House deposits?

[Rossio]

assed?

[Squashed_Fly]

[quote author=Squashed_Fly

Oh, and just for the record, those pople that have had years of owning houses & having mortgages, probably don't understand, and can't relate the issues surrounding trying to save up £18,000+ in 5 years when they have bills, rent & families to think about, in a time when inflation & cost of living cmpared to salary, is at an all time high!

Camp Graeme writes:

No one is saying it's easy as a first time buyer in the current climate, I have four kids finding that one out. But it can be quite easy to find statistics to back up personal opinions especially if only considering a narrow range of historical evidence. Those of us who have been through the house buying experience all have our own real life experiences to remind us how hard it was for us to. Take for example, when looking at your statistical evidence why not include interest rates into the equation? To give you somewhere to look at, try 1980 and 1990 - just take a look at the Bank of England base rates. Then maybe consider what it might have been like for first time buyers then. You need to put statistics into context to make a balanced comparison before you assume its harder now than it was back then.

Has there ever been a time when it's been cheaper to borrow money than it is now?

You may also wish to check out the inflation figures since 1980 as well, as an example in 1990 it was around 7%. What is it today?


[/quote]

You make a good point there Graeme. Hopefully we can move this thread back to being one of good debate as (despite what may seem apparent), I am keen to hear from other peoples experiences.

You are right, in that once you actually get the money, it's much cheaper now to pay it back than it's ever been (or certainly for a long time!). And, in another year or 2's time, banks will likely go back to lending with lower (or possibly nil) deposits.

In terms of paying a mortgage, that's not a problem. We can afford the repayments, we pay rent already. The key part is that initial step to getting the funds. It's all well and good saying 'save save save', but if you are in situation (like millions) where you haven't, and now you want to start, the time it would take to save a 10% just makes it unrealistic. Plus once you have saved 10% of todays price, the house prices will have probably gone up by another 20-30k!

Who knows what the future will hold for lenders, borrowers and the economic climate? I'm guessing one way or another, it will have to be made easier, and more of these schemes will be available to help 1st time buyers, otherwise buying your first house will just be a pipe dream for the majority who haven't got that nest egg behind them. unless of course we see a big drop in house prices, will then make saving the 10% much more realistic... Time will tell I guess...

[Dabz]

In a great deal of Europe home owning isn't on the agenda, renting is the norm. It wouldn't hurt the uk to follow suit in my opinion

[DaytonaDog]

In a great deal of Europe home owning isn't on the agenda, renting is the norm. It wouldn't hurt the uk to follow suit in my opinion

I believe in France you can have 99 year mortgages which can be passed down through the family. Don't quote me on that though as I may have been misinformed.

[Beamer]

well that would beat this country hands down....older people are now expected to sell their homes to pay for their care when going into care homes !!!

[Col]

In a great deal of Europe home owning isn't on the agenda, renting is the norm. It wouldn't hurt the uk to follow suit in my opinion

See renting baffles me totally. OK there are all sorts of arrangements and situations but when you see rents £800 / month or more then in comparison mortgage payments are not much different.

A 25 yr £165k loan @5% = £965/month

Snowy wrote 'Has there ever been a time when it's been cheaper to borrow money than it is now?'-- well I think it has been ,especially the years before these bank collapses--I don't think the 'tracker mortgages' are as good as they used to be and with Base Rate 0.5% there are fewer products about because of this low base rate offering a great deal better than SVRs. The SVR of all? lenders has increased in the last 5 years. Plus interest rates applied to lending are not in line with this low base rate....lenders have not passed this on to their products/customers.

I made an interesting discovery not too long ago in that lenders are raising their SVRs even higher to around 4/4.5 %

With the current finance instability it is unlikely to get better

[Ducatista]

SF - have you started a pension yet?
I realise it's a little off topic, but it's really something you should look at whilst planning your finances especially if you haven't started and have lost 10 years.

[jonnydangerous]

whats a mortgage????......... ;-) is that one of those things that other people have... :-)

[Ducatista]

See renting baffles me totally

There are some pros to renting

1) If you move around a lot you save on the transactions costs (stamp duty, estate agents, legal fees etc.)
2) You don't have your capital tied up or at risk.
3) You don't have to pay for repairs, maintenance, decorating, building ins or perhaps even furniture.

The downside is that you don't get any benefit from geared gains on property.
What I mean by "geared" is that if you put £10K down on a £100K property then you get the gains on the whole £100K. That works both ways of course - down as well as up, but long term it's generally up.

One of the effective things about a repayment mortgage is that it's effectively enforced savings.
So after 25 years you have a house.
Potentially renters could save the money they would have otherwise spent on furniture, the garden etc. but people tend not to.

Pensions and repayment mortgage work really well for most people because they make you save which over the long term has a really big effect.

[Squashed_Fly]

In short, I haven't started a pension. When we met with Mike, he said you'd be better off just getting your mortgage underway and paying it off asap. By paying off extra chunks wherever possible, then saving for the remaining years, the money you put aside in those years, combined with what you can then unlock in your property, together with Jens teachers pension, would more than likely be worth more than any pension you started now (or once you have finished saving for your house deposit!).

Property will never go down in value in the long term, so your house will be worth more than what you paid, plus the odds are you won't want/need a house big enough for the home office and kids bedrooms thus downsizing will unlock lots of capital. Added to that, there is a lot of inheritence tied up with parents who are still quite young so when that time comes, that is aditional towards our own pension (not that I really want to think about that too much, but you have to be realistic)...