US Citizen Posted March 3, 2008 Share Posted March 3, 2008 A person who works for me despite everyone saying "dont do it", is insistant on buying a £300,000 home. Theres only one problem, the deposit. Lloyds TSB have offered him a mortgage in principle, but they want 80% LTV on a £300,000 which is £60,000 and they want to charge an arrangement fee of £895 and he will have to stamp duty of £3,000 + Then he has the joy of paying £ 2,168.42 a month for the next 25 years. Everyone has been taking p1ss. I said to him, rent a house, save the money if prices come down, buy if not think how much you have saved. He is determined and theres no talking to some people. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 3, 2008 Share Posted March 3, 2008 A friend of mine thinks they have sold their home and they are looking to buy another one. I said to STR but they want to buy again as they have too many tools in their shed and don't want the hassle of a double move--from rental to buying. Sheeple will always be with us. Quote Link to comment Share on other sites More sharing options...
M21er Posted March 3, 2008 Share Posted March 3, 2008 A person who works for me despite everyone saying "dont do it", is insistant on buying a £300,000 home. Theres only one problem, the deposit.Lloyds TSB have offered him a mortgage in principle, but they want 80% LTV on a £300,000 which is £60,000 and they want to charge an arrangement fee of £895 and he will have to stamp duty of £3,000 + Then he has the joy of paying £ 2,168.42 a month for the next 25 years. Everyone has been taking p1ss. I said to him, rent a house, save the money if prices come down, buy if not think how much you have saved. He is determined and theres no talking to some people. Surely stamp duty will be around £9k? 3% > £350k M21er Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted March 3, 2008 Share Posted March 3, 2008 Lloyds TSB have offered him a mortgage in principle, but they want 80% LTV on a £300,000 which is £60,000 and they want to charge an arrangement fee of £895 and he will have to stamp duty of £3,000 + Maybe he can get £60k of unsecured debt for the deposit When you write the numbers down you see how stupid the whole market has become !!! Quote Link to comment Share on other sites More sharing options...
IDN Posted March 3, 2008 Share Posted March 3, 2008 Maybe he can get £60k of unsecured debt for the deposit When you write the numbers down you see how stupid the whole market has become !!! 60k aka 20% deposit!!! surely that'd bring houses down like a tonne of bricks! i mean who the hell has 60k ready to put down as a deposit? most 20 somethings will still be paying off student debts 30 somethings might have a bit of dough but 60k - i think only a small minority would be able to stump up that kind of cash Quote Link to comment Share on other sites More sharing options...
babesagainstmachines Posted March 3, 2008 Share Posted March 3, 2008 Come on guys, aa bit of perspective... a FTB is not going to be buying a 300k house, and even in this mad housing environment, I don't think they ever were. No, they were buying the £150k 2up2dows, so the movers could buy the 300k houses. Of course, I still doubt most FTBs will have it in their heads that they need to save a deposit and fees yet. I reckon at least 50% of the FTB market has been removed by the deposit requirement alone. The FTB homes will shortly be £100k houses, and the £300k houses will be £200k. Within 2 years I reckon Quote Link to comment Share on other sites More sharing options...
IDN Posted March 3, 2008 Share Posted March 3, 2008 Come on guys, aa bit of perspective... a FTB is not going to be buying a 300k house, and even in this mad housing environment, I don't think they ever were.No, they were buying the £150k 2up2dows, so the movers could buy the 300k houses. Of course, I still doubt most FTBs will have it in their heads that they need to save a deposit and fees yet. I reckon at least 50% of the FTB market has been removed by the deposit requirement alone. The FTB homes will shortly be £100k houses, and the £300k houses will be £200k. Within 2 years I reckon good luck trying to find a home for 150k in london Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted March 3, 2008 Share Posted March 3, 2008 60k aka 20% deposit!!!surely that'd bring houses down like a tonne of bricks! i mean who the hell has 60k ready to put down as a deposit? most 20 somethings will still be paying off student debts 30 somethings might have a bit of dough but 60k - i think only a small minority would be able to stump up that kind of cash I don't think 30k is in range either... 5 maybe? Quote Link to comment Share on other sites More sharing options...
