Monday, August 20, 2007

It costs money to buy a house

Young homebuyers pile up debt

CCCS chairman Malcolm Hurlston said: "There is a danger in young people getting on the housing ladder before they are ready financially." "Before taking out a mortgage the under 25s should make sure they can still afford to live and not rely on credit to plug the gaps."

Posted by night @ 09:09 AM (950 views)
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7 thoughts on “It costs money to buy a house

  • george monsoon says:

    This article works under the assumption that its only “immature” under 25’s that are foolhardy with their finances.
    I think this probably affects all adults on most of the lower end of the IQ parabola.

    The market seems to be shrugging off the credit crunch today,… or are they licking the wooden spoon before the bowl is cleaned?

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  • C'mon Correction says:

    I agree George. But it’s not just the people with lower IQ’s who aren’t very good with their finances. Many people I know can’t even put together a simple budget for themselves and calculate interest etc properly, and they are professionally qualified.

    A good example is most people take for fact that renting is dead money and somehow mortgage interest isn’t? Many of my friends bought a house 4-5 years ago, have earned more than me but have a worse financial position; this is fact because we have discussed it. It would seem that the last 2 years their cost of living is so much greater than mine because they are home owners and don’t rent. And their house value has risen much less than they were led to believe.

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  • Having just past my 25th birthday, I can say, I have now realised that using credit to plug the gap puts me in debt. I’d of never worked that one out at 24!!!!!!!

    This report truely shows the new thoughts that I woke up with on my birthday.

    Surely couples that are looking at having a baby this should apply too. Now that’s where un-expected expense comes. And don’t expect tax credits to help, £600 p/m nursery fee’s, £50 p/m tax credits, big help, thanks gordon.

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  • george monsoon says:

    The problem is our credit card culture. The majority of the public build up vast amounts of debt on credit cards and almost believe that the money being spent is actually their own.

    Credit cards are evil and if I were running the country, I would restrict their use to emergencies only.
    If we had the same outlook as the rest of Europe, i.e. buy everything on a debit card / cash
    the country would not be in anything like the amount of trouble it is now.

    C’mon correction, do you use credit cards?

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  • Retiredbanker` says:

    My daughter and her husband moved house about 18 months ago, and during an after dinner conversation with them yesterday, I was
    astonished to learn that when they were applying for an increased mortgage, the building society was prepared to lend them just over
    £500k -“no problem”.
    Fortunately they are a very level-headed couple and only borrowed £160k, and have since reduced this to £110k by selling a btl
    investment property.
    Truly all prudence regarding lending criteria has been thrown out of the window.

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  • Don’t take my credit card away please GEORGE. I always pay my card off in full each month and get 1% cash back – adds up over the year as I buy everything with it. Also, in common with C’MON, I have had to sit down and explain to many friends (some academic) why paying £600 p/m for a rural 3-bed country cottage is better for us than the equivalent interest-only mortgage on a 2-up 2-down terrace in the rougher parts of the local area. It’s as if they haven’t bothered to question the out-of-date adage that “renting is dead money”.

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  • Bubbles. . . . says:

    Dont use them anymore. Used too and racked up £20,000 of debt which cost me the deposit for my first house 4 years ago..They do have to be paid Back!.Other people had said to me just keep your credit cards and buy a house. yep would have made more than 20K but would have had to sell the house now.. Or would have got into trouble anyway (this was before IVA’s). I still believed in those days there would be a correction..How wrong. Still ive got 25K now as a deposit again after saving 2K a month.. But still um and errr about buying..Hopefully interest rate rise in sept and there will be bargains at Xmas..Estate agents now saying people are starting to take serious offers. IM a serious buyer if the price is right,and that should give me the power I deserve. But instead im sure there will be other people imagined up offering 1000’s more than my offer! Just like the last time when I was going to buy..Hope it will go pop soon…Am getting 6.0% anyway in an ISA and still saving..A dieing breed i guess from this culture of spend now worry later….Parents will help me out ERA..

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