Phaedrus Posted June 27, 2006 Share Posted June 27, 2006 (edited) Some sage advice to a 21 year old, in the forces with access to dirt cheap accomodation who is concerned about not being able to afford to buy at the moment! (This from a motorcycle website I frequent) Quote: Originally Posted by balbas Live in the mess for a few years and put 10k in the bank for a deposit, then do a couple of tours and get LOA and all the other allowances - you won't be paying messing and you can't spend much cash when you're overseas - and you'll have another 10k in the bank... So, suddenly you're looking to buy, with a 20k deposit and a good job - go to a specialist mortgage broker rather than a high street lender and you'll be able to borrow 7 times salary. Not that you'll be able to repay it, unless you shack up with a bird who's also got a decent job... Spot on! Save up the deposit and work out a realistic budget then go to an independant mortage broker who will be able to work out the best for you and also a lack none of this 4times salery stuff. IMHO it depends how much you really want to have your own place, do you have to go out every friday/saturday/etc and blow £xx in the pub/restaurant/nightclub, do you have to spend this that and the other on "entertainment"? When you work out your priorites then you should eb able to find a lender that will match your budget throught a broker but do be realistic when budgeting! Example of this is Mrs Izzy and I have mortgage of approx 6times joint salery and we do ok. However we eat out very rarely, dont go to the pub (humm) etc however the saveing goes towards the mortage and we have a super home that we love. Edited June 27, 2006 by Phaedrus Quote Link to comment Share on other sites More sharing options...
DICKDASTARDLY Posted June 27, 2006 Share Posted June 27, 2006 Some sage advice to a 21 year old, in the forces with access to dirt cheap accomodation who is concerned about not being able to afford to buy at the moment! (This from a motorcycle website I frequent) Quote: Originally Posted by balbas Live in the mess for a few years and put 10k in the bank for a deposit, then do a couple of tours and get LOA and all the other allowances - you won't be paying messing and you can't spend much cash when you're overseas - and you'll have another 10k in the bank... So, suddenly you're looking to buy, with a 20k deposit and a good job - go to a specialist mortgage broker rather than a high street lender and you'll be able to borrow 7 times salary. Not that you'll be able to repay it, unless you shack up with a bird who's also got a decent job... Spot on! Save up the deposit and work out a realistic budget then go to an independant mortage broker who will be able to work out the best for you and also a lack none of this 4times salery stuff. IMHO it depends how much you really want to have your own place, do you have to go out every friday/saturday/etc and blow £xx in the pub/restaurant/nightclub, do you have to spend this that and the other on "entertainment"? When you work out your priorites then you should eb able to find a lender that will match your budget throught a broker but do be realistic when budgeting! Example of this is Mrs Izzy and I have mortgage of approx 6times joint salery and we do ok. However we eat out very rarely, dont go to the pub (humm) etc however the saveing goes towards the mortage and we have a super home that we love. Quite right, you can sit there night after night after night looking at your four walls, then turn around when your 70 and wish youd taken out a bigger mortgage to pay into. If you are working all week, at least one night out is a neccesity, not a luxury Quote Link to comment Share on other sites More sharing options...
enworb Posted June 27, 2006 Share Posted June 27, 2006 Some sage advice to a 21 year old, in the forces with access to dirt cheap accomodation who is concerned about not being able to afford to buy at the moment! (This from a motorcycle website I frequent) Quote: Originally Posted by balbas Live in the mess for a few years and put 10k in the bank for a deposit, then do a couple of tours and get LOA and all the other allowances - you won't be paying messing and you can't spend much cash when you're overseas - and you'll have another 10k in the bank... So, suddenly you're looking to buy, with a 20k deposit and a good job - go to a specialist mortgage broker rather than a high street lender and you'll be able to borrow 7 times salary. Not that you'll be able to repay it, unless you shack up with a bird who's also got a decent job... Spot on! Save up the deposit and work out a realistic budget then go to an independant mortage broker who will be able to work out the best for you and also a lack none of this 4times salery stuff. IMHO it depends how much you really want to have your own place, do you have to go out every friday/saturday/etc and blow £xx in the pub/restaurant/nightclub, do you have to spend this that and the other on "entertainment"? When you work out your priorites then you should eb able to find a lender that will match your budget throught a broker but do be realistic when budgeting! Example of this is Mrs Izzy and I have mortgage of approx 6times joint salery and we do ok. However we eat out very rarely, dont go to the pub (humm) etc however the saveing goes towards the mortage and we have a super home that we love. It's no secret that to be a ftb you need to make some big sacrifices. My financial advisor told me he would it expect me to be 40 by the time I was financially comfortable with my first home but then he probably expected me to not make sacrifices and continue wating money on cars, gadgets etc. I was 28 at the time and I think I am comfortable already at 33 because I did compramise. The only thing I didn't cut back on is holidays. Winter and summer but if I didn't i'll be stressed out. The first few months take getting used to. Not knowing how much utility bill are going to be, on top of the mortgage and council tax. But it does get easier and for me I am more financially comfortable with a house than I was with my modified car. There's another point. Some people would rather be seen to have the lastest four wheel drive BMW than use the money to buy a flat or do their prioperty up. Or snort a class A drug because it's the in thing. It's not big and it's not clever. Making sacrifices in order to own a home is, and sadly not all bears appreciate that for homeowners it really is worth all the initial sweat and tears. Quote Link to comment Share on other sites More sharing options...