US Citizen Posted March 3, 2008 Author Share Posted March 3, 2008 (edited) Surely stamp duty will be around £9k? 3% > £350kM21er 3% thats a lot of dosh. So lets tally this up. He is a first time buyer in case you were wondering. No girlfriend or wife and no kids. Credit cards with fancy pictures on and I gave him a refernce for a loan from HFC Bank (part of HSBC) judging from the logo. So thats : ------------------------------------------------------- £300,000 purchase price ------------------------------------------------------- £60,000 DEPOSIT £ 9,000 STAMP DUTY £ 895 Arrangement fee £ 1000 SOLICITORS FEES & MOVING COSTS ------------------------------------------------------- £78,950.00 TOTAL UPFRONT COSTS ------------------------------------------------------- £ 2600 a month there after for 300 MONTHS As I havent identified him to anyone by using his name. He is opn £45,000 before tax. I cant concievably understand why anyone would lend or borrow such obscene amount of money. It give me a sicky throat just tallying up. Edited March 3, 2008 by debt-free Quote Link to comment Share on other sites More sharing options...
blackhole Posted March 3, 2008 Share Posted March 3, 2008 (edited) According to www.listentotaxman.com , £45k before tax works out at £2,685.30 per month, after tax and NI. If the numbers above are accurate, thats very close to all his wage. Something certainly doesnt add up as that would leave him broke each month just paying a mortgage. Edited March 3, 2008 by blackhole Quote Link to comment Share on other sites More sharing options...
mikthe20 Posted March 3, 2008 Share Posted March 3, 2008 (edited) When you write the numbers down you see how stupid the whole market has become !!! This is a much better way of writing some of those numbers: - Purchase price: One third of a million pounds - Actual cost after mortage payments over 25 years: TWO THIRDS OF A MILLION POUNDS Edited March 3, 2008 by mikthe20 Quote Link to comment Share on other sites More sharing options...
Nicholas Cage Posted March 3, 2008 Share Posted March 3, 2008 I looked up flat a friend used to live in, was an ex council estate 2bdrm flat with no lift and about 6 flights of stairs, busy road outside, very noisy with communal walkways and thin walls, but a short distance from Putney rail station so it sold for £315,500 two months ago. The reality of house prices is getting or got worse right at the end, it was only worth about 60K tops. Quote Link to comment Share on other sites More sharing options...
beans on toast Posted March 3, 2008 Share Posted March 3, 2008 £60,000 DEPOSIT £ 9,000 STAMP DUTY £ 895 Arrangement fee £ 1000 SOLICITORS FEES & MOVING COSTS ------------------------------------------------------- £78,950.00 TOTAL UPFRONT COSTS ------------------------------------------------------- should be 70,895 for adding up above. Houses costing upto 250K attract 1% stamp duty, it then jumps to 3% for houses above 250K. He should offer 249K. Quote Link to comment Share on other sites More sharing options...
kool4caats Posted March 3, 2008 Share Posted March 3, 2008 Just about 70%~ of his take home to mortgage?!?!Stupidity clearly has no limits Am I missing something? £2600 a month has got to be nearly all of his take-home, if he's on 45K (before tax). Quote Link to comment Share on other sites More sharing options...
REP013 Posted March 3, 2008 Share Posted March 3, 2008 Just about 70%~ of his take home to mortgage?!?!Stupidity clearly has no limits Surely it's more like 90% of his take home pay? 5.7 * salary. Quote Link to comment Share on other sites More sharing options...
red Posted March 3, 2008 Share Posted March 3, 2008 Come on guys, aa bit of perspective... a FTB is not going to be buying a 300k house, and even in this mad housing environment, I don't think they ever were.No, they were buying the £150k 2up2dows, so the movers could buy the 300k houses. Of course, I still doubt most FTBs will have it in their heads that they need to save a deposit and fees yet. I reckon at least 50% of the FTB market has been removed by the deposit requirement alone. The FTB homes will shortly be £100k houses, and the £300k houses will be £200k. Within 2 years I reckon Afraid to say I know a few of people who until recently (thankfully) were considering flats at around the 350K mark using lie-to-buy mortgages, clubbing in together, parental help, etc.). They were so convinced that the market would only ever go up (they're too young to remember the last crash) that they were prepared to commit financial suicide...glad to say, since then they've decided to wait with the rest of us. Others weren't so wise, I fear. Quote Link to comment Share on other sites More sharing options...
