Poster On Hotukdeals Thinks 95% Htb Mortgages Are A Good Idea

[Bear Necessities]

At this stage I despair.

http://www.hotukdeals.com/deals/95-help-buy-mortgage-3-98-fixed-until-30-06-2017-zero-fees-post-office-2152573

Any HUKD members that could spread the word on there about why Help to Buy and 95% mortgages are evil?

All the usual "renting is dead money" and "property is only going up" cliches are coming out over there.

[wotnocrash]

I personally don't see the issue with high LTV mortgages, but only if they are not combined with a high income multiple. Likewise, I high multiple is probably ok at a low LTV. The problems occur with high LTV high multiple mortgages.

Buying a property in 2006 with a 100% mortgage, 3 times single income was the best financial decision of my life, I sold the house for twice what I paid for it last year, netting me a £250k profit.

[Bear Necessities]

We don't all live near/in London and we don't have a time machine.

[Executive Sadman]

I personally don't see the issue with high LTV mortgages, but only if they are not combined with a high income multiple. Likewise, I high multiple is probably ok at a low LTV. The problems occur with high LTV high multiple mortgages.

Buying a property in 2006 with a 100% mortgage, 3 times single income was the best financial decision of my life, I sold the house for twice what I paid for it last year, netting me a £250k profit.

Not a very good deal for the person who bought it off you, eh?!

You're 250k 'profit' (assuming you didnt plough it all back into housing that had risen at a similar amount in cost since 2006...ie saving you a big fat zero) is someone else's cost.

Maybe that cost will be socialized onto the taxpayer/saver if they default...regardless. Paying more for something than its cost of production is inefficient.

[wotnocrash]

Not a very good deal for the person who bought it off you, eh?!

You're 250k 'profit' (assuming you didnt plough it all back into housing that had risen at a similar amount in cost since 2006...ie saving you a big fat zero) is someone else's cost.

Maybe that cost will be socialized onto the taxpayer/saver if they default...regardless. Paying more for something than its cost of production is inefficient.

Whether I bought another property or not is irrelevant, I am still 250k better off than I would have been if I had carried on renting in 2006 (when I first joined this site!).

The point is, for some people (asset poor, income rich) high LTV make perfect sense

[Ultra Fox]

I personally don't see the issue with high LTV mortgages, but only if they are not combined with a high income multiple. Likewise, I high multiple is probably ok at a low LTV. The problems occur with high LTV high multiple mortgages.

Buying a property in 2006 with a 100% mortgage, 3 times single income was the best financial decision of my life, I sold the house for twice what I paid for it last year, netting me a £250k profit.

Its a risk. I bought in 2007 on a 100% mortgage in Yorkshire. (Yes I was a fool). 8 years on the property is worth 20k less than I paid. I'd love to sell it but there are not many buyers even at that price.

[Sandwiches33]

If I had bought in 2006 I would have been utterly ******ed, definately bankrupt. Iost my job 4 times and had to move all over the UK, the companies I worked for no longer exist. So for me renting was a win while my colleagues were ruined. Manysuffered terribly as families were wrenched apart as one parent would have to move to another part of the country to find work and the house wouldnt sell. These people lost time with there kids they will never get back.

This housing madness and it is causing catastrophic damage to some families i know, You win some lose some.

[Sandwiches33]

Sorry to continue..... I was cut short when I posted

so 250k is roughly 4 years salary for me, a lot yes but worth not seeing my kids for the first few years, living in a bedsit? dealing with family and job instability,(many families didnt make it).

I hear from many people my house made "X" amount ranging from tens to hundreds of thousands profit but you never ever hear about the blood and broken families. There is a price and it isnt even mentioned at all on tv. Mental illness, broken families ruined lives.

Everyone seems to be making a profit and noone is paying a price.

[canbuywontbuy]

The comments in this thread sum up the madness of the UK housing market: insane profits for the few, pain for the many, and absolutely zero productivity from an economic perspective. Net result: more pain than profit, zero productivity. And the kicker: we're meant to be docile cheerleaders of the few and celebrate their gains. Well, let me be the insolent one: wotnocrash, you are a negative drag on the UK economy no matter how you spin it. And worse: I know you don't care about that.