Warwickshire Lad Posted June 27, 2006 Share Posted June 27, 2006 (edited) The "you must make sacrifices" argument tends to come across as a finger-wagging exercise at FTBers to tell them to stop whingeing and just get a very large mortgage. These arguments tend to come from people who bought pre-bubble, and don't really understand a house price bubble. Making sacrificies is a fair argument, but I think it must be made within the context of a fairly valued housing market, which the UK market and other bubble markets simply are not. In a bubble, mania takes over from common sense. So we've got people who have no life at all because they are just paying their mortgages with every spare penny. When Interest Rates rise, houses will become a debt prison for many who were persuaded to buy at the top of the bubble because "you must make sacrifices" blah blah blah. Edited June 27, 2006 by Warwickshire Lad Quote Link to comment Share on other sites More sharing options...
SCUMBAG Posted June 27, 2006 Share Posted June 27, 2006 (edited) Some sage advice to a 21 year old, in the forces with access to dirt cheap accomodation who is concerned about not being able to afford to buy at the moment! (This from a motorcycle website I frequent) Quote: Originally Posted by balbas Live in the mess for a few years and put 10k in the bank for a deposit, then do a couple of tours and get LOA and all the other allowances - you won't be paying messing and you can't spend much cash when you're overseas - and you'll have another 10k in the bank... So, suddenly you're looking to buy, with a 20k deposit and a good job - go to a specialist mortgage broker rather than a high street lender and you'll be able to borrow 7 times salary. Not that you'll be able to repay it, unless you shack up with a bird who's also got a decent job... Spot on! Save up the deposit and work out a realistic budget then go to an independant mortage broker who will be able to work out the best for you and also a lack none of this 4times salery stuff. IMHO it depends how much you really want to have your own place, do you have to go out every friday/saturday/etc and blow £xx in the pub/restaurant/nightclub, do you have to spend this that and the other on "entertainment"? When you work out your priorites then you should eb able to find a lender that will match your budget throught a broker but do be realistic when budgeting! Example of this is Mrs Izzy and I have mortgage of approx 6times joint salery and we do ok. However we eat out very rarely, dont go to the pub (humm) etc however the saveing goes towards the mortage and we have a super home that we love. Search in my post code on rightmove. Range £60k - 250k. Type of property - 1 bed flat. Average result = 150k My salary = £24k (above average for my qualifications in my area). Qualifications - First class honours degree in electrical/electronic engineering, Chartered Engineer. Available deposit saved over 5 years - 20k Mortgage required - 130k http://www.halifax.co.uk/mortgages/afforda...alculator.shtml How much can I borrow? The amount you can borrow is between £105,600 and £120,000. This is for illustrative purposes only. Get a better indication of how much you can borrow by completing an online Mortgage Promise. Alternatively call us on 08458 50 37 05 to speak to a Mortgage Adviser. The exact amount of the loan available to you is dependant on credit scoring and underwriting as part of a full mortgage application. Your home may be repossessed if you do not keep up repayments on your mortgage Assuming I borrow 130k at 5% (and remember I can only borrow £120k so this is purely hypothetical - btw thanks for the financial advice but I think I'll talk to my financial advisor before I go to some dodgy back street rip off merchant) Your cost illustration Monthly payment for a repayment mortgage: £756.92 Monthly payment an interest-only mortgage: £539.49 Monthly take home = £1.3k minus mortgage payment (£698.69) = £543.08 minus council tax (£78.62) = £464.46 So before I pay any utility bills or food I have £464.46 left a month. After those deductions I would only be able to afford one Ipod a month!!!! First Time Buyers are at 7.8% of the market compared to over 50% 5 years ago (coincidentally when enworb appears to have bought his/her house) and this is why. The market needs FTBs in order to survive with or without BTLs (BTLs will hold on to their property and will not move up the chain so chains will still collapse). Can you put a little thought into your posts before you make them please? Edited June 27, 2006 by SCUMBAG Quote Link to comment Share on other sites More sharing options...