Moo Posted March 3, 2008 Share Posted March 3, 2008 No, they were buying the £150k 2up2dows, so the movers could buy the 300k houses. Plenty of parts of the country where £150k for a starter house is more like the post-crash target price, not the pre-crash inflated one. Quote Link to comment Share on other sites More sharing options...
jonewer Posted March 3, 2008 Share Posted March 3, 2008 Come on guys, aa bit of perspective... a FTB is not going to be buying a 300k house, and even in this mad housing environment, I don't think they ever were.No, they were buying the £150k 2up2dows, so the movers could buy the 300k houses. Of course, I still doubt most FTBs will have it in their heads that they need to save a deposit and fees yet. I reckon at least 50% of the FTB market has been removed by the deposit requirement alone. The FTB homes will shortly be £100k houses, and the £300k houses will be £200k. Within 2 years I reckon Hmmm... £150k properties in London are a bit like young, attractive, feminine lesbians. Nice to think about but I havent seen one in years! A 20% deposit sounds excessive. I'd be suprised if he cant get a 95% LTV mortgage or at worst a 90% deposit. Quote Link to comment Share on other sites More sharing options...
blackhole Posted March 3, 2008 Share Posted March 3, 2008 Surely it's more like 90% of his take home pay?5.7 * salary. Quite right you both are, just noticed "before tax" appear after my post. I'll go correct it in a mo. Quote Link to comment Share on other sites More sharing options...
lifechooser Posted March 3, 2008 Share Posted March 3, 2008 A 20% deposit sounds excessive. I'd be suprised if he cant get a 95% LTV mortgage or at worst a 90% deposit. ... at 6.3% salary? (95% ltv) Quote Link to comment Share on other sites More sharing options...
huw Posted March 3, 2008 Share Posted March 3, 2008 -------------------------------------------------------£78,950.00 TOTAL UPFRONT COSTS ------------------------------------------------------- That's more than I spent on my first London house in 1994 Quote Link to comment Share on other sites More sharing options...
jdc Posted March 3, 2008 Share Posted March 3, 2008 good luck trying to find a home for 150k in london Zone 2. 2 beds. Not a bad area. http://www.findaproperty.com/displayprop.a...p;agentid=05371 Quote Link to comment Share on other sites More sharing options...
waiting_to_exile Posted March 3, 2008 Share Posted March 3, 2008 Zone 2. 2 beds. Not a bad area.http://www.findaproperty.com/displayprop.a...p;agentid=05371 1st floor... no good to me. If I was forced to accept something like that I'd have to insist on being high enough for the jump to definitely kill me. Seriously, is London worth it? Quote Link to comment Share on other sites More sharing options...
jez123 Posted March 3, 2008 Share Posted March 3, 2008 Zone 2. 2 beds. Not a bad area.http://www.findaproperty.com/displayprop.a...p;agentid=05371 Would a lender even give a mortgage on that now? Quote Link to comment Share on other sites More sharing options...
jonewer Posted March 3, 2008 Share Posted March 3, 2008 1st floor... no good to me. If I was forced to accept something like that I'd have to insist on being high enough for the jump to definitely kill me. Seriously, is London worth it? The problem is that if you have a good job in london then its often worth living in a shiathole close to your work as the cost of commuting (to your pocket and your soul) can outweigh the benefits of the nicer place in commutersham. Living in a hole in shoreditch and walking to work can really seem more attractive than living in a victorian semi and travelling for 3 hours a day. Quote Link to comment Share on other sites More sharing options...
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