[wotnocrash]

The comments in this thread sum up the madness of the UK housing market: insane profits for the few, pain for the many, and absolutely zero productivity from an economic perspective. Net result: more pain than profit, zero productivity. And the kicker: we're meant to be docile cheerleaders of the few and celebrate their gains. Well, let me be the insolent one: wotnocrash, you are a negative drag on the UK economy no matter how you spin it. And worse: I know you don't care about that.

There is no overall drag on the economy from my profit, just a transfer of buying power from one person to another. Let's not forget the person who sold it to me made a big profit at my expense having bought for peanuts in the 70's.

There is no more or less money in the economy, it is just in different hands

[2buyornot2buy]

This is exactly like Northern Ireland.

[Hairy1305]

There is no overall drag on the economy from my profit, just a transfer of buying power from one person to another. Let's not forget the person who sold it to me made a big profit at my expense having bought for peanuts in the 70's.

There is no more or less money in the economy, it is just in different hands

That is simply not true.

[BLOW FLY]

I personally don't see the issue with high LTV mortgages, but only if they are not combined with a high income multiple. Likewise, I high multiple is probably ok at a low LTV. The problems occur with high LTV high multiple mortgages.

Buying a property in 2006 with a 100% mortgage, 3 times single income was the best financial decision of my life, I sold the house for twice what I paid for it last year, netting me a £250k profit.

Has Sibley returned?

[LiveinHope]

Whether I bought another property or not is irrelevant, I am still 250k better off than I would have been if I had carried on renting in 2006 (when I first joined this site!).

The point is, for some people (asset poor, income rich) high LTV make perfect sense

No

[LiveinHope]

Has Sibley returned?

There have been a hell 'uv a lot of long time lurkers, long time members with few posts, posting on / starting threads recently. Well, that's my perception. I almost thought that one or a few individuals might have established a load of accounts a few years back.

[InlikeFlynn]

I personally don't see the issue with high LTV mortgages, but only if they are not combined with a high income multiple. Likewise, I high multiple is probably ok at a low LTV. The problems occur with high LTV high multiple mortgages.

Buying a property in 2006 with a 100% mortgage, 3 times single income was the best financial decision of my life, I sold the house for twice what I paid for it last year, netting me a £250k profit.

An old friend bought in Edinburgh in early 2007 and sold last year. She lost the equivalent of 1.5 years gross salary in the transaction, even before transaction costs are considered. She bought with a high income multiple mortgage.......

I have no problem with high income multiple mortgages on very low LTV - if people want to risk their own money that's their business. I have a big issue with high LTV mortgages full stop. The bank (and by extension the taxpayer) pick up the tab if their circumstances change. 15% seems like a sensible minimum deposit to me.

[renting til I die]

There is no overall drag on the economy from my profit, just a transfer of buying power from one person to another. Let's not forget the person who sold it to me made a big profit at my expense having bought for peanuts in the 70's.

There is no more or less money in the economy, it is just in different hands

That is simply not true.

Hairy beat me in replying to this naive statement but I will expand a little.

All money is borrowed into existence, so just by the simple size of the amounts being borrowed increasing, facilitates an increase in money supply! So, higher house prices equalling higher borrowing means more money in the economy (without even accounting for the effect of QE! You lucky thing).

You were fortunate as if we didn't have ZIRP and various other government asset props it could have easily gone the other way! Can I ask, what you did or are planing to do with your new found wealth?

[wotnocrash]

You were fortunate as if we didn't have ZIRP and various other government asset props it could have easily gone the other way! Can I ask, what you did or are planing to do with your new found wealth?

It could have easily gone the other way (and for a while it looked like it might!) but I would still have had a place to live. At is turned out, ZIRP and a second household income after marrying meant that we had also paid off the mortgage before we sold it. We have since bought another much larger house, thankfully this time less than 40% LTV and 1.5 household income mortgage.

Clearly we won't make the same gains if any in the future, but I don't care as we now have a large family house with a reasonably sized mortgage, which would not have been possible if I hadn't taken that 100% mortgage in 2006.

High LTV can make sense at low income multiples as the the buyer can overpay, or shorten the term thus building up equity quickly, particularly with ZIRP.