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Mortgages - Forced Saving

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My 20 yo niece and her boyfriend are trying to buy their first flat (130k? 1 bed? poor s.o.bs)

I've been observing their behaviour.

They live with the girl's mum, and despite pulling close to 50k between them, are pathologically incapable of saving any money. In fact they are now 7k on the cards and a 5k car loan.

Now my point is, while living at home with mum and still being unable to save a brass farthing, how in hell could they expect to service a mortgage 5 times the size of the nominal rent they pay the old lady?

Because...

while they don't have a mortgage, 'something always comes up'. E.g. another holiday in Xanthi or a new digital camera. So they spend it.

When they get a mortgage, they won't have that option anymore because the money will be whisked away before they see it.

And bingo. 25 years later, they will have a big pot of equity in the 1 bed flat. Maybe.

Anyway, what I'm trying to say is that maybe kids understand this subconsciously, and know that unless they commit mortgage-wise, they will NEVER have any money. Which might be why they still seem keen lemming-like to plunge over the White Cliffs of IR. Just a thought

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My 20 yo niece and her boyfriend are trying to buy their first flat (130k? 1 bed? poor s.o.bs)

I've been observing their behaviour.

They live with the girl's mum, and despite pulling close to 50k between them, are pathologically incapable of saving any money. In fact they are now 7k on the cards and a 5k car loan.

Now my point is, while living at home with mum and still being unable to save a brass farthing, how in hell could they expect to service a mortgage 5 times the size of the nominal rent they pay the old lady?

Because...

while they don't have a mortgage, 'something always comes up'. E.g. another holiday in Xanthi or a new digital camera. So they spend it.

When they get a mortgage, they won't have that option anymore because the money will be whisked away before they see it.

And bingo. 25 years later, they will have a big pot of equity in the 1 bed flat. Maybe.

Anyway, what I'm trying to say is that maybe kids understand this subconsciously, and know that unless they commit mortgage-wise, they will NEVER have any money. Which might be why they still seem keen lemming-like to plunge over the White Cliffs of IR. Just a thought

Or maybe it's the reverse that's true. The youngster who has a savings ethic is aware that property, in the long run, has been a good way of saving.

Perhaps they're more mentally mature than the 35 yr old staying with parents.

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My 20 yo niece and her boyfriend are trying to buy their first flat (130k? 1 bed? poor s.o.bs)

I've been observing their behaviour.

They live with the girl's mum, and despite pulling close to 50k between them, are pathologically incapable of saving any money. In fact they are now 7k on the cards and a 5k car loan.

Now my point is, while living at home with mum and still being unable to save a brass farthing, how in hell could they expect to service a mortgage 5 times the size of the nominal rent they pay the old lady?

Because...

while they don't have a mortgage, 'something always comes up'. E.g. another holiday in Xanthi or a new digital camera. So they spend it.

When they get a mortgage, they won't have that option anymore because the money will be whisked away before they see it.

And bingo. 25 years later, they will have a big pot of equity in the 1 bed flat. Maybe.

Anyway, what I'm trying to say is that maybe kids understand this subconsciously, and know that unless they commit mortgage-wise, they will NEVER have any money. Which might be why they still seem keen lemming-like to plunge over the White Cliffs of IR. Just a thought

Debt discipline. It's a wonderful thing... just ask KKR.

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You are of course, right, PG. Paying off the mortgage *forces* you to buy an asset, and assets have earnings which will pay for itself over time. However, with so many interest-only mortgages now you have to wonder whether that is still the case.

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Mortgages - Forced Saving, A factor we haven't considered.

er, yes, we have:

http://www.housepricecrash.co.uk/forum/ind...st&p=286626

http://www.housepricecrash.co.uk/forum/ind...st&p=281453

http://www.housepricecrash.co.uk/forum/ind...st&p=274263

http://www.housepricecrash.co.uk/forum/ind...st&p=236511

Seeing the same old tosh over and over again on this site is one thing, but claiming a eureka moment is quite another.

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oops. my apologies. It never occurred to me that other HPC members might have already posted stories about my niece. Granted she's a popular girl, but before I post again I'll be sure to search for 'psychological aspects of mortgages and PGs niece', 'force saving by PGs niece' and 'sledgehead knows all about PropertyGurus niece'.

Sorry

Edited by PropertyGuru

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I am always amazed when people who are living with parents or are for various other reasons not paying full rent/mortgage manage to save no money, in fact go into debt. It is brilliant opportunity to save some dosh (I never had that chance) but instead they piss it up the wall, some how. I know a few people like this. Really can't work it out. They'll moan about being skint, and you're thinking where does it go?

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oops. my apologies. It never occurred to me that other HPC members might have already posted stories about my niece. Granted she's a popular girl, but before I post again I'll be sure to search for 'psychological aspects of mortgages and PGs niece', 'force saving by PGs niece' and 'sledgehead knows all about PropertyGurus niece'.

Sorry

Yeah, see, the title you wrote, that is you, rather than me, ie the title that is your responsibility, was "forced saving - a factor we haven't considered."

Nothing about your niece in that. And if you want to talk about your niece's popularity, there are plenty of sites that will bung you a few quid for it.

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  • 302 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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