Levy process Posted June 27, 2006 Share Posted June 27, 2006 The "make sacrifices" argument seemed to work well for those in their 50s and 60s now, because after early sacrifices where they were spending all their earnings on paying a big mortgage, inflationary wage rises inflated away the mortgage debt as a fraction of their take-home pay. This mechanism simply does not exist now. Unless it comes back, and we return to WAGE inflation, then big sacrifices early in the mortgage mean big sacrifices a long way through the 25 years. At the moment, inflation is pretty low. And even if goods start to inflate, I'd worry that cheap labour from the rest of the world means that wages will not inflate much, and may even DEFLATE. As far as I'm concerned, the "make big sacrifices" argument is the one trotted out by people approaching retirement, for whom it worked (through no skill of their own I might add - they had the heavy lifting done for them by inflationary wage rises and cushy public sector pensions etc.) It's a common occurrence in life: Old people droning on about "the way to do it is ... bla bla .. the way I did it ... bla bla... " without realising that they are just in the lucky bit of some random distribution. They could just as well have ended up paying huge mortgage repayments all their life and have been telling you "whatever you do don't mortgage up to the limit, because it will be a burden round your neck for ever". It all depends on what happens to wages from now on. Anybody got any reason to expect large inflation in wages over the next 20 years? Answers here please........ Quote Link to comment Share on other sites More sharing options...
Marina Posted June 27, 2006 Share Posted June 27, 2006 Search in my post code on rightmove. Range £60k - 250k. Type of property - 1 bed flat. Average result = 150k My salary = £24k (above average for my qualifications in my area). Qualifications - First class honours degree in electrical/electronic engineering, Chartered Engineer. Available deposit saved over 5 years - 20k Mortgage required - 130k http://www.halifax.co.uk/mortgages/afforda...alculator.shtml How much can I borrow? The amount you can borrow is between £105,600 and £120,000. This is for illustrative purposes only. Get a better indication of how much you can borrow by completing an online Mortgage Promise. Alternatively call us on 08458 50 37 05 to speak to a Mortgage Adviser. The exact amount of the loan available to you is dependant on credit scoring and underwriting as part of a full mortgage application. Your home may be repossessed if you do not keep up repayments on your mortgage Assuming I borrow 130k at 5% (and remember I can only borrow £120k so this is purely hypothetical - btw thanks for the financial advice but I think I'll talk to my financial advisor before I go to some dodgy back street rip off merchant) Your cost illustration Monthly payment for a repayment mortgage: £756.92 Monthly payment an interest-only mortgage: £539.49 Monthly take home = £1.3k minus mortgage payment (£698.69) = £543.08 minus council tax (£78.62) = £464.46 So before I pay any utility bills or food I have £464.46 left a month. After those deductions I would only be able to afford one Ipod a month!!!! First Time Buyers are at 7.8% of the market compared to over 50% 5 years ago (coincidentally when enworb appears to have bought his/her house) and this is why. The market needs FTBs in order to survive with or without BTLs (BTLs will hold on to their property and will not move up the chain so chains will still collapse). Can you put a little thought into your posts before you make them please? The fact that FTBs are now only 7.8% of the market - and the market has refused to slow down, stop or crash - is certain proof that the market has changed and FTBs are no longer needed. Get used to it. You will be renting forever. Quote Link to comment Share on other sites More sharing options...
enworb Posted June 27, 2006 Share Posted June 27, 2006 Appologies for not being clear. I sympathise with those wanting to own but are basically finding it impossible. My qualm is with the type of person that complains that £1000 per month for a mortgage is ridiculous but they don't see anything wrong with sticking that much up their noses - if you know what I mean. I am a believer that most things are achievable if you want them bad enough. Sorry again if this offends anyone but that's just my opinion. Quote Link to comment Share on other sites More sharing options...
