Jump to content
House Price Crash Forum
Sign in to follow this  
mbga9pgf

Treat The Banks Like The Little B*tch They Are...

Recommended Posts

Right, bear with me... I had a BRILLIANT Brainwave this morning and bearing in mind this site has saved me nigh-on 100K in interest payments and capital costs on home purchase, I thought I would share it with you....

Situation: I want one of these mortgages:

http://www.britannia.co.uk/home/mortgage/f...year/index.html

Less than 60% Loan to Value:

4.89% Fixed for ten years, followed by our Standard Variable Rate, currently 4.99% variable for the rest of the mortgage. The overall cost for comparison is 5.2%APR.

60% to 75% Loan to Value:

5.39% Fixed for ten years, followed by our Standard Variable Rate, currently 4.99% variable for the rest of the mortgage. The overall cost for comparison is 5.5%APR.

To purchase a house worth 250K. I currently have 57K in savings at the end of this month guaranteed, and am adding to that by around 3K per month.

25% deposit: 62.5K.

40% deposit: 100K.

At current savings rates, that means I will hit the 25% deposit at the beginning of April. But I am greedy you see, and I dont want to pay the banks the extra 40K over the term that I would have to if I bought in April. So I am going to continue saving. To get to 40%, I would need to save another 14 1/3 months, or beginning of May next year.

Problem is, I am not that sure that price drops will be continue to drop significantly till then, especially if gordons reinflation starts to kick in. I dont want to be holding onto cash at that stage if it does. Which puts me in a quandry. Because I reckon it is going to get as bad as it will get next January.feb yet, I wont have a big enough deposit to go for the 40%. So, this is what I am going to do.

Slap it on the plastic. All of it. food, petrol, car servicing, clothes, the lot. I currently have a 15.9% apr card with a 3K limit, which, over 15 months of spending on average 600 quid a month for EVERYTHING on this card. I currently pay it off, which is denting my deposit. I extend my cc limit to 8K. Interest payments over the 12 months are another 700 quid on an accrual basis with min payments. But thats a damn sight cheaper than just missing out on the 40% deposit and higher interest rates.

But hang on, I dont want to pay the 700 quid interest, so I will balance transfer it in June to a 0% card and pay off the 7K balance between feb and April after I have purchased the home.

So, I get to buy the house in feb, which I reckon is the optimum time and I get the credit card company to help with my deposit, meaning I dont have to pay the extra APR on a 10 year fix(4.89% vs 5.39, hoping they will come down further this year greedy me!!!). Its 10K interest ALONE between a 39% and 40% deposit, so the approximately 200 quid in CC interest I pay will be one of the best investments I have ever made!

Edited by mbga9pgf

Share this post


Link to post
Share on other sites

I've been offered a CC by my bank, again. Yes its 0% on balance transfers BUT they charge 3% of the balance to transfer it. That's a years interest in most savings banks, even at the puny rates there are now.

Share this post


Link to post
Share on other sites
Right, bear with me... I had a BRILLIANT Brainwave this morning and bearing in mind this site has saved me nigh-on 100K in interest payments and capital costs on home purchase, I thought I would share it with you....

Situation: I want one of these mortgages:

http://www.britannia.co.uk/home/mortgage/f...year/index.html

To purchase a house worth 250K. I currently have 57K in savings at the end of this month guaranteed, and am adding to that by around 3K per month.

25% deposit: 62.5K.

40% deposit: 100K.

At current savings rates, that means I will hit the 25% deposit at the beginning of April. But I am greedy you see, and I dont want to pay the banks the extra 40K over the term that I would have to if I bought in April. So I am going to continue saving. To get to 40%, I would need to save another 14 1/3 months, or beginning of May next year.

Problem is, I am not that sure that price drops will be continue to drop significantly till then, especially if gordons reinflation starts to kick in. I dont want to be holding onto cash at that stage if it does. Which puts me in a quandry. Because I reckon it is going to get as bad as it will get next January.feb yet, I wont have a big enough deposit to go for the 40%. So, this is what I am going to do.

Slap it on the plastic. All of it. food, petrol, car servicing, clothes, the lot. I currently have a 15.9% apr card with a 3K limit, which, over 15 months of spending on average 600 quid a month for EVERYTHING on this card. I currently pay it off, which is denting my deposit. I extend my cc limit to 8K. Interest payments over the 12 months are another 700 quid on an accrual basis with min payments. But thats a damn sight cheaper than just missing out on the 40% deposit and higher interest rates.

But hang on, I dont want to pay the 700 quid interest, so I will balance transfer it in June to a 0% card and pay off the 7K balance between feb and April after I have purchased the home.

