Good Deal?

[stcolin]

Hi all,

My partner and I are first time buyers. Budget of £110k, seen a few nice 2 bedroom apartments we like, new builds. Going with Ulster Bank under the momentum scheme, saving us a deposit. Just consolidated our existing debts to help aid getting a mortgage. We needed a particular figure 'free' after this new loan and the mortgage itself.

Good way to go?

Seems like there is a lot of info on here

Cheers

Colin

[getdoon_weebobby]

Hi all,

My partner and I are first time buyers. Budget of £110k, seen a few nice 2 bedroom apartments we like, new builds. Going with Ulster Bank under the momentum scheme, saving us a deposit. Just consolidated our existing debts to help aid getting a mortgage. We needed a particular figure 'free' after this new loan and the mortgage itself.

Good way to go?

Seems like there is a lot of info on here

Cheers

Colin

http://www.ulsterbank.ie/ni/personal/borro...evelopment.ashx

Here's what to expect:

* No deposit needed from you - the developer pays your 5% deposit.

* Peace of mind - you'll only pay your deposit back if the property value grows by 5% or more after five years.

* Protection against falling house prices – we'll reduce your mortgage by up to 10% of the original property value if your property value has fallen after 5 years.

* Choice – competitive fixed and discounted mortgages up to 95% of the property value.

* Flexibility – choose a term that suits you up to 40 years*.

* Free Valuation

* Extra value – No higher lending charge (normally charged for any mortgage over 90% Loan to Value).

[stcolin]

Thanks.

We got a bit of a stale reception when we went to see the bank. We've sorted our finances now, so we're in a better position now.

Colin

[Belfast Boy]

... saving us a deposit. Just consolidated our existing debts to help aid getting a mortgage.

... are you familiar with the term subprime lending? Any mortgage more than 2.5 times your joint income, longer than 25 years and more than 90% Loan to Value (i.e. 10% deposit) is considered subprime.

... are you familiar with the term negative equity? You will need to understand it in few year when you want to move to a bigger place, but can't.

Apartments (they are just flats) are going to see the biggest price fall during the house price crash (prices still have along way to fall IMO). Apartments are the area that had the most speculation that drove prices well above fundamentals. Therefore, they will fall more than any other property types.

Renting is not dead money if house prices are dropping more than your rent i.e. £6,000 for a years rent... the property you want to buy drops by £10,000 in that year. £10,000 less mortgage to pay for 25 years. Renting is win-win in a falling housing market.

[stcolin]

Yes, I understand all of that.

But we can't sit around waiting for prices to fall. There is no guarantee they will continue to fall, and if so, how far.

All my friends are faced with negative equity how bought in the last 5 years. And i'm pretty sure they aren't the only people.

[sophia]

Hi Colin and welcome to the forum

Where are the apartments located and at what price? I don't mean to be nosey, just trying to get a current market value so we can go from there!

thanks,

Sophia

[subby]

I think that only a penthouse flat is worth anything over 100k. Most 2 bed flats should be 60-70k max imo

110k for a flat is expenseive

...but welcome to the boards

[Belfast Boy]

Yes, I understand all of that.

But we can't sit around waiting for prices to fall. There is no guarantee they will continue to fall, and if so, how far.

Why not? You will likely save yourself a packet if you simply, "sit around waiting for prices to fall." I have potentially saved £180,000 on a house I wanted to buy in 2007 just by sitting around waiting for 2 years for prices to fall. In fact it was well worth me sitting around waiting for prices to fall.

I think history shows that prices are guaranteed to fall further. Have you looked at any previous house price crashes? Prices typically fall for 3-7 years ( we have only seen prices fall for 2 years after one of the biggest bubbles in history). Prices usually fall to hit fundamentals and stay there for several years before the next bubble slowly forms.

