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Trigger

Here Is My 2 Year Plan To Get On The Property Ladder. What You Think?

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Here is my 2 year plan to get on the property ladder.

Save 30 grand for May 2009. Interest rate will rise for 1st Oct and 1st November and will stay at 6.25% till 1st March 2008. It will then rise to 7.00% by the end of December 2008.... Only then will we see a dramatic change in the housing market. I get to make the most of the high interest rates for saving a good deposit and monitor the housing market during mid-late 2009 and then wait for the property I am looking for. I know it’s a very, very, precise plan. But that is how I envisage it.

I think that the MPC should have increased the interest rates by at least 0.50% each time as this would have been more of a shock and might have made people think twice. As 0.25% is only approximately 16 pound a month on a £100,000 mortgage.

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I think you should do your sums.

If you took a fixed rate at 6% today for at least 10years, you would save a lot of money, much more than the 30k your propose to save.

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Bravo, well thought scenario.

And then, by 2010 the housing collapse led the country into recession and you lose your job, default on your mortgage payments and lose your house.

There is no easy gain in recession times

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err I'm not too sure about this. why would you want to buy in a (potentially) falling market, where you are saving money the longer you put it off.

oh yes silly me...where's my anti-troll crossbow

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err I'm not too sure about this. why would you want to buy in a (potentially) falling market, where you are saving money the longer you put it off.

oh yes silly me...where's my anti-troll crossbow

I do hope you are not a real Doctor.

If you can borrow money today fixed for 20 years at 6%, and you are reasonbly confident that property will drop due to high interest rates in the future, then its not hard to see that to take the cheap money offered today, can save you money on mortgage payments over 25years that will far outweigh the savings you might make if prices drop.

If you borrow at 6% fixed today, interest rates only have to rise to 8% for you to be better off than a 30% drop in property prices in the future.

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I do hope you are not a real Doctor.

If you can borrow money today fixed for 20 years at 6%, and you are reasonbly confident that property will drop due to high interest rates in the future, then its not hard to see that to take the cheap money offered today, can save you money on mortgage payments over 25years that will far outweigh the savings you might make if prices drop.

If you borrow at 6% fixed today, interest rates only have to rise to 8% for you to be better off than a 30% drop in property prices in the future.

oh my god your so right, im off to buy today! scew that anyone know where i can buy a house online?

your probably intentionally forgetting the deposit in this situation.

you have a 50k deposit

say a house costs 250k today, that is a 200k mortgage @ 6% or which is exactly £1000pm IO

now we have had this 30% crash but interest rates are 30% higher. or the house is now 175k but interest rates 7.8%.

you put down your 50k deposit and so you need a 125k @ 7.8% =£ 812.50 pm mortgage

SPIN THAT ONE

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oh my god your so right, im off to buy today! scew that anyone know where i can buy a house online?

your probably intentionally forgetting the deposit in this situation.

you have a 50k deposit

say a house costs 250k today, that is a 200k mortgage @ 6% or which is exactly £1000pm IO

now we have had this 30% crash but interest rates are 30% higher. or the house is now 175k but interest rates 7.8%.

you put down your 50k deposit and so you need a 125k @ 7.8% =£ 812.50 pm mortgage

SPIN THAT ONE

OK , I'll bite.

Lets say that crash takes 3 years, during which time you are paying rent.

It only fair to compare the first 25 year term with a 22 year term on the second, which changes the sums substantially. Also saving 50k in years in way beyond most people means, the poster said 30k, and I assume he already has a chunk of that saved.

You also need to take into account 3 years of monthly begrudgemnt and resentment when you hand over your money to a landlord.

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oh my god your so right, im off to buy today! scew that anyone know where i can buy a house online?

your probably intentionally forgetting the deposit in this situation.

you have a 50k deposit

say a house costs 250k today, that is a 200k mortgage @ 6% or which is exactly £1000pm IO

now we have had this 30% crash but interest rates are 30% higher. or the house is now 175k but interest rates 7.8%.

you put down your 50k deposit and so you need a 125k @ 7.8% =£ 812.50 pm mortgage

SPIN THAT ONE

Busted!! :lol:

(and I am a real Doctor. how you like them apples :lol::lol: )

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I am looking at spending 140K on a house with 30k deposit it would reduce my monthly payments by £200 per month approx in the current climate and will save me 60k in repayments over the term….. Obviously depending on how the markets fluctuate over the term of the mortgage.

