First Mortage Bill In

[Tummybanana]

As regards the future - if the wife gets pregnant or dies I'd pretty much be screwed renting as well, so that's not particularly helpful. As a matter of fact, in terms of rental v mortgage, we're about 300 a month up on the deal. And we've both got helpful parents in the area who'll make sure we wouldn't end up in a B&B

80,000 of the loan is fixed and will NEVER go above 3.5%. It's the much maligned Ownhome scheme; 0% for five years, 1.75% for five years, 3.5% for the remainder of the mortgage. The only snag is that we need to pay the share off in 5% chunks, and have a valuation survey done. Of course, if house prices tank 50%, then we essentially pay off a 10K loan for 5K; so that'll be nice. Especially as Ownhome doesn't take into account savings.

It's the 103,000 that, I grant you, could be problematic. If Interest rates get above, say, 8% then we'll probably bail at 10% below market and put the capital into a savings account. However, that's unlikely to happen in the next three years, which is when we're essentially locked in (to stop 'flippers' taking advantage). Plus, it's not the kind of thing that's likely to happen overnight, so we'll be ready to market at 6%. IMHO, with the Bank of England setting Interest Rates, they're NOT going to go above 7-8% for a long time. What's needed isn't people who'll stick their money in bank accounts for a fixed return, what's needed is people who are prepared to invest in businesses, in projects, who'll make their money work for them. Of course, one could argue that's exactly what the banks do with depositors' money, but when a company's making a 3% profit margin, and a fixed bond is 6%, it's hard to see the incentive for larger investors to take the steps needed for small businesses in this country.

As regards the figures, wife's salary will double (okay, increase by 2/3 after tax) when she finishes her sponsored degree. Currently half the salary goes on her course, which is annoying. The more the country goes to hell in a handbasket, the more secure her job will be, ironically, as a Social Worker.

Youngest will stop needing 9-6 childcare, and just after school, which will save us about 3K a year. There are clubs in the school holidays in our town which take young children, so you're right; for about 12 weeks of the year we'll still need to find care, but both our sets of parents will be retired, and have said they are more than happy to help out.

Fingers crossed I'll be on a little bit more, too.

Plus, we've still got about 20K sat in the bank in ISAs to fall back on, if needed.

[Bloo Loo]

Such a tragedy to such a nice ordinary hard working family.

Shared ownership. Its a crime.

This from the Ownhome scheme FAQ

After 25 years (or the term of your mortgage if sooner) you will have to repay the loan, calculated on the value of your home at the time of repayment.

Depending on the housing market over the coming 25 years, this amount could be less, but could also be substantially more, than we originally lent you. You will receive examples of how much you could end up paying, and you will be sent annual statements.

In 25 years, its LIKELY to be the substantially more scenario.

Edited December 30, 2008 by Bloo Loo

[IDN]

As regards the future -

correct me if i am wrong but are you gloating?

i am sure you know the situation you(we) are in can change very quickly and i wouldnt use the current IR rates as a sign of things to come.

[RufflesTheGuineaPig]

At some point, borrowers need to realise that it is about debt repayment rather than debt servicing .......

You moron, you've got it all wrong.

Debt is wealth.

As long as you can negotiate affordable monthly payents, it doesn't matter if you pay it off or not.

Eventually you'll win the lottery or win x-factor or marry a millionaire or something and pay it all off anyway.

[Tummybanana]

At some point, borrowers need to realise that it is about debt repayment rather than debt servicing .......

Where does renting come into that equation? Surely that's the most servicingist property payment plan there is?

House currently worth 200,000 (as that's wot I paid for it)

At peak, it was marketed at 250,000.

As we're only paying off the 100,000 odd, we're paying 300 less, per month, to mortgage rather than rent in a 4 bed detached, and pay off equity. If I'm working it out right - and I'm prepared to be corrected - it's nice easy math, because 1% is about £100. So, until interest rates go up by another 3%, we're still better off, and we're getting a few bricks out of it, too.