You may be worried about house prices rising again, but I am not. History tells me I have nothing to worry about. History tells me it will be well worth my while waiting around for prices to fall

[stcolin]

Hi guys, we're looking at two places, Redwoods apartment in Dunmurry, 1 bedroom at £110k which we've viewed, it's 500sq ft and then a 2 bedroom apartment at the Brokerstown Eco Village, Woodbrook, £109950, 700sq ft. That wont be completed until Early 2010.

We have seen some very nice places to rent between £500-600 p/m.

[getdoon_weebobby]

Hi guys, we're looking at two places, Redwoods apartment in Dunmurry, 1 bedroom at £110k which we've viewed, it's 500sq ft and then a 2 bedroom apartment at the Brokerstown Eco Village, Woodbrook, £109950, 700sq ft. That wont be completed until Early 2010.

We have seen some very nice places to rent between £500-600 p/m.

rent dont buy

110k will prob get u a 3 bed semi in 2 years

[Belfast Boy]

We have seen some very nice places to rent between £500-600 p/m.

Now that is a really, really good idea. Many of the posters here are renting while house prices are falling, and saving themselves a wee fortune.

I'm not even considering buying a house until Sept/Oct 2010. Despite the fact that I am a poor homeless cash buyer.

[talksalot81]

Unfortunately this isn't really the place to get the answer you seem pretty set upon getting. The majority here will say that you should wait. The minority will probably say that buying is ok if you are comfortably off and have no problem affording the repayments and any potential fall. However, guessing by the fact that you are going in for this scheme, you do not have bags of cash and do not expect soon to have them. As much as I hate to chase people away.... but it seems that you have already made up your mind and that you just want someone to make you feel justified about it. MSE is the place for that....

[sophia]

Hi guys, we're looking at two places, Redwoods apartment in Dunmurry, 1 bedroom at £110k which we've viewed, it's 500sq ft and then a 2 bedroom apartment at the Brokerstown Eco Village, Woodbrook, £109950, 700sq ft. That wont be completed until Early 2010.

We have seen some very nice places to rent between £500-600 p/m.

Hi Colin,

thanks for providing more information. If I were in your position I would rent for even 1 year and then look at the market around winter next year. Take advantage of your FTB situation, you do not have a house to try and sell in a falling market, you are in a great situation to just rent and wait!!!

[FrustratedFTB]

rent dont buy

110k will prob get u a 3 bed semi in 2 years

I actually believe they will be down to that long before then.

I know of one semi (1050sq ft) with a decent garden/location in good nic going (well sale agreed!) for 125k in the lisburn area recently.

Look at these all sitting below 130k.

http://www.propertynews.com/results.php?rt...=1&Location=

And the number in the range above of 130k to 160k. I think it won't be long before many of these are brought down to under 130k.

http://www.propertynews.com/results.php?rt=list&Bedrooms=&ReceptionRooms=&Type%5B%5D=Detached+Bungalow&Type%5B%5D=Detached&Type%5B%5D=Semi-Detached+Bungalow&Type%

5B%5D=Semi-Detached&MinPrice=130000&MaxPrice=160000&Keywords=&ForSale=on&s=73471105&refine=1&Location://http://www.propertynews.com/results...=1&Location=

I would if you are desperate look at maybe houses that are priced slightly above your budget but make a low, offer no harm in trying!

[stcolin]

talksalot81 - Interesting view you've taken, you must have those money growing trees I've heard about?

Belfastboy - I'm pretty sure you're aware that the price crash was extreme; this happens, what, every 10/15 years? You can hardly expect that property to fall by the same margin in the future, and anything it drops by would have possibly been offset by renting rather than saving that cash for a deposit?

Anyway, the mortgage we looked at is around £500 a month, repayment, and renting a place of the same specification would be around the same. Advantage of spending an extra few quid? I have my own home and I'm not lining someone elses pockets.

Don't get me wrong, renting works well for some, but just doesn't seem like the best option for us at the moment in time.