So, I get to buy the house in feb, which I reckon is the optimum time and I get the credit card company to help with my deposit, meaning I dont have to pay the extra APR on a 10 year fix(4.89% vs 5.39, hoping they will come down further this year greedy me!!!). Its 10K interest ALONE between a 39% and 40% deposit, so the approximately 200 quid in CC interest I pay will be one of the best investments I have ever made!

This technique has been around for ages. At one point some guy on moneysavingexpert had 80 grand interest free which he kept transferring to 0% but he was using the money to over pay his mortgage.

Share this post


Link to post
Share on other sites
Right, bear with me... I had a BRILLIANT Brainwave this morning and bearing in mind this site has saved me nigh-on 100K in interest payments and capital costs on home purchase, I thought I would share it with you....

Situation: I want one of these mortgages:

http://www.britannia.co.uk/home/mortgage/f...year/index.html

To purchase a house worth 250K. I currently have 57K in savings at the end of this month guaranteed, and am adding to that by around 3K per month.

25% deposit: 62.5K.

40% deposit: 100K.

At current savings rates, that means I will hit the 25% deposit at the beginning of April. But I am greedy you see, and I dont want to pay the banks the extra 40K over the term that I would have to if I bought in April. So I am going to continue saving. To get to 40%, I would need to save another 14 1/3 months, or beginning of May next year.

Problem is, I am not that sure that price drops will be continue to drop significantly till then, especially if gordons reinflation starts to kick in. I dont want to be holding onto cash at that stage if it does. Which puts me in a quandry. Because I reckon it is going to get as bad as it will get next January.feb yet, I wont have a big enough deposit to go for the 40%. So, this is what I am going to do.

Slap it on the plastic. All of it. food, petrol, car servicing, clothes, the lot. I currently have a 15.9% apr card with a 3K limit, which, over 15 months of spending on average 600 quid a month for EVERYTHING on this card. I currently pay it off, which is denting my deposit. I extend my cc limit to 8K. Interest payments over the 12 months are another 700 quid on an accrual basis with min payments. But thats a damn sight cheaper than just missing out on the 40% deposit and higher interest rates.

But hang on, I dont want to pay the 700 quid interest, so I will balance transfer it in June to a 0% card and pay off the 7K balance between feb and April after I have purchased the home.

So, I get to buy the house in feb, which I reckon is the optimum time and I get the credit card company to help with my deposit, meaning I dont have to pay the extra APR on a 10 year fix(4.89% vs 5.39, hoping they will come down further this year greedy me!!!). Its 10K interest ALONE between a 39% and 40% deposit, so the approximately 200 quid in CC interest I pay will be one of the best investments I have ever made!

That's what the banks want. If you have a 40% deposite you are a lower risk borrower. Although they will get less interest from you, they can be confident of at least getting their money back if you default.

Share this post


Link to post
Share on other sites

Brittanias "Homesaver" savings account pays 4% if you save your deposit with them.

You have to use the money on one of their Home loans..

clicky brittania homesaver

i suppose if you save with them you prove that you can regularly save money which means you would be able to repay your mortgage. Which should help you get a mortgage easier with them.

Share this post


Link to post
Share on other sites
And having all that outstanding credit card debt that you're not paying off won't affect the mortgage deal they offer you? :unsure:

Only the total we want to borrow, which isnt an issue. Well below 3X single salary actually.

All they do is take off the debt you have outstanding from the multiple.

Looking at buying Feb 2010. anyone think this is too early?

Dont necessarily have to stooze either; happy to pay interest as 700 quid as opposed to 10000 in mortgage payments is a no-brainer.

Edited by mbga9pgf

Share this post


Link to post
Share on other sites
Right, bear with me... I had a BRILLIANT Brainwave this morning and bearing in mind this site has saved me nigh-on 100K in interest payments and capital costs on home purchase, I thought I would share it with you....

Situation: I want one of these mortgages:

http://www.britannia.co.uk/home/mortgage/f...year/index.html

To purchase a house worth 250K. I currently have 57K in savings at the end of this month guaranteed, and am adding to that by around 3K per month.

25% deposit: 62.5K.

40% deposit: 100K.

At current savings rates, that means I will hit the 25% deposit at the beginning of April. But I am greedy you see, and I dont want to pay the banks the extra 40K over the term that I would have to if I bought in April. So I am going to continue saving. To get to 40%, I would need to save another 14 1/3 months, or beginning of May next year.

Problem is, I am not that sure that price drops will be continue to drop significantly till then, especially if gordons reinflation starts to kick in. I dont want to be holding onto cash at that stage if it does. Which puts me in a quandry. Because I reckon it is going to get as bad as it will get next January.feb yet, I wont have a big enough deposit to go for the 40%. So, this is what I am going to do.