If house prices drop by another 25%, then the 80,000 we owe becomes 60,000; as it's based on % share of the most recent property value. I WANT prices to crash. I'm begging them to crash more, because, as said earlier, we can wait till the bottom (as much as anyone can call the bottom) revalue, then dig into our coffers and pay off 20,000 of the Ownhome debt for 15,000. However, because the interest is only going to go up an average of 0.6% over the next ten years for that share, we're best off keeping it in our 6% fixed bond where it is, rather than paying it off.

I did put this on to test the waters, not as a gloating thing, but to see if any new arguments surfaced about whether this was the best thing to be doing. I'm still happy that we're doing the right thing.

[Tummybanana]

Such a tragedy to such a nice ordinary hard working family.

Shared ownership. Its a crime.

This from the Ownhome scheme FAQ

After 25 years (or the term of your mortgage if sooner) you will have to repay the loan, calculated on the value of your home at the time of repayment.

Depending on the housing market over the coming 25 years, this amount could be less, but could also be substantially more, than we originally lent you. You will receive examples of how much you could end up paying, and you will be sent annual statements.

In 25 years, its LIKELY to be the substantially more scenario.

Mortage company in charging interest shocker.

1.75% for five years, 3.5% until the end of the repayment; can repay back anytime after the first five years in 5% chunks.

Well, yeah, I'll have paid more, but I'll have a house at the end of it, and I'm never going to be in a position where I can buy a house outright for cash.

Are you planning on renting till you die?

[Bloo Loo]

They also say you should have a repayment plan in place which they will have discussed with you.

I hope they did.

[redgenieuk]

Mortage company in charging interest shocker.

1.75% for five years, 3.5% until the end of the repayment; can repay back anytime after the first five years in 5% chunks.

Well, yeah, I'll have paid more, but I'll have a house at the end of it, and I'm never going to be in a position where I can buy a house outright for cash.

Are you planning on renting till you die?

No. But I'll actually pay back my mortgage, ASAP.

For your sake lets hope your Mrs gets a job!

[redgenieuk]

They also say you should have a repayment plan in place which they will have discussed with you.

I hope they did.

Yeah, I am sure they did.

Right after they discussed www.getyourfakepayslipsandP45here.com

[Tummybanana]

They also say you should have a repayment plan in place which they will have discussed with you.

I hope they did.

You realise that's just generic mortgage bunko, like "the value of investments can go down as well as up"? I'm not sure if your handwringing concern is genuine or not, but yes, we've got a plan. Besides, in 25 years we'll have paid off the rest of the mortgage, so we'll either sell up and give them their remaining share - after all, we won't have two kids living in the house then, or we'll cash in our other investments. Hey! Maybe we'll even Withdraw some of the Mortgage Equity in our house! Or get our robot slaves to pay it off. Christ, do YOU know what you're going to be doing in 25 years, financially or otherwise?

[redgenieuk]

Where does renting come into that equation? Surely that's the most servicingist property payment plan there is?

House currently worth 200,000 (as that's wot I paid for it)

At peak, it was marketed at 250,000.

As we're only paying off the 100,000 odd, we're paying 300 less, per month, to mortgage rather than rent in a 4 bed detached, and pay off equity. If I'm working it out right - and I'm prepared to be corrected - it's nice easy math, because 1% is about £100. So, until interest rates go up by another 3%, we're still better off, and we're getting a few bricks out of it, too.

If house prices drop by another 25%, then the 80,000 we owe becomes 60,000; as it's based on % share of the most recent property value. I WANT prices to crash. I'm begging them to crash more, because, as said earlier, we can wait till the bottom (as much as anyone can call the bottom) revalue, then dig into our coffers and pay off 20,000 of the Ownhome debt for 15,000. However, because the interest is only going to go up an average of 0.6% over the next ten years for that share, we're best off keeping it in our 6% fixed bond where it is, rather than paying it off.

I did put this on to test the waters, not as a gloating thing, but to see if any new arguments surfaced about whether this was the best thing to be doing. I'm still happy that we're doing the right thing.

It comes into it because:

1) if IR's were 7% you wouldn't be paying less on the mortgage and

2) You'll not get a mortgage to repay when your over 65(?).

3) You won't be very happy with your desision when your house is £125K and your mortgage could have been £250 a month and you could have repaid the capital.

[Bloo Loo]

Mortage company in charging interest shocker.

1.75% for five years, 3.5% until the end of the repayment; can repay back anytime after the first five years in 5% chunks.