Colin

Edited August 13, 2009 by stcolin

[gordyjuly23]

Hi Colin,

I think I'm in a similar boat to yourself in some respects. I feel an urge to buy now to establish roots and build a "home".

Mortgages that I've been looking at for properties range from £300-£500 a month which I feel I can afford at the present however even I can see that interest rates will not stay at this level forever. They could hit 10% or 15% will that £500 a month be the same then? Nope, its going to be close to £1000 if not more off the top of my head.

Now add in inflation and some people believe we may hit hyper inflation before this financial mess is sorted out, if it is ever sorted out. Household goods and energy costs will also rise.

What about your own job security? Or your partners and others have mentioned - children are a cash black hole.

I feel comfortable to wait and am slowly thinking that renting isn't the dead money I always thought it was. Im terrible at budgeting though am slowly building a deposit. Rather than aim for the 10% deposit im going to aim for 20%

Dont discout renting so readily

Best of luck

[SPADER]

Hi Colin,

I think I'm in a similar boat to yourself in some respects. I feel an urge to buy now to establish roots and build a "home".

Mortgages that I've been looking at for properties range from £300-£500 a month which I feel I can afford at the present however even I can see that interest rates will not stay at this level forever. They could hit 10% or 15% will that £500 a month be the same then? Nope, its going to be close to £1000 if not more off the top of my head.

Now add in inflation and some people believe we may hit hyper inflation before this financial mess is sorted out, if it is ever sorted out. Household goods and energy costs will also rise.

What about your own job security? Or your partners and others have mentioned - children are a cash black hole.

I feel comfortable to wait and am slowly thinking that renting isn't the dead money I always thought it was. Im terrible at budgeting though am slowly building a deposit. Rather than aim for the 10% deposit im going to aim for 20%

Dont discout renting so readily

Best of luck

Colin

By even considering purchasing now, you and those like you are defeating the objective of the majority on this site - ie convince as many people as possible that they are insane to even think of buying so that prices will be forced down to a level where they can get a bargain for themselves. Don't expect anyone to recommend that you buy now, far too many vested interests!

[getdoon_weebobby]

Hi Colin,

I think I'm in a similar boat to yourself in some respects. I feel an urge to buy now to establish roots and build a "home".

Mortgages that I've been looking at for properties range from £300-£500 a month which I feel I can afford at the present however even I can see that interest rates will not stay at this level forever. They could hit 10% or 15% will that £500 a month be the same then? Nope, its going to be close to £1000 if not more off the top of my head.

Now add in inflation and some people believe we may hit hyper inflation before this financial mess is sorted out, if it is ever sorted out. Household goods and energy costs will also rise.

What about your own job security? Or your partners and others have mentioned - children are a cash black hole.

I feel comfortable to wait and am slowly thinking that renting isn't the dead money I always thought it was. Im terrible at budgeting though am slowly building a deposit. Rather than aim for the 10% deposit im going to aim for 20%

Dont discout renting so readily

Best of luck

good post. please dont buy based on current mortgage rates.

im fortunate enough to be able to buy , but why should i when the economic outlook is so uncertain. why should i let a developer or someone else off the hook by buying there overpriced asset from them.

renting is a 6 month contract, a property is signing up for 25+ years

[Belfast Boy]

Colin

By even considering purchasing now, you and those like you are defeating the objective of the majority on this site - ie convince as many people as possible that they are insane to even think of buying so that prices will be forced down to a level where they can get a bargain for themselves. Don't expect anyone to recommend that you buy now, far too many vested interests!

... this is housepricecrash.co.uk. What do people expect?

You honestly think that this website has that amount of power... cool

It's seems that Colin would rather line the pockets of the real vested interests than listen to us.

I really don't care if Colin buys a property or not. He is a big boy. He can make up his own mind to get himself and his partner into massive debt. The crash will continue without him. The crash will continue without me too.

The future holds increased borrowing costs, increased taxation, increased living costs and increased unemployment. Nothing will stop house prices hitting fundamentals.

