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46 Yr Old Colleague Uses Htb... Tries To Talk Me Into It

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I have a financially astute colleague, unfortunately got chatting to her yesterday.

She sold a 3 bed semi to buy a new build 1 bed flat in 2012. She has now sold the flat to buy a new build 3 bed semi (£250k). She was telling me she used HTB to knock 20% of the house price, and that she only had a 5% deposiit. She said it is much cheaper than renting.

So that breaks down as:

£50k gubberming loan

£12.5k deposit

£187.5k mortgage (on a £25k salary, trust me there's no hope of that increasing!)

I asked how she planned to pay off the £50k HTB loan... she had no idea. Just said she'd worry about that in 5 years when the interest kicks in.... believes she'll meet someone (she is 47, single) or win the lottery, or inherit some money).

I asked what happens when the mortgage is paid off (it ends when she hits 65) and the gubbermint asks for it's £50k back. She wasn't sure but said "it'll still be better than renting". That bit baffled me - being forced to sell the house will be better than renting? Um, ok!

Anyway, there you go.... something to cheer you up on a sunny morning.

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Indeed so astute that she hasn't made any equity stick by the age of 46.

Indeed, astute should have been enclosed in speech marks :)

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I have a financially astute colleague, unfortunately got chatting to her yesterday.

She sold a 3 bed semi to buy a new build 1 bed flat in 2012. She has now sold the flat to buy a new build 3 bed semi (£250k). She was telling me she used HTB to knock 20% of the house price, and that she only had a 5% deposiit. She said it is much cheaper than renting.

So that breaks down as:

£50k gubberming loan

£12.5k deposit

£187.5k mortgage (on a £25k salary, trust me there's no hope of that increasing!)

I asked how she planned to pay off the £50k HTB loan... she had no idea. Just said she'd worry about that in 5 years when the interest kicks in.... believes she'll meet someone (she is 47, single) or win the lottery, or inherit some money).

I asked what happens when the mortgage is paid off (it ends when she hits 65) and the gubbermint asks for it's £50k back. She wasn't sure but said "it'll still be better than renting". That bit baffled me - being forced to sell the house will be better than renting? Um, ok!

Anyway, there you go.... something to cheer you up on a sunny morning.

How on earth can she meet the payments? That's about £850 a month, assuming interest free.

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How on earth can she meet the payments? That's about £850 a month, assuming interest free.

£1276 on a 5% rate!!! Plus the HTB bit when that kicks in.

I have just asked her what her repayments are... she is not sure.

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I have a financially astute colleague, unfortunately got chatting to her yesterday.

She sold a 3 bed semi to buy a new build 1 bed flat in 2012. She has now sold the flat to buy a new build 3 bed semi (£250k). She was telling me she used HTB to knock 20% of the house price, and that she only had a 5% deposiit. She said it is much cheaper than renting.

So that breaks down as:

£50k gubberming loan

£12.5k deposit

£187.5k mortgage (on a £25k salary, trust me there's no hope of that increasing!)

I asked how she planned to pay off the £50k HTB loan... she had no idea. Just said she'd worry about that in 5 years when the interest kicks in.... believes she'll meet someone (she is 47, single) or win the lottery, or inherit some money).

I asked what happens when the mortgage is paid off (it ends when she hits 65) and the gubbermint asks for it's £50k back. She wasn't sure but said "it'll still be better than renting". That bit baffled me - being forced to sell the house will be better than renting? Um, ok!

Anyway, there you go.... something to cheer you up on a sunny morning.

The bit that baffles me is that she may well be right not to worry about the H2B repayment. Depressingly, I could see these loans being wiped out in certain circumstances (negative equity or other personal issues). Is any government going to take possession of a pensioners house, or potentially thousands of peoples homes and leave hard working people homeless. Just can't see it. The H2B repayment could easily be added as a charge on the property, payable on sale or death. I would like to be wrong.

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All the comments in this thread are right.

And they're all the comments I made to my friends and contemporaries who came up with similar arguments over the last fifteen years.

The only trouble is that, over the last fifteen years, all my feckless, mortgage-to-the-hilt, BTL-is-good, property-can-only-go-up friends have all been proved right, and - so far, at least - I've been wrong. :-(

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The bit that baffles me is that she may well be right not to worry about the H2B repayment. Depressingly, I could see these loans being wiped out in certain circumstances (negative equity or other personal issues). Is any government going to take possession of a pensioners house, or potentially thousands of peoples homes and leave hard working people homeless. Just can't see it. The H2B repayment could easily be added as a charge on the property, payable on sale or death. I would like to be wrong.

I will bet 5000 pound in hard cash that the government of the day will create a scheme to roll over the interest, extend the term, or 'forgive' for 'hard FCKING WORKING MUPPETS'.