Slap it on the plastic. All of it. food, petrol, car servicing, clothes, the lot. I currently have a 15.9% apr card with a 3K limit, which, over 15 months of spending on average 600 quid a month for EVERYTHING on this card. I currently pay it off, which is denting my deposit. I extend my cc limit to 8K. Interest payments over the 12 months are another 700 quid on an accrual basis with min payments. But thats a damn sight cheaper than just missing out on the 40% deposit and higher interest rates.

But hang on, I dont want to pay the 700 quid interest, so I will balance transfer it in June to a 0% card and pay off the 7K balance between feb and April after I have purchased the home.

So, I get to buy the house in feb, which I reckon is the optimum time and I get the credit card company to help with my deposit, meaning I dont have to pay the extra APR on a 10 year fix(4.89% vs 5.39, hoping they will come down further this year greedy me!!!). Its 10K interest ALONE between a 39% and 40% deposit, so the approximately 200 quid in CC interest I pay will be one of the best investments I have ever made!

Why would you try and pay quarter of a million pounds for a house in the biggest housing crash in history? gordon is not stupid, he knows house prices falling are the only way that mortgage lending will resume, that is why there will now be a push to get all the toxic stuff accounted for, and to get lending going again at 2.5 times joint salary, then he can say "we got the banks lending again" Gordon doesn`t care about "Homeowners", he cares only about being seen to do the right thing whatever the conditions, and getting elected. He knows "homeowners" alone are not going to win him an election. See the wes Craven movie "Shocker", when the two characters go inside the TV and fight each other through various backdrops on various channels! See this as Cameron and Brown. Brown sees himself as a big chameleon who can duck and dive and survive IMO.

Share this post


Link to post
Share on other sites
Looking at buying Feb 2010. anyone think this is too early?

Dont necessarily have to stooze either; happy to pay interest as 700 quid as opposed to 10000 in mortgage payments is a no-brainer.

Personally I think the mistake you're making is assuming that the mortgage market will stay exactly the same over the next year. What if they revise the criteria further and you now need a 50% LTV to get the best deal? Or house prices fall even faster and your deposit becomes big enough without messing around with credit cards.

Share this post


Link to post
Share on other sites
Personally I think the mistake you're making is assuming that the mortgage market will stay exactly the same over the next year. What if they revise the criteria further and you now need a 50% LTV to get the best deal? Or house prices fall even faster and your deposit becomes big enough without messing around with credit cards.

In that case I will be fine and can buy; however, I want to buy as close to the 250K stamp duty threshold whilst prices are at their lowest; the type of property is what is changing not the size of the mortgage. Call me a mentalist, but Ican imagine an increase in stamp duty thresholds again this budget. Dont know what to, but I reckon 250K will be around the mark.

Bearing in mind I am saving 3K and paying 450 in rent a month, a 1200 quid mortgage is small fry, especially if I get the 40% deposit on a 10 year fix.

if 40% turns into 50%, will have to get the equivalent of the 25% fix...

What worries me is if britannia start to get fearful of inflation and realise they will be paying for me to live in my house in 5 years time... :lol::lol::lol:

I've been offered a CC by my bank, again. Yes its 0% on balance transfers BUT they charge 3% of the balance to transfer it. That's a years interest in most savings banks, even at the puny rates there are now.

but if I manage to get a 40% deposit over a 25% deposit, I will save 10K over the term of the mortgage! Thats the whole point! So what if I lose the 3%, at the end of the day, I wont be getting charged 15.9% apr over the year on the debt. which is quite a saving.

Edited by mbga9pgf

Share this post


Link to post
Share on other sites
In that case I will be fine and can buy; however, I want to buy as close to the 250K stamp duty threshold whilst prices are at their lowest; the type of property is what is changing not the size of the mortgage. Call me a mentalist, but Ican imagine an increase in stamp duty thresholds again this budget. Dont know what to, but I reckon 250K will be around the mark.

If they increase the stamp duty thresholds then £250k won't be such a price pressure point so there won't be any reason to focus on getting as much as you can for £250k.

Share this post


Link to post
Share on other sites
40% deposit: 100K. on a 250K house But when the house drops by 15% next year. 40% deposit: 85K

Good point, deposits may have reached their peak at around 40%, so now start to reduce inline with house prices.

Previously some of the same deals were 20% deposit needed, and the move to 40% raised the cash needed up front.

Share this post


Link to post
Share on other sites
Good point, deposits may have reached their peak at around 40%, so now start to reduce inline with house prices.

Previously some of the same deals were 20% deposit needed, and the move to 40% raised the cash needed up front.

