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Odakyu-sen

Mortgage 3x Rent

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Check this out (New Zealand Herald) 11/11/05

http://www.nzherald.co.nz/section/story.cf...jectID=10354684

"100pc mortgage helps couple realise dream"

11.11.05

By Errol Kiong

Cindy and Rashaad Vahed would have left New Zealand if they had failed to buy their own home.

The 26-year-old professionals were struggling to scrape a deposit together, and their homeowning dream looked bleak. They even contemplated returning to South Africa.

That was until late July, when they succeeded in getting a 100 per cent home loan of $305,000 to buy a terraced townhouse in Albany. But Mrs Vahed said it was initially a struggle convincing the banks that they could service the debt. The credit control officer and her husband are now paying $2700 a month on their mortgage - three times more than they would have paid in rent - but say their first step into home ownership has been well worth it.

It would have been very difficult for them to scrape together a deposit while paying rent, said Mrs Vahed - and she knows of other couples in a similar situation. She has even referred one friend to her mortgage broker. The first month of mortgage repayments proved difficult since they got married then as well, but they are now coping "comfortably" with repayments. Mrs Vahed said putting a limit on loan-to-value ratios for mortgages would shut the door on a lot of first-time buyers.

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Well, if they were renting for $2,700 / 4 weeks / 3 = $225 a week in their previous flat, then that was quite cheap rent for Auckland, I guess.

What strikes me as odd is the comment that "it would have been very difficult for them to scrape together a deposit while paying rent" Well, if they couldn't save while renting for $225 per week, how are they going to service a weekly mortgage outgoing that is three times larger?!

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Guest Charlie The Tramp
What strikes me as odd is the comment that "it would have been very difficult for them to scrape together a deposit while paying rent" Well, if they couldn't save while renting for $225 per week, how are they going to service a weekly mortgage outgoing that is three times larger?!

Well they don`t find out until they start the monthly repayments when reality raises it`s ugly head.

The dream then turns sour very quickly as many are finding in the UK.

It`s easy to borrow but harder to pay back.

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  • 302 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%



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