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I have a financially astute colleague, unfortunately got chatting to her yesterday.

She sold a 3 bed semi to buy a new build 1 bed flat in 2012. She has now sold the flat to buy a new build 3 bed semi (£250k). She was telling me she used HTB to knock 20% of the house price, and that she only had a 5% deposiit. She said it is much cheaper than renting.

So that breaks down as:

£50k gubberming loan

£12.5k deposit

£187.5k mortgage (on a £25k salary, trust me there's no hope of that increasing!)

I asked how she planned to pay off the £50k HTB loan... she had no idea. Just said she'd worry about that in 5 years when the interest kicks in.... believes she'll meet someone (she is 47, single) or win the lottery, or inherit some money).

I asked what happens when the mortgage is paid off (it ends when she hits 65) and the gubbermint asks for it's £50k back. She wasn't sure but said "it'll still be better than renting". That bit baffled me - being forced to sell the house will be better than renting? Um, ok!

Anyway, there you go.... something to cheer you up on a sunny morning.

I thought the loan only had to be paid back when she sold the house?

Presumably the plan is that people like her only sell when they want to downsize. So selling a 3 bed to buy a smaller 1 or 2 bed means the governbankment get her surplus downsizing cash instead of her banking it?

Is it £50k she owes or 20% of the house value at the time it's sold?

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The bit that baffles me is that she may well be right not to worry about the H2B repayment. Depressingly, I could see these loans being wiped out in certain circumstances (negative equity or other personal issues). Is any government going to take possession of a pensioners house, or potentially thousands of peoples homes and leave hard working people homeless. Just can't see it. The H2B repayment could easily be added as a charge on the property, payable on sale or death. I would like to be wrong.

I suspect you are correct.

£50k could have built a house with cash to spare.

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Indeed so astute that she hasn't made any equity stick by the age of 46.

I consider myself very good with money. However when I lost my job I wasn't entitled to any benefits what so ever even having paid NI for 33 years. Not sure she isn't astute. looking after your finances these days doesn't seem to work in your favor these days.

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I consider myself very good with money. However when I lost my job I wasn't entitled to any benefits what so ever even having paid NI for 33 years. Not sure she isn't astute. looking after your finances these days doesn't seem to work in your favor these days.

A socialist state favours those who spend a lifetime suckling at it's teat.

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I will bet 5000 pound in hard cash that the government of the day will create a scheme to roll over the interest, extend the term, or 'forgive' for 'hard FCKING WORKING MUPPETS'.

haha Wherebee, am not a betting person, ever really, but I would mirror your bet with no reservations. Could be a safe savings vehicle too! :) Forgive - that's the word I was looking for. Bit like confession - all will be forgiven.

I suspect you are correct.

£50k could have built a house with cash to spare.

That is an incredibly good point. Wonder why Dave & co never thought of that.

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How on earth can she meet the payments? That's about £850 a month, assuming interest free.

Who pays five and a half percent in today's market?

Anyway, on a £25k headline income, she has over £20k after tax at today's rates, and over £10k after that interest. Plenty to live comfortably. Or live frugally and save most of that £10k.

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Who pays five and a half percent in today's market?

Anyway, on a £25k headline income, she has over £20k after tax at today's rates, and over £10k after that interest. Plenty to live comfortably. Or live frugally and save most of that £10k.

Alas she is not a frugal person... bought a brand new car last year, and took up smoking because it allowed her fag breaks at work.

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All the comments in this thread are right.

And they're all the comments I made to my friends and contemporaries who came up with similar arguments over the last fifteen years.

The only trouble is that, over the last fifteen years, all my feckless, mortgage-to-the-hilt, BTL-is-good, property-can-only-go-up friends have all been proved right, and - so far, at least - I've been wrong. :-(

My feelings exactly. In 2008 I remember thinking that I was finally being proved right, but I tried to keep the smugness to myself (didn't really succeed). However, from Spring 2009, normal service resumed (at least where I live in London), and everyone who loaded up on eye-watering amounts of debt made enormous tax-free gains that I could never hope to achieve via working.

I am sure it will unwind at some point, but not to the point where I wouldn't have been better off buying in '09, '10, 11 or even '12. We might see the 2013-2014 HTB gains being knocked-off, though.

Edited by WageslaveX14

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Simple. SHtBMI, or Support for Help to Buy Mortgage Interest which is just an extension of SMI. In other word the taxpayer will pay. Job done. Or she could just apply and join HtB 26.

No..We've gone way past 'the taxpayer' paying for stuff.

It's now the taxpayers' kids and g/kids!

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I think you need to revise this statement as the facts given doesn't support this.

I think your irony detector is broken ;)

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