As I have said though I am buying off property achievable, not price achievable. IE the best Goddamn MotherF*cking home I can get for 250K at the base of the market!!! :lol::lol::lol:

Take your point though, inner city newbuild flats are looking a lot more attractive than they did in 2005!! :P

Share this post


Link to post
Share on other sites

I was walking an old country route through the local hills with my dog this morning when I saw a man in a suit stood laughing at the top of a sharp cliff-edged hill pushing some kind of huge rock off the edge onto the sloping fields that led a steep decline into the valley. After rolling a few times through the first field another man ran out from nearby bushes looking a bit excitable and ran directly infront of said rock (which was now beginning to gain some considerable momentum), where he began to scream profanities and jump around angrily.

Oddly enough my dog started humping some other stray dog (I really hate it when that happens) and I had to look away at that very moment so I could leash him.

I never did see what happened to that guy...

Share this post


Link to post
Share on other sites
But hang on, I dont want to pay the 700 quid interest, so I will balance transfer it in June to a 0% card and pay off the 7K balance between feb and April after I have purchased the home.

So, I get to buy the house in feb, which I reckon is the optimum time and I get the credit card company to help with my deposit, meaning I dont have to pay the extra APR on a 10 year fix(4.89% vs 5.39, hoping they will come down further this year greedy me!!!). Its 10K interest ALONE between a 39% and 40% deposit, so the approximately 200 quid in CC interest I pay will be one of the best investments I have ever made!

Only thing is that have you noticed how these 0% balance transfers for 9 months now come with a 3% transaction fee. Its not a 0% balance t/f at all. That means that the real rate of interest is actually 4% a year. BTW I think you are crazy to be this planned about it. Track it and wait till it has turned up a bit. You won't have to beat the rush because for the first 3 years following a situation like this people will have learned to be wary. I reckon it is going to be around 2 years anyway. I very much doubt that Gordon's reinflation will make swot all difference other than to manage the pace at which the drop occurs, which is good for those who are planning their way out of it, but just extends the pain really.

Share this post


Link to post
Share on other sites
I was walking an old country route through the local hills with my dog this morning when I saw a man in a suit stood laughing at the top of a sharp cliff-edged hill pushing some kind of huge rock off the edge onto the sloping fields that led a steep decline into the valley. After rolling a few times through the first field another man ran out from nearby bushes looking a bit excitable and ran directly infront of said rock (which was now beginning to gain some considerable momentum), where he began to scream profanities and jump around angrily.

Oddly enough my dog started humping some other stray dog (I really hate it when that happens) and I had to look away at that very moment so I could leash him.

I never did see what happened to that guy...

:lol::lol::lol:

Brilliant

Share this post


Link to post
Share on other sites
As I have said though I am buying off property achievable, not price achievable. IE the best Goddamn MotherF*cking home I can get for 250K at the base of the market!!! :lol::lol::lol:

Why do you think Feb 2010 will be the bottom?

Personally I think the falls in residential property prices will be greater in 2010 than 2009...

Share this post


Link to post
Share on other sites

I see the problem with this being that by the time you are ready to buy 10 year fixes will be a lot more expensive as the banks currently offering 10 year fixes will realise that higher inflation is on the cards. sorry.

Share this post


Link to post
Share on other sites

the only problem with your ingenius plan is that if things don't occur as you expect and prices don't bottom in feb 2010 or you are not ready with a large enough deposit then, you will have been waisting money on cc interest that could have been saved towards your deposit.

Why not get cc's and use them a little, increase the limits on them and then just spank them empty at the time of purchasing when you actually need the money thus saving all those months of cc interest in the mean time?

Won't the lender take off the cc borrowings from what they will lend you? The first time I got a mortgage with abbey national I was still paying a car on hp, was about £280 a month and I only had 4 payments left from the 5 year term. Abbey knocked that £280 a month off what they would lend even though I only had 4 more payments to make. I settled the car early to satisfy abbey but I think this is standard when it comes to any debts or outgoings.

Share this post


Link to post
Share on other sites
Won't the lender take off the cc borrowings from what they will lend you? The first time I got a mortgage with abbey national I was still paying a car on hp, was about £280 a month and I only had 4 payments left from the 5 year term. Abbey knocked that £280 a month off what they would lend even though I only had 4 more payments to make. I settled the car early to satisfy abbey but I think this is standard when it comes to any debts or outgoings.

In the more normal lending times we are returning to, yes this is standard. When I got my first mortgage they interviewed me and I had to show them my entire household budget, how much for food, how much for the gas bill, etc. Even how much for travel to work costs. This was with a building society, was less than 20 years ago.

Edited by ader

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.