Rachman Posted June 27, 2006 Share Posted June 27, 2006 (edited) £24K gross is £1,500 take home, not £1,300 If you rented, it would presumably cost you £500 a month anyway (based on a low 4% yield), so the extra cost is about £190 a month to own (repayment basis)..... - the alternative is renting, how do you propose to meet the cost of that and live in a similar property as it's not much different ? Edited June 27, 2006 by Rachman Quote Link to comment Share on other sites More sharing options...
enworb Posted June 27, 2006 Share Posted June 27, 2006 £24K gross is £1,500 take home, not £1,300 Could be paying into a pension Quote Link to comment Share on other sites More sharing options...
dnd Posted June 27, 2006 Share Posted June 27, 2006 (edited) Example of this is Mrs Izzy and I have mortgage of approx 6times joint salery and we do ok. However we eat out very rarely, dont go to the pub (humm) etc however the saveing goes towards the mortage and we have a super home that we love. People spending less - people start losing jobs - people spend less - etc - a vicious cycle Meanwhile the banks are lending the money they receive to BTL landlords to place even more people in this situation It's gonna go bang.... Edited June 27, 2006 by dnd Quote Link to comment Share on other sites More sharing options...
murpaul Posted June 27, 2006 Share Posted June 27, 2006 The fact that FTBs are now only 7.8% of the market - and the market has refused to slow down, stop or crash - is certain proof that the market has changed and FTBs are no longer needed. Get used to it. You will be renting forever. Or emigrating, taking our wealth creating skills, and tax revenues with us. Good luck with the BTL landlords, I'm sure they will provide the UK with the kind of skillsbase required for the C21th. Quote Link to comment Share on other sites More sharing options...
Rachman Posted June 27, 2006 Share Posted June 27, 2006 Could be paying into a pension Right, so his INVESTMENTS get taken off his available money - right - that's hardly different from our friend Mrs Beg is it - he/she's paying 13% into a pension (plus no doubt employer matching to an extent) and is moaning about house prices. The only sympathy for that is if they are compulsory contributions. However, given the tone of the post, I had assumed it was sleight of numbers to prove the point.... Quote Link to comment Share on other sites More sharing options...
dnd Posted June 27, 2006 Share Posted June 27, 2006 (edited) The fact that FTBs are now only 7.8% of the market - and the market has refused to slow down, stop or crash - is certain proof that the market has changed and FTBs are no longer needed. Get used to it. You will be renting forever. ...or until the banks tighten up their credit (which is the only thing driving HPI) when commodity fueled inflation filters through to interest rates It's going to be a global and it's going to be sudden http://business.timesonline.co.uk/article/...2244361,00.html Edited June 27, 2006 by dnd Quote Link to comment Share on other sites More sharing options...
SarahBell Posted June 27, 2006 Share Posted June 27, 2006 The "make sacrifices" argument seemed to work well for those in their 50s and 60s now, because after early sacrifices where they were spending all their earnings on paying a big mortgage, inflationary wage rises inflated away the mortgage debt as a fraction of their take-home pay. The sacrifices my parents made were working hard, mum going back to work when I was 6 weeks old - and then after my little sister she had to work round us more - so had to do jobs that fitted in more. I spose these days maternity leave is usually much more generous - but still people don't have kids. Quote Link to comment Share on other sites More sharing options...
Levy process Posted June 27, 2006 Share Posted June 27, 2006 Or emigrating, taking our wealth creating skills, and tax revenues with us. Good luck with the BTL landlords, I'm sure they will provide the UK with the kind of skillsbase required for the C21th. It's a nice idea to think that people can hit back like this, but I fear this is just powerless rage. I don't think a few angry people emigrating is going to change the situation one bit. I think Marina's nearly right: If you are renting now, you're probably going to be renting for a long time. So long in fact, that even if conditions do change to favour the FTB, most who would like to be FTB'ers now will be too old to start the 25 or 30 year mortgage. Sad but probably true. Quote Link to comment Share on other sites More sharing options...
SCUMBAG Posted June 27, 2006 Share Posted June 27, 2006 The fact that FTBs are now only 7.8% of the market - and the market has refused to slow down, stop or crash - is certain proof that the market has changed and FTBs are no longer needed. The fact that the Land Registry figures are showing falls over most of the country and that the market is stagnating is certain proof that the market has turned. Get used to it. You will be renting forever. Arrogant, condescending ****** Quote Link to comment Share on other sites More sharing options...