Well, yeah, I'll have paid more, but I'll have a house at the end of it, and I'm never going to be in a position where I can buy a house outright for cash.

Are you planning on renting till you die?

just pointing out the potential costs, those 5% chunks PLUS legal fees and valuations EACH time, as effectively you will have a new agreement.

Good luck to you.

Im in a rented 260K house for 800, houses I want are coming within range and I will wait.

[redgenieuk]

You realise that's just generic mortgage bunko, like "the value of investments can go down as well as up"? I'm not sure if your handwringing concern is genuine or not, but yes, we've got a plan. Besides, in 25 years we'll have paid off the rest of the mortgage, so we'll either sell up and give them their remaining share - after all, we won't have two kids living in the house then, or we'll cash in our other investments. Hey! Maybe we'll even Withdraw some of the Mortgage Equity in our house! Or get our robot slaves to pay it off. Christ, do YOU know what you're going to be doing in 25 years, financially or otherwise?

1) "the value of investments can go down as well as up",.

2) your IFA saw you coming. Investments as well as a mortage. A rainy day fund and then pay down your debt. FFS. Some people.

[The XYY Man]

As regards the future - if the wife gets pregnant or dies I'd pretty much be screwed renting as well, so that's not particularly helpful. As a matter of fact, in terms of rental v mortgage, we're about 300 a month up on the deal. And we've both got helpful parents in the area who'll make sure we wouldn't end up in a B&B

80,000 of the loan is fixed and will NEVER go above 3.5%. It's the much maligned Ownhome scheme; 0% for five years, 1.75% for five years, 3.5% for the remainder of the mortgage. The only snag is that we need to pay the share off in 5% chunks, and have a valuation survey done. Of course, if house prices tank 50%, then we essentially pay off a 10K loan for 5K; so that'll be nice. Especially as Ownhome doesn't take into account savings.

It's the 103,000 that, I grant you, could be problematic. If Interest rates get above, say, 8% then we'll probably bail at 10% below market and put the capital into a savings account. However, that's unlikely to happen in the next three years, which is when we're essentially locked in (to stop 'flippers' taking advantage). Plus, it's not the kind of thing that's likely to happen overnight, so we'll be ready to market at 6%. IMHO, with the Bank of England setting Interest Rates, they're NOT going to go above 7-8% for a long time. What's needed isn't people who'll stick their money in bank accounts for a fixed return, what's needed is people who are prepared to invest in businesses, in projects, who'll make their money work for them. Of course, one could argue that's exactly what the banks do with depositors' money, but when a company's making a 3% profit margin, and a fixed bond is 6%, it's hard to see the incentive for larger investors to take the steps needed for small businesses in this country.

As regards the figures, wife's salary will double (okay, increase by 2/3 after tax) when she finishes her sponsored degree. Currently half the salary goes on her course, which is annoying. The more the country goes to hell in a handbasket, the more secure her job will be, ironically, as a Social Worker.

Youngest will stop needing 9-6 childcare, and just after school, which will save us about 3K a year. There are clubs in the school holidays in our town which take young children, so you're right; for about 12 weeks of the year we'll still need to find care, but both our sets of parents will be retired, and have said they are more than happy to help out.

Fingers crossed I'll be on a little bit more, too.

Plus, we've still got about 20K sat in the bank in ISAs to fall back on, if needed.

Mods - please check this poster's details on the hpc database.

His joining date says Jan 2008, but it is obvious he has just woken up from a coma he suffered in 2004...

XYY

[Bloo Loo]

You realise that's just generic mortgage bunko, like "the value of investments can go down as well as up"? I'm not sure if your handwringing concern is genuine or not, but yes, we've got a plan. Besides, in 25 years we'll have paid off the rest of the mortgage, so we'll either sell up and give them their remaining share - after all, we won't have two kids living in the house then, or we'll cash in our other investments. Hey! Maybe we'll even Withdraw some of the Mortgage Equity in our house! Or get our robot slaves to pay it off. Christ, do YOU know what you're going to be doing in 25 years, financially or otherwise?

no, Its a silly scheme to support the housing market with taxpayers money. If YOU feel you can benefit then thats absolutely fine.

