Come In. The Waters Lovely

[spyguy]

My occasional wander into mumsnet for some light relief/will someone please slap her moments

http://www.mumsnet.com/Talk/property/1286671-could-I-get-a-600k-mortgage

"I have a bit of a nuts idea, I'd just like some advice about whether or not it could be done. We are looking to move house and have found a property on the market for £700,000 our current house is worth roughly £340k we'd make about £120k so we'd need a mortgage of £600k. We do not have a big income at all, I'm a sahm and dh is a teacher. The thing is the property we're looking at has a swimming pool which the current owners hire out to swim/dive schools apparently making £3000 a month. They also say that they often turn people down, so it could be possible to make even more income from the pool. This income could therefore cover the mortgage payments.

Do you think any bank would lend us the money to buy this house? Or am I being completely stupid?

Thanks for any opinions."

I feel sorry for Emily Pankhurst.

Still, she could set up a cupcake shop or maybe make bead jewelry.

[exiges]

If it wasn't for the fact that she'd undoubtedly be bailed out by tax payers I'd tell her to go for it.. Stupid is as stupid does

[ScrewsNutsandBolts]

"DIVER" LOANS

And she's a teacher FFS... I pity the children in her class

Edited August 25, 2011 by ScrewsNutsandBolts

[TheCountOfNowhere]

My occasional wander into mumsnet for some light relief/will someone please slap her moments

http://www.mumsnet.com/Talk/property/1286671-could-I-get-a-600k-mortgage

"I have a bit of a nuts idea, I'd just like some advice about whether or not it could be done. We are looking to move house and have found a property on the market for £700,000 our current house is worth roughly £340k we'd make about £120k so we'd need a mortgage of £600k. We do not have a big income at all, I'm a sahm and dh is a teacher. The thing is the property we're looking at has a swimming pool which the current owners hire out to swim/dive schools apparently making £3000 a month. They also say that they often turn people down, so it could be possible to make even more income from the pool. This income could therefore cover the mortgage payments.

Do you think any bank would lend us the money to buy this house? Or am I being completely stupid?

Thanks for any opinions."

I feel sorry for Emily Pankhurst.

Still, she could set up a cupcake shop or maybe make bead jewelry.

I see no one has mentioned how two people on low income jobs can afford a house worth £340K !!! That in itself ;points to house prices halving. £600k becomes £300K, even a teacher could work that one out.

[Snugglybear]

They don't have two low incomes.

The husband is a teacher, but without knowing what kind of job he has, it's difficult to say how much he earns.

However sahm stands for 'stay at home mum/mother'.

[Pytyr]

Most comments are pretty spot on - don't be stupid!

this one did make me laugh:

OMG a pool that can be used by a dive school in your home , wow !!!

She's gotta have it.

[Nationalist]

It's amazing what you can afford when the base rate is 0.5%.

Is anyone bothering to check they can still afford their mortgages at 5% anymore?

[Chest Rockwell]

3k a month from hiring out a pool? Surely insurance, maintenance, tax and the fricken water/electric/chemical bill would eat up a lot of that money?

Greedy b1tch!

[interestrateripoff]

No one's said they should take on a even bigger mortgage and build a second pool with a bar and hire it out for parties etc... It could all pay for itself. Even extend the house and run a small B&B.

Plus what happens if the dive school can no longer afford to hire the pool.

Why hasn't anyone located this house so we can see the size of the pool?

Edited August 25, 2011 by interestrateripoff

[singlemalt]

I reckon they could keep their heads above water.

[TheCountOfNowhere]

I reckon they could keep their heads above water.

It would definitively be a case of sink or swim.

[bajista]

[

Surely insurance, maintenance, tax and the fricken water/electric/chemical bill would eat up a lot of that money?

Especially the insurance......my risk radar alarm has gone into overdrive..

They don't say why the previous owners are selling but they have probably been being bankrupted by the legal fees.

However sahm stands for 'stay at home mum/mother'.

Thanks .. I was wondering what the **** that meant

[The Knimbies who say No]

What a bluddy stoopid idea.

[leicestersq]

It's amazing what you can afford when the base rate is 0.5%.

Is anyone bothering to check they can still afford their mortgages at 5% anymore?

Nationalist,

you are right, not a lot of this makes sense.

If she says they can make £120,000 out of their £340,000 home, then that means that they must have a £240,000 mortgage. Divide by 3, and that means she must be married to a teacher on £80,000 a year. Most people would consider that, if true, to be a massive salary. I doubt that is the true salary, what does the average teacher earn anyway?

And then renting a private pool out for 3 grand a month? Come on. And as someone said, it is the profit that you make out of it that counts. And from what I can recall, most swimming pools are not private. There would be lots of private pools around if you could make money out of them, but there arent, so you cant (other than water parks). I can only conclude that if the sellers really claimed this, it is because they are desperate for a buyer and want to sweeten the deal without adding any sugar.