In the next two years I believe there will be a 10% down in house prices so that is why I am holding off and saving until I am happy I am ready to buy.

I would sooner save and wait for the right time to buy than bite off more than I can handle just to get on the ladder and live in an area I am not happy with.

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I live with parents so pay very little compared to renting. I would never rent as it is dead money. So I have the choice when I want to get on the property ladder, as opposed to being pushed on to it.

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I live with parents so pay very little compared to renting. I would never rent as it is dead money. So I have the choice when I want to get on the property ladder, as opposed to being pushed on to it.

Do your parents support your investment strategy? ie being subsidized?

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Course they do. They are not going to kick me out! Parents dont look at it like they are being subsidised. Dont think many parents would force their offspring on to the property ladder at the moment.

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Course they do. They are not going to kick me out! Parents dont look at it like they are being subsidised. Dont think many parents would force their offspring on to the property ladder at the moment.

Dont forget that renting is so cheap and landlords subsidize to the tune of thousands per year.

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OK , I'll bite.

Lets say that crash takes 3 years, during which time you are paying rent.

It only fair to compare the first 25 year term with a 22 year term on the second, which changes the sums substantially. Also saving 50k in years in way beyond most people means, the poster said 30k, and I assume he already has a chunk of that saved.

You also need to take into account 3 years of monthly begrudgemnt and resentment when you hand over your money to a landlord.

ahh the good old one of wasted money on rent right?

i guess interest on the mortgage is sweeter to say good bye to than rent?

personally id rather hand money over to a landlord than a bank,

for example, just so you get it. you must know what an Interest only mortgage is. what do you think that monthly check to the bank is doing????? it is wasted money! just like rent is "wasted money"

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It might take a little longer than 2-3 years for the market to correct itself, if indeed thats what it does.

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I live with parents so pay very little compared to renting. I would never rent as it is dead money. So I have the choice when I want to get on the property ladder, as opposed to being pushed on to it.

are you trying to sound like a troll

anyone who says renting is dead money is either a troll, a VI, or just retarded

when it comes to a property you have a few options

1: renting

2: buying with a mortgage

3: buying outright with cash

they are all dead money in your eyes!

renting is dead money because you hand over money to the landlord

buying with a mortgage is dead money because you hand out interest to the bank

buying with cash is dead money because you no longer get interest from the bank for that cash!

renting is not dead money.

that is a simple thing to understand.

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Trigger, how much is it costing you per month to live with your parents?

You sound like you're doing what I'm doing; living with my parents, paying them some money every month, saving and hoping that prices become sensible eventually. If they don't become sensible though, and I feel that I have to move out, I'll rent.

You won't catch me buying a house at these prices.

Edited by JoeDavola

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I pay £35 a week and thats including food etc....so next to nothing with the food I eat. lol. Saving 10k to 15k a year. I am very flexible even I have to wait 4 years it will just mean I have a lot more saved. It is a poor situation now for first time buyers, as realistically you need to get a property with someone as you need two wages coming in to still be able to enjoy live, as opposed to work and then sitting in your house coz you have no money. lol.

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I pay £35 a week and thats including food etc....so next to nothing with the food I eat. lol. Saving 10k to 15k a year. I am very flexible even I have to wait 4 years it will just mean I have a lot more saved. It is a poor situation now for first time buyers, as realistically you need to get a property with someone as you need two wages coming in to still be able to enjoy live, as opposed to work and then sitting in your house coz you have no money. lol.

You should pay your parents something more than £35 a week. They have spent a fortune on you to date, so it would be a nice touch to give them something more than what the electricity meter suggests. Obviously up to you.

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I do. Haha. You want me to post everything I have done for them in my life?? I am here to talk about the property situation. Along with all the problems that it has created and what will happen next, as I want to to get on the property ladder at the best time possible. Not talk about how well\poor I treat my parents and immediate family.

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I do. Haha. You want me to post everything I have done for them in my life?? I am here to talk about the property situation. Along with all the problems that it has created and what will happen next, as I want to to get on the property ladder at the best time possible. Not talk about how well\poor I treat my parents and immediate family.

You introduced them into the equation.

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I pay mine £200 a month.

However that's more than anyone I know. Loads of people I know still don't pay anything (this is at the age of 23), or pay £100 a month.

Edited by JoeDavola

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