steve99 Posted June 27, 2006 Share Posted June 27, 2006 I get the impression that a lot of younger people on this board seem to think that it was so much easier in the old days, you could buy a flat in London for £30K etc etc, however when prices were that cheap so were the wages, my wage in those days was about £3k per year. It aint that different today than 20yrs ago, house prices were cheaper but the bank expected you to save 20% deposit and have an account with them for about 3 years, to do this you had to stay home at night and eat sandwiches every day for lunch, then when you got your mortgage you were paying 10% + interest rates which for us increased to 17% and still having to stay in at the weekends and eat sandwiches, after about 15yrs it started to improve, so if your a couple age 25 now, just give up your life for the next 15 years and all will be well, unless of course you want a bigger dewlling or start panicking about no retirement savings and realise you need twice as much again as you paid for your house to cover your pension. Oh and those that think every baby boomer has a brilliant company paid pension scheme, think again, not many do, what you read in the papers re olden day pensions is crap. Quote Link to comment Share on other sites More sharing options...
Levy process Posted June 27, 2006 Share Posted June 27, 2006 (edited) Arrogant, condescending ****** I disagree. I think it's very likely to be true for most people in that situation. Just because you don't like to hear the truth, doesn't mean that it is arrogant or condescending. Edited June 27, 2006 by Levy process Quote Link to comment Share on other sites More sharing options...
SCUMBAG Posted June 27, 2006 Share Posted June 27, 2006 (edited) I disagree. I think it's very likely to be true for most people in that situation. Just because you don't like to hear the truth, doesn't mean that it is arrogant or condescending. It might be true and probably is but it's the attitude and the tone that comes with it that I don't like. It comes across as 'I won, you lost, get over it'. Besides I lost all respect for the post when I read the 'new paradigm' part. You need people coming into a market to be able to sustain it. Without FTBs supporting the bottom of the chain there is nobody to support the rest of the chain and so it collapses and the market becomes dominated with oversupply hence prices have to be reduced. BTLs have come in to take the pressure off and they give the illusion of rising prices, but with no intention of selling up and moving up the ladder the problem not only still exists but is actually made worse because they lock more FTBs out who would be looking for a bigger property when they start a family. Any market needs new blood coming into it to survive. To suggest otherwise is just nonsense. Edited June 27, 2006 by SCUMBAG Quote Link to comment Share on other sites More sharing options...
Levy process Posted June 27, 2006 Share Posted June 27, 2006 It might be true and probably is but it's the attitude and the tone that comes with it that I don't like. It comes across as 'I won, you lost, get over it'. I'll let Marina speak for him/herself, but I'd say that what I've read of his/her posts over the last year would lead me to think that he/she was never gloating about winning etc. I'd guess it was more an attempt to get people to see the reality of the current situation, and to stop believing things will necessarily resolve themselves the way a lot on here "predict". Quote Link to comment Share on other sites More sharing options...
MRSB Posted June 27, 2006 Share Posted June 27, 2006 The fact that the Land Registry figures are showing falls over most of the country and that the market is stagnating is certain proof that the market has turned. Arrogant, condescending ****** Well done Scumbag my thoughts almost exactly. As for you Marina, you should be ashamed of yourself....if your comments were not meant to be arrogant and condescending in the extreme, then you should apologise. MRS B Quote Link to comment Share on other sites More sharing options...
dnd Posted June 27, 2006 Share Posted June 27, 2006 Sociopaths don't 'feel' for other people.... Quote Link to comment Share on other sites More sharing options...
marko Posted June 27, 2006 Share Posted June 27, 2006 Or emigrating, taking our wealth creating skills, and tax revenues with us. Good luck with the BTL landlords, I'm sure they will provide the UK with the kind of skillsbase required for the C21th. ha ha! I love this post! Soooo true! Really sums up the ludicrous nature of the situation and the stupidity of the self-congratulatory 'I did it my way' BTL kn0b who mistakes his/her portfolio of DEBT with any kind of REAL wealth-creation. Microelectronics, textiles, chemistry, construction materials, medicine, advanced drugs, telecommunications....no f**k all that, we all know who the REAL wealth creators are, don't we? BTL Landlords of course! Quote Link to comment Share on other sites More sharing options...
Rachman Posted June 27, 2006 Share Posted June 27, 2006 (edited) The fact that the Land Registry figures are showing falls over most of the country and that the market is stagnating is certain proof that the market has turned. Arrogant, condescending ****** Mr S Bag, so go on then, tell me the big difference in cost to you renting an identical property, you presumably make about £800 net on your £20000, but the rent's presumably at least £625 a month (5% and £500 a month at 4%). How do you afford to rent it on £24K - or do you just rent somewhere cheaper ? Edited June 27, 2006 by Rachman Quote Link to comment Share on other sites More sharing options...
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