though man!
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Mrjones2004x
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Re: Mortgages are a pain in the ar*e! Way ot

Post by Mrjones2004x » Fri May 18, 2012 8:17 pm

It taken me 13 years to get debt free and we would like a house of our own.
My income is good at 40k but the house needs to be in my name only as my wife owns a flat she brought when the prices were high and it's still in negative equity 8 years later. (interest only morgage too!) it's rented out for now so almost pays for itself. Just gotta wait to sell it.
I can borrow £180k ish on my own which is approx £1000/month from what I was told which is ok to payback.
5% deals were about until recently I got told by a mortgage advisor today but they just stopped them!
Now we need to save another 10k! That's another year. :cry:
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Les Paul Lover
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Re: Mortgages are a pain in the ar*e! Way ot

Post by Les Paul Lover » Fri May 18, 2012 8:57 pm

Waiting another year will probably serve you better.


The higher the deposit the better the rates. If you don't want to wait that long, buy something else much cheaper - you'll start paying off some capital then.
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baytamusic
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Re: Mortgages are a pain in the ar*e! Way ot

Post by baytamusic » Fri May 18, 2012 10:10 pm

If you want to be rich, don't buy a house. That's my advice.

Buy a house when you can pay cash.

Randy Bass
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Re: Mortgages are a pain in the ar*e! Way ot

Post by Randy Bass » Sat May 19, 2012 12:39 am

baytamusic wrote:If you want to be rich, don't buy a house. That's my advice.

Buy a house when you can pay cash.
I bought my crib straight cash, boyee!
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baytamusic
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Re: Mortgages are a pain in the ar*e! Way ot

Post by baytamusic » Sat May 19, 2012 2:16 am

That's how real playas' roll.

jason41224
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Re: Mortgages are a pain in the ar*e! Way ot

Post by jason41224 » Sat May 19, 2012 3:31 am

baytamusic wrote:If you want to be rich, don't buy a house. That's my advice.

Buy a house when you can pay cash.
truer words haven't been spoken. most well off people i know got that way because they pinched pennies, lived in crappy apartments, and drove old cars most of their lives until their work paid off and were then able to enjoy life a little bit. on the other end of the spectrum, i've met a lot of people making $40k a year that live like millionaires, and these people usually pay for their lifestyle later.

when/if you do decide to get a house and a mortgage, try to opt for a 15 year, even if the rate is higher than a 30 year. you will save a lot of money in the long run.
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irish_admiral
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Re: Mortgages are a pain in the ar*e! Way ot

Post by irish_admiral » Sat May 19, 2012 10:38 am

Randy Bass wrote:
baytamusic wrote:If you want to be rich, don't buy a house. That's my advice.

Buy a house when you can pay cash.
I bought my crib straight cash, boyee!
Yeah... doesn't really work like that in the UK... rents are fairly high and house prices are quite high too, comparatively. We don't have as much land as you guys do!

A lot of people go with mortgages as they'd sooner pay back a little equity than pay rent.
Joe

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Mrjones2004x
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Re: Mortgages are a pain in the ar*e! Way ot

Post by Mrjones2004x » Sat May 19, 2012 3:12 pm

My rent is £900 per month. Better to have morgage!
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NickW
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Re: Mortgages are a pain in the ar*e! Way ot

Post by NickW » Sun May 20, 2012 8:47 am

MrJones, I feel for you. Agree, it's all a flipping nightmare.

TBH it's never been easy getting on the property market, I remember well the hassle we had getting our first mortgage back in '79. And to compound the probs interest rates rose to something daft like 18% which was crippling in the early 80's

My three sons are all the the Rental Trap, paying out so much renting they can't afford to save for a deposit.

Maybe they'll get their brake when we pop our clogs :(

Blainy
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Re: Mortgages are a pain in the ar*e! Way ot

Post by Blainy » Sun May 20, 2012 11:54 am

You're not going to lose out from prices increasing by hanging on for another year. And you'll get a better rate of course from having a bigger deposit. The base rate isn't going to increase before 2015-6, but mortgage rates appear to be increasing because of constipation in the banking system as the Admiral said. But you won't be paying a high rate. When I bought first in 1989/90 my mortgage rate was 15.4%!

It's a tough call and to be honest if your employment (or employability) is solid, why not go for it now? But you need a plan if it all goes t*ts up, which is why the banks want guarantees. They don't want your house back with a mortgage of 98% on it.

Good Luck Mr Jones!

oranginator
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Re: Mortgages are a pain in the ar*e! Way ot

Post by oranginator » Mon May 21, 2012 1:48 am

Someone from the US here, but why not rent a house? Seems just much better option to me.

I pay $865 a month for a brand new 1600 sq. feet house w/ 2 car garage, and I'm single. The yard work gets taken care of. I just call in if there's a problem (none yet). Brand new appliances were here at my arrival.

And I'm debt free....

What is it psychologically that makes people want to "own" a house, especially in this economy where many jobs are unstable?

I haven't been able to find someone to explain why it's better to own a house rather than rent. Yes, I know that you are throwing your monthly payments away, but there's also the other side to the coin. Huge down payments, maintenance costs (will always be more than your expectations unless the house is new). Plus upkeep. Not trying to say don't buy a house, but I'm just wondering if you considered renting.
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nlimbaugh
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Re: Mortgages are a pain in the ar*e! Way ot

Post by nlimbaugh » Mon May 21, 2012 3:49 am

Take all of mum's money you possibly can. Get a thirty year fixed for the dirt cheap rate you deserve... don't settle for less. Pay it like a 15 year mortgage. Do whatever you can to get 20% of the house paid for so you don't have to pay PMI in you monthly payment (private mortgage insurance). I don't know if they have it there, but it's another jab to the ribs. It's basically a high interest loan on top of your "loan" that covers the remainder of the 20% you haven't paid yet. At least that's the standard (as I know it) here in the US. Don't forget to add in property taxes, insurance, flood insurance (if applicable) and any other yearly fees in your mortgage. There's a lot more than the base mortgage you'll be paying every month. I'm sure you know this, but I had my mortgage jack up from about $700 to $900 a year because of changes in fees, etc. On top of that, filling my heating oil tank went from $300 to $900 in one season. Not to mention the lifespan of the roof... they aren't cheap and they don't last forever. I have learned all of these things the hard way.... hopefully you won't have to.

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