They, however, expect to profit from the scheme as house prices are very likely to be much higher in 25 years.

And Ill be dead in 25.

[Tummybanana]

No. But I'll actually pay back my mortgage, ASAP.

For your sake lets hope your Mrs gets a job!

She's got it. Half her salary effectively goes on her course. She just needs to finish her degree - which is all straight firsts so far - before she's fully qualified. There is a possibility that she could fail her degree, I suppose, or that she ends up in an Iron Lung, but in that event she'd still be able to work, just at a reduced salary until she passed her retake. Not in an Iron Lung, though, that WOULD complicate things - although my work does come with free health insurance for spouses.

I take your point about paying debt, but at 0% interest there is literally NO rhyme or reason for paying a penny off in the first five years. Much better to take the cash and put it somewhere else earning interest. I did a similar thing with my student loan when they were at a stupid interest rate - about 2%, I recall.

For a start, minimum payment would be 4K, plus valuation fee, so it doesn't behoove to do it particularly regularly.

[redgenieuk]

Mods - please check this poster's details on the hpc database.

His joining date says Jan 2008, but it is obvious he has just woken up from a coma he suffered in 2004...

XYY

Sorry, we don't keep details of HPC posters Comas on the database.

[BXLONDONMAN]

12% that'll hurt.

ouch.

i have seen interst rates that high and above from the banks,,grown men start to cry, from bull-shit to tears in no time, if interst rates hit even 10%,,ther will be blood on the streets,in every city..

differn't world now people think 10% interst rates will never come back... no bet's after the next election..

[Tummybanana]

no, Its a silly scheme to support the housing market with taxpayers money. If YOU feel you can benefit then thats absolutely fine.

They, however, expect to profit from the scheme as house prices are very likely to be much higher in 25 years.

And Ill be dead in 25.

I'm trying to tone down the sarcasm, but of course banks seek to profit. That's what they do. House Prices will be higher in 25 years' time; however, I fully intend to have paid it off by then. Plus, I get a house at the end of it, which is higher in value than not having a house. Yes, there's the opportunity cost of not investing in gold, or meat futures, or durex, but I also get somewhere to live in the meantime - bearer bonds just don't make very good bivouacs.

At the end of the day, it's a game of chicken. Some sold in 2004 to STR; some buy now to OO. RICS stats (which I don't believe for a second) say 25% from peak by the end of 2009. I've got my 25%. I'm happy. I'm 31. I've got a house.

Oh, and AFAIK, Places for People doesn't get any Government Funding. Or at least, my mortage with them doesn't. They get all their money from renting out social housing. There might be a tax break in it for them, I suppose, but I couldn't find it in here.

http://www.placesforpeople.co.uk/resources...ccounts2008.pdf

[Tummybanana]

just pointing out the potential costs, those 5% chunks PLUS legal fees and valuations EACH time, as effectively you will have a new agreement.

Good luck to you.

Im in a rented 260K house for 800, houses I want are coming within range and I will wait.

It's not a new agreement; that's made pretty clear. Standard mortgage valuation (£200) plus 5% of remaining share.

And without being facetious. . .A 260K house? How do you know that's what it's worth? Did someone come up to the landlord today and offer that much for it?

[Bloo Loo]

Its an Association of some kind and they are restructuring as we speak:

http://www.insidehousing.co.uk/story.aspx?storycode=6501259

Housing association Places for People has announced that 100 staff could lose their jobs in a planned restructuring

Around 2,600 staff across the country were informed yesterday of the expected job cuts alongside a three-month consultation on the move.

Chief executive David Cowans said the association wanted to replace its regional group structure with a series of project teams tasked with working on major developments

Places for People is also shifting its emphasis to design, construction and management of ‘whole place’ projects such as health and education facilities, as well as just house building, Mr Cowans said.

The association has a land bank earmarked for building 20,000 homes.

Mr Cowans said Places for People was striving to be more ‘cost effective’. A spokesman said that the move was planned and not a response to financial pressure.

‘We are reshaping our business to enhance our skills in the exemplary design and construction of these new places, and in order to further build the capacity to deliver excellent customer service,’ Mr Cowans said.

Lets hope they are stable enough to continue.

