35 year mortgages and petition to allow rent to be proof of ability to pay mortgage

[lkpflk1]

http://www.plymouthherald.co.uk/news/plymouth-news/totally-ordinary-plymouth-dad-could-473448

http://www.plymouthherald.co.uk/news/plymouth-news/first-time-buyers-plymouth-having-460321

[iamnumerate]

If you can pay £x rent per month you can not therefore pay £x mortgage each month because you might have a boiler break etc.  Saying that the expenses of owning a house are not that great but they do exist and vary a lot.

[TheCountOfNowhere]

Poor people really are stupid.

[spyguy]

9 minutes ago, iamnumerate said:

If you can pay £x rent per month you can not therefore pay £x mortgage each month because you might have a boiler break etc.  Saying that the expenses of owning a house are not that great but they do exist and vary a lot.

Less that, just put household income into MMR.

At the mo these people might be bale to afford a mortgage if they can borrow at ~1%.

Put 6% in and *poof* Computer says No.

 

[stuckmojo]

S&M level of idiocy here. ******ing hell. 

Why doesn't he also lease a Ferrari since he can pay the rent

 

[spyguy]

He's 27.

Claims to have paid ~90k in rent.

Assuming left home at 20 - 90/7 = ~12k/year in rent. In Plymouth!!

SOmeone that age should have been looking for a shared house at ~300/m. Plymouth is not expensive.

[iamnumerate]

4 minutes ago, spyguy said:

Less that, just put household income into MMR.

At the mo these people might be bale to afford a mortgage if they can borrow at ~1%.

Put 6% in and *poof* Computer says No.

 

Good point I was wrongly assuming constant interest rates.

[Longtermrenter]

I have paid approx 850 a month or equivalent for 20 years, never late, have savings in bank. Can't get decent mortgage rate as 1st time buyer. Self employed with money in business that o would take out if I had a mortgage but can't get a mortgage based on my income.

[Richmond]

11 hours ago, iamnumerate said:

Good point I was wrongly assuming constant interest rates.

Rookie error - everyone knows interest rates can go down as well as stay the same.

It appears rates are going no where for the foreseeable future so don't know why anyone really worries. May as well just lend the QE money....

[london_thirtythree]

4 hours ago, Longtermrenter said:

I have paid approx 850 a month or equivalent for 20 years, never late, have savings in bank. Can't get decent mortgage rate as 1st time buyer. Self employed with money in business that o would take out if I had a mortgage but can't get a mortgage based on my income.

Be interested to know more on your experience there.

I kind of had the opposite - I thought being self-employed for the last 5 years as a Contractor that I would face the same problem, but then once 2 years worth of Self Assessments were in front of them, had Nationwide trying to throw fairly extreme levels of debt at me.

I found it pretty weird as 2 years of Self Assessment doesn't really prove anything, could easily have 2 good years and then a whole load of bad ones - so beforehand expected to have more bother.

[Longtermrenter]

17 minutes ago, london_thirtythree said:

Be interested to know more on your experience there.

I kind of had the opposite - I thought being self-employed for the last 5 years as a Contractor that I would face the same problem, but then once 2 years worth of Self Assessments were in front of them, had Nationwide trying to throw fairly extreme levels of debt at me.

I found it pretty weird as 2 years of Self Assessment doesn't really prove anything, could easily have 2 good years and then a whole load of bad ones - so beforehand expected to have more bother.

Our problem is we live frugally. Cook mainly from ingredients, reheat food, have cheap holidays, buy stuff secondhand, our TV (the first one I ever bought new) is 5vyears old, will probably get another 5 to 10 years from it, I fix our vehicles myself, we don't have sky, have cheap mobiles with pay as you go. We are happy and fulfilled. But our income, which is fairly low, won't allow for a mortgage big enough to buy a house, even though we could easily afford repayments due to the above, even if interest rates go up. Could probably pay a mortgage off in 15 years for a modest 3 bedder

[Longtermrenter]

So income levels aren't always a great indicator of your ability to pay a set amount regularly, and certainly why we see people who on paper are rich and wealthy scratching around for change at the end of the month as they waste so much money who are allowed to take on massive debt purely based on their income, not on their sensible budgeting ability.

[Richmond]

57 minutes ago, london_thirtythree said:

Be interested to know more on your experience there.

I kind of had the opposite - I thought being self-employed for the last 5 years as a Contractor that I would face the same problem, but then once 2 years worth of Self Assessments were in front of them, had Nationwide trying to throw fairly extreme levels of debt at me.

I found it pretty weird as 2 years of Self Assessment doesn't really prove anything, could easily have 2 good years and then a whole load of bad ones - so beforehand expected to have more bother.

I would guess it depends on the type of business you are in. So an IT contractor, for example, has a very low cost business with a relatively high income. How does this person really differ from the permie whose only extra security is the notice period in their contract. Low costs means you can much more easily suck up the bad months. It is also much easier to either switch to another contract or go permie again. Now imagine someone who owns a shop, high cost business what with stock, building, employees. The income may or may not be good, but a few bad months and that high cost literally puts you out of business. Plus how easy is it for you to start again or go into a decent paying permie role, I would say a lot harder.

[london_thirtythree]

2 hours ago, Longtermrenter said:

So income levels aren't always a great indicator of your ability to pay a set amount regularly, and certainly why we see people who on paper are rich and wealthy scratching around for change at the end of the month as they waste so much money who are allowed to take on massive debt purely based on their income, not on their sensible budgeting ability.

Mmm.. that's a fine point - is a good indicator how focused we are on income as status, rather than looking at the bigger picture when you include outgoings..

[london_thirtythree]

1 hour ago, Richmond said:

I would guess it depends on the type of business you are in. So an IT contractor, for example, has a very low cost business with a relatively high income. How does this person really differ from the permie whose only extra security is the notice period in their contract. Low costs means you can much more easily suck up the bad months. It is also much easier to either switch to another contract or go permie again. Now imagine someone who owns a shop, high cost business what with stock, building, employees. The income may or may not be good, but a few bad months and that high cost literally puts you out of business. Plus how easy is it for you to start again or go into a decent paying permie role, I would say a lot harder.

Well, have rolled over into employees and fixed costs now, so bit more risk.. (but mortgage forms rarely go into that, just your level of income/dividends)

But yes, if things went belly up, would be able to roll into a permie role that could pay the bills pretty easily so suppose it makes sense.

(however, as with everything mortgage related, that is the state of affairs now, but who knows in 5 or 10 years..)

Edited September 15, 2017 by london_thirtythree

[Longtermrenter]

8 hours ago, london_thirtythree said:

Mmm.. that's a fine point - is a good indicator how focused we are on income as status, rather than looking at the bigger picture when you include outgoings..

Sorry just to clarify - its not even so much the debt of the house they are wasting it on such as things like all the trappings I don't have and mobile insurance, heating insurance, cat insurance, dentist insurance, latest apple gadgets, car loans, dining out/takeaway daily etc.

[crashmonitor]

On ‎15‎/‎09‎/‎2017 at 9:15 AM, TheCountOfNowhere said:

Poor people really are stupid.

Indeed so the innocent get a 35 year mortgage sentence and those that don't pay their rent get themselves a get out of jail free card.

[sPinwheel]

35 years? But I don't plan to live that long.

[sPinwheel]

On 15/09/2017 at 9:15 AM, TheCountOfNowhere said:

Poor people really are stupid.

Or desperate.