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delboypass

Firsts Rung - Bbc - Your Comments

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I made a thread on this yesterday, but it hasn't turned up :(

The transcript of the programme is here

This woman earns £17,000 and claims to have a take home pay of £1,100 which confused me as I didn't take that amount home til I earned £20,000. Not sure if pension contributions are enough to make up the difference. She had debts, and yet a mortgage broker advised her she could afford a £100,000 property and that an interest only mortgage was the way to go. Absolute madness, particularly in Glasgow where there are cheaper properties available.

This quote jumped out at me

KOUBAYSSI: Yeah, when I went through the figures with Ray,

the interest-only mortgage is the only one that’s really going to give me

the buying power to get the kind of property I want. Before I did this

programme I was like, no way interest-only mortgages. But after

speaking to Ray, I kind of changed my views quite drastically on that,

and I found out if I was disciplined enough, I could pay some extra

money per month on to my mortgage which I didn’t even know was a

possibility with interest-only mortgages - and that’s really appealing to

me.

What about getting the kind of property you can afford, rather than the one you want? And how can someone on £17,000 pay off the capital simply by paying a little bit extra every month?

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This woman earns £17,000 and claims to have a take home pay of £1,100 which confused me as I didn't take that amount home til I earned £20,000. Not sure if pension contributions are enough to make up the difference. She had debts, and yet a mortgage broker advised her she could afford a £100,000 property and that an interest only mortgage was the way to go. Absolute madness, particularly in Glasgow where there are cheaper properties available.

100,000 pound mortgage isnt so bad, and an interest only mortgage is a way to get her on the ladder. Doesnt mean she is going to spend 25 years paying only the interest, she can change to a repayment mortgage at any time, or use another repayment vehicle.

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100,000 pound mortgage isnt so bad, and an interest only mortgage is a way to get her on the ladder. Doesnt mean she is going to spend 25 years paying only the interest, she can change to a repayment mortgage at any time, or use another repayment vehicle.

I wouldn't dream of taking on a mortgage at nearly 6 times my wage - I think it is utterly crazy. She was advised to take it on for 30 years. She has debts too - it is madness. She'd be far better paying off her debts, and getting some savings behind her - it didn't sound like she was in the sort of job which was going to pay huge amounts at any point. Glasgow isn't that expensive - we aren't talking quarter of a million as standard so there's just no need for it.

I think if an interest only mortgage is the only way to get on the ladder, then you're better staying in rented accommodation until something changes.

Edited by Scarecrow

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In a democracy, if 65% of voters own their own property and 5% of voters are wannabe first-time buyers ever increasing house prices keeps the vast majority happy and wealthy. The 5% only matter when it comes to filling essential jobs in areas of very high prices.

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I wouldn't dream of taking on a mortgage at nearly 6 times my wage - I think it is utterly crazy. She was advised to take it on for 30 years. She has debts too - it is madness. She'd be far better paying off her debts, and getting some savings behind her - it didn't sound like she was in the sort of job which was going to pay huge amounts at any point. Glasgow isn't that expensive - we aren't talking quarter of a million as standard so there's just no need for it.

I think if an interest only mortgage is the only way to get on the ladder, then you're better staying in rented accommodation until something changes.

My point still remains that you can change your mortgage at any time. An interest only mortgage is just the 1st step on the ladder and helps first time buyers make that first step. Her wage will increase over time, her property will go up over the long term, and her circumstances will change. Seems like an obvious decision to me if its affordable.

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My point still remains that you can change your mortgage at any time. An interest only mortgage is just the 1st step on the ladder and helps first time buyers make that first step. Her wage will increase over time, her property will go up over the long term, and her circumstances will change. Seems like an obvious decision to me if its affordable.

change at any time? what if ther value drops a bit and then lending requirements become tighter - negative equity , credit cards. a little bit of mortgage arrears. not out of the question at these lending multiples and with life costs rising.

Spirals a bit. Even then if she holds on to the property, her credit rating may have suffered enough , and the 'good times' of easy credit next-time-around be far enough off that nobody will offer her another mortgage again anyway. Oh , and her cheap fixed/capped rate finishes and she's trapped into the lender's standard rate well above base rate...

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My point still remains that you can change your mortgage at any time. An interest only mortgage is just the 1st step on the ladder and helps first time buyers make that first step. Her wage will increase over time, her property will go up over the long term, and her circumstances will change. Seems like an obvious decision to me if its affordable.

You don't know that her wage will rise, or that her property will go up in value. Her circumstances could of course change - she could lose her job! Seems a highly risky step to take for me, and a stupid one when so many flats are available at less than £100k in Glasgow. But each to their own, I am very risk adverse and couldn't sleep with such a high mortgage on such a low pay, with no proper set up to pay the capital.

One of the posts on the bbc stated that she should try living on the budget she'd allowed herself, and save the rest, just to make sure she did have the discipline needed. I think that was far better advice than what she got from the mortgage broker.

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My point still remains that you can change your mortgage at any time. An interest only mortgage is just the 1st step on the ladder and helps first time buyers make that first step. Her wage will increase over time, her property will go up over the long term, and her circumstances will change. Seems like an obvious decision to me if its affordable.

How will any rise in the value of the property help her to pay off her mortgage?

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My point still remains that you can change your mortgage at any time. An interest only mortgage is just the 1st step on the ladder and helps first time buyers make that first step. Her wage will increase over time, her property will go up over the long term, and her circumstances will change. Seems like an obvious decision to me if its affordable.

Her wage might not increase. She might be made redundant or even sacked. Her propery might loose value if some undesirables move in next door. Her circumstances might chnage for the worse. Interest rates could rise dramatically. Her property could fall dramatically. Seems like its obviously unaffordable to begin with any old how.

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As far as I can remember, she also had a £20k deposit from her Stepdad....wish I had a stepdad like that.....

He saw it as an 'investment' though so I think he must be expecting it back at some point.

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This woman earns £17,000 and claims to have a take home pay of £1,100 which confused me as I didn't take that amount home til I earned £20,000.

I'm on £17K and I take home £1,104. Maybe it's 'cause the personal allowance has increased since you were on £17K, although I admit I don't know when that was.

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Shedfish,

What has happened to your shed with the fish in it?

Don´t tell me you´ve gone and sold it for a mark-up of half a milion pounds to an FTB on an interest-only mortgage ten times his or her salary.

:o

Edited by Caledonian-Emigre

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Guest Shedfish

Shedfish,

What has happened to your shed with the fish in it?

Don´t tell me you´ve gone and sold it for a mark-up of half a milion pounds to an FTB on an interest-only mortgage ten times his or her salary.

:o

:D

it's on the market -

i drove past this the other day, it really is even smaller than it looks

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I'm on £17K and I take home £1,104. Maybe it's 'cause the personal allowance has increased since you were on £17K, although I admit I don't know when that was.

I can't get my head round that as my take home pay is £1,370 and I'm on a bit more than £23k. Must just be down to pension and union contributions I guess but seems weird to me.

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  • 301 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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