Honestly, I am not looking to put you or your decision down. It has nothing to do with me whatsoever.

[laurejon]

Anyone who thinks todays interest rates are normal, and are unlikely to increase by any significant margin over the next ten years is truly deluding themselves.

Here's the scoop.

Savers dont lend money out for returns of 1% less Gordon Browns taxes, so they find other areas to invest in.

As a result of Savers no saving in banks, the Government has to provide the liquidity, however that liquidity is not endless, we are already pushing the bounds of what is acceptable in terms of bank lendinga and bank capitalisation hence the problems we see today.

Forget the idea that banks dont lend to one another because they dont trust each other, that is a myth peddaled by a desperate government. The banks are not lending simply because they know the problems we are seeing today are only the tip of the iceburg. We have only just in the last four weeks began to see unemployment, and that currently at 2m will grow to 4m by end 2009.

David Cameron today cited the Governments dropping of economic bombs on the UK public and it is an analogy that is quite correct. In borrowing more money, in order that the Public borrow more money is simply excacerbating the problem, its a bit like picking scab, it will never heal.

The only solution is mass defaults of debt, more banks left to go under, a serious hike in interest rates to stop people borrowing, and the removal of the current Government who are clearly set on a course to send this country over the edge with unsustainable borrowing.

The new borrowing by Labour in interest payments alone is more than we spend on National Defence, and nearly as much as we spend on the NHS, now that is clearly crazy.

[Tummybanana]

David Cameron today cited the Governments dropping of economic bombs on the UK public and it is an analogy that is quite correct. In borrowing more money, in order that the Public borrow more money is simply excacerbating the problem, its a bit like picking scab, it will never heal.

I loved that Cameron story. "David Cameron says that the Conservatives should come up with something which makes people feel better, although he's not exactly sure what it is yet."

As I said, though, we're not nailed to the property; if interest rates rise, we'll bail like a man who wakes up to find himself in Anne Widdecombe's bed, and either go to rental or - if things are dire there, to parents. I'd hope that we'll get enough notice, rather than the MPC announcing a 10% rise in interest rates next Tuesday.

[BXLONDONMAN]

Anyone who thinks todays interest rates are normal, and are unlikely to increase by any significant margin over the next ten years is truly deluding themselves.

Here's the scoop.

Savers dont lend money out for returns of 1% less Gordon Browns taxes, so they find other areas to invest in.

As a result of Savers no saving in banks, the Government has to provide the liquidity, however that liquidity is not endless, we are already pushing the bounds of what is acceptable in terms of bank lendinga and bank capitalisation hence the problems we see today.

Forget the idea that banks dont lend to one another because they dont trust each other, that is a myth peddaled by a desperate government. The banks are not lending simply because they know the problems we are seeing today are only the tip of the iceburg. We have only just in the last four weeks began to see unemployment, and that currently at 2m will grow to 4m by end 2009.

David Cameron today cited the Governments dropping of economic bombs on the UK public and it is an analogy that is quite correct. In borrowing more money, in order that the Public borrow more money is simply excacerbating the problem, its a bit like picking scab, it will never heal.

The only solution is mass defaults of debt, more banks left to go under, a serious hike in interest rates to stop people borrowing, and the removal of the current Government who are clearly set on a course to send this country over the edge with unsustainable borrowing.

The new borrowing by Labour in interest payments alone is more than we spend on National Defence, and nearly as much as we spend on the NHS, now that is clearly crazy.

low interst rates in the UK and USA are not going to last beyond next oct 2009..depending in the uk when the next election will be..enjoy the low rates while they last...they won't be around forever..

[Bloo Loo]

I loved that Cameron story. "David Cameron says that the Conservatives should come up with something which makes people feel better, although he's not exactly sure what it is yet."

As I said, though, we're not nailed to the property; if interest rates rise, we'll bail like a man who wakes up to find himself in Anne Widdecombe's bed, and either go to rental or - if things are dire there, to parents. I'd hope that we'll get enough notice, rather than the MPC announcing a 10% rise in interest rates next Tuesday.

At the end of the day, this scheme is designed by government to encourage keyworkers and FTBs to take out more than 6 times salary for the first step.

My taxes going through a housing association to prop up prices.