Having said all that... I have been saying for years don't buy before Autumn 2010. So come back next year and Belfast Boy may actually be discussing "Is now a good time to buy a house."

Edited August 13, 2009 by Belfast Boy

[Belfast Boy]

MSE is where you get advice you want to hear.

This is where you get better advice you don't want to hear

[redprince]

... this is housepricecrash.co.uk. What do people expect?

You honestly think that this website has that amount of power... cool

It's seems that Colin would rather line the pockets of the real vested interests than listen to us.

I really don't care if Colin buys a property or not. He is a big boy. He can make up his own mind to get himself and his partner into massive debt. The crash will continue without him. The crash will continue without me too.

The future holds increased borrowing costs, increased taxation, increased living costs and increased unemployment. Nothing will stop house prices hitting fundamentals.

Having said all that... I have been saying for years don't buy before Autumn 2010. So come back next year and Belfast Boy may actually be discussing "Is now a good time to buy a house."

Guys- while i was sorting out my rented accommodation i spoke to several EA`s.One young lad told me bluntly to rent as property was going one way for the foreseeable and he could see no case for any kind of "recovery" in next 2-5 years.Refreshing honesty from an EA!!!No one can guess the bottom from here. Banks balance sheets will continue to deteriorate for some years to come.Unemployment will rise substantially from here as public sector comes into reality mode.Lot of money is going to be sucked out of the economy as the UK ponzi scheme collapses.What way do you think house prices will go?

[stcolin]

Belfastboy, I don't know you from Adam, but it almost seems like you've brain washed yourself into thinking that mortgages as a whole are bad thing. I knew the purpose of this website, but I don't expect everyone on here to be renting and totally against mortgaging a property.

You think people in the 90's all speculated that the base rate would be as low as it is now? Sure it has been there before, but we don't live forever.

On the affordability front, this mortgage is based on me being fulltime (8 years permanent) and my partner being part time (6 years permanent). So, we will improve our income at some stage. Wether or not are jobs are secure, well, I think's a bigger guess than the right time for buying a house.

Renting will rise too, non? Developers/Investors will also feel the rise if and when it happens, so renting isn't over board.

[Belfast Boy]

I feel comfortable to wait and am slowly thinking that renting isn't the dead money I always thought it was.

Excellent post.

Renting is not dead money in a falling market. Renting is the best way to avoid taking on excessive debt in a falling market.

Unfortunately, most people can't see that. They believe the spin form the vested interests. They cannot think for themselves. It is sad that so many people are conditioned to believe that renting is dead money.

[redprince]

Belfastboy, I don't know you from Adam, but it almost seems like you've brain washed yourself into thinking that mortgages as a whole are bad thing. I knew the purpose of this website, but I don't expect everyone on here to be renting and totally against mortgaging a property.

You think people in the 90's all speculated that the base rate would be as low as it is now? Sure it has been there before, but we don't live forever.

On the affordability front, this mortgage is based on me being fulltime (8 years permanent) and my partner being part time (6 years permanent). So, we will improve our income at some stage. Wether or not are jobs are secure, well, I think's a bigger guess than the right time for buying a house.

Renting will rise too, non? Developers/Investors will also feel the rise if and when it happens, so renting isn't over board.

stcolin-taking on a mortgage is fine provided that:

1.you can afford it now and you can afford it in medium term wrt anticipated r increases (v. likely to go up considerably from current levels)

2.you aren`t buying something today which you can buy cheaper tomorrow (over and above what you spend on rent)

How many people chased the ownership "security" bs of buying in last 4 years only to see they are in serious -ve equity and in many cases dire financial straits today?

[stcolin]

I don't believe renting is dead money. I understand why people do think that. I think some moral/personal issues lie with renting. It would never feel like my own place, wether or not I planned to live there all my life or for 5 years.

It's very much horses for courses, and the renting door is still open for us.