And of course the real mugs in this game are the taxpayers. Why on earth are we paying teachers so much in the first place? And then we bail out the feckless banks who make loans to people like this because they know if the loans go wrong, they will get bailed out. And then we ensure that people who make decisions like this and when the inevitable finally happens, we get to put them up somewhere else at taxpayer expense.

I can see why she is thinking like this, it is the recent history of life in the UK without moral hazard.

[Killer Bunny]

And she's a teacher FFS... I pity the children in her class

NO, sir. Its: Ahhh, she's a teacher. Well that explains it.

[scottbeard]

If she says they can make £120,000 out of their £340,000 home, then that means that they must have a £240,000 mortgage. Divide by 3, and that means she must be married to a teacher on £80,000 a year. Most people would consider that, if true, to be a massive salary. I doubt that is the true salary, what does the average teacher earn anyway?

340 - 120 = 220, divide by 3 is 73k, but remember the crazy multiples around so you could divide by 4 = 55k

A Deputy Head could easily be on 55k (average teacher would be more like 30k)

Remember too that they could have taken out a smaller mortgage and MEWed.

[Killer Bunny]

They got the loan when she was working. He earns £45 I guess. It was 4x jt earnings.

[leicestersq]

340 - 120 = 220, divide by 3 is 73k, but remember the crazy multiples around so you could divide by 4 = 55k

A Deputy Head could easily be on 55k (average teacher would be more like 30k)

Remember too that they could have taken out a smaller mortgage and MEWed.

Scottbeard,

yes, maths error on my part, £220,000 should be the mortgage figure.

Her description of a 'low income', leads me to suspect that it is nearer 30k than 55k.

I take your point about MEW. Do the banks check income when they forward more money, or just how much equity you have in your property?

Even at a low rate of interest, unless the teacher is earning more than £40k a year, this family look to be struggling with the current mortgage.

[A.steve]

Thanks for any opinions.

I've a solution for this sahm, that would completely solve her dilemma - get her the house and pay for the upkeep of the swimming pool. It's delightfully straightforward and the strategy is as good as foolproof.

All that's required is a carefully baked batch of cup-cakes, and a trip to Libya... then feed a bad cup-cake to Gadhafi... and, while he's choking on the crumbs... claim the $1.7m reward. This currently equates to £1,037,914 - which is sufficient both to buy the new place (with swimming pool); to pay off the mortgage on the old house (which can be let out to cover pool cleaning costs) and plops £100K in the bank to pay for incidentals.

It's a no-brainer, go-go-cup-cake-baking-for-Gadhafi-capture!!!

[dothemaths]

The thing is the property we're looking at has a swimming pool which the current owners hire out to swim/dive schools apparently making £3000 a month. They also say that they often turn people down, so it could be possible to make even more income from the pool. This income could therefore cover the mortgage payments.

£3000 per month - that's really voodoo economics

[Snugglybear]

They also say that they often turn people down, so it could be possible to make even more income from the pool.

Has she considered that they turn people down because they already have a booking for that period?

Why else would they turn people down?

And how does that equate to making more income from the pool? Does she have a way of turning the pool into two pools by magic at busy times?

[rw42]

I'm having trouble imagining being willing to sell somewhere that's making me 3k a month :/

[lorna1999]

£3000 per month - that's really voodoo economics

Have read the thread. My thought was that the husband (and maybe wife) took the mortgage out a few years ago for normal multiples, but HPC has meant that their 150K house has increased in cost to 340k (or so they think).

What IS interesting about that thread is that all of the replies, bar maybe one or two, are saying she is a fool. Surely that is indicative of sentiment being strongly against speculation in the housing market etc etc. Out of the 80+ people who replied to the original poster, 97% say she is mad even to think about it. That is a pretty strong tide of opinion against overstretching yourself...

[leicestersq]

Have read the thread. My thought was that the husband (and maybe wife) took the mortgage out a few years ago for normal multiples, but HPC has meant that their 150K house has increased in cost to 340k (or so they think).

What IS interesting about that thread is that all of the replies, bar maybe one or two, are saying she is a fool. Surely that is indicative of sentiment being strongly against speculation in the housing market etc etc. Out of the 80+ people who replied to the original poster, 97% say she is mad even to think about it. That is a pretty strong tide of opinion against overstretching yourself...

97% might say on mumsnet not to do it. I reckon though, that if you put the respondents in the place of this lady, then 97% of them would try and do the same thing.

[Lord Lister]

My guess is the vendor hastily set up a dive school to help him sell the house lol £3k a month, they could buy a plot of land and build a pool, probably get a lottery grant to do it. All a bit fishy to me.