Tuesday, December 23, 2008

Another lamb to the slaughter

How the credit crunch saved me £50k

I was shattered when my offer on a 2-bedroom Ladbroke Grove flat was rejected. Now, a year later, the property has sold for £50k less than I offered. It is clearly time to start ferreting for a property again. Last year I had no problem getting a mortgage for £250,000, despite my low income of £23,000. Now I have a deposit of £60k, and am looking at properties around £300,000. But on my income I can only borrow £130,000,which leaves a big deficit. I have cajoled my father into acting as a guarantor. My mortgage advisor recommends an interest only fixed-rate deal, with monthly payments of £1,000. My take-home pay is £1,463 but if I take in a lodger at £600 a month, my payments will be less than I am paying in rent. I can change to capital repayment when my situation changes - God willing!

Posted by little professor @ 12:41 PM (2774 views)
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19 thoughts on “Another lamb to the slaughter

  • Wow that Cliff bloke at Alexander Hall sounds really nice ;p I wonder if she is exclusively using Foxtons too?

    Daddy, Daddy the financial community is only willing to lend me 130K on a down payment of 60K, will you lend me another 110? Come on, it’s only about six year’s gross salary at my current income.

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  • “I’ve been renting in Notting hill for the past 12 months, which feels like frittering money away”. Right…. how can she say this and then in the next breath talk about the place she was willing to buy previously being sold for 50k less than she was offering? All in all its just a stupid article.

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  • seems like she is a budding journalist too…
    http://www.dailymail.co.uk/femail/article-1020673/Are-smoothies-twice-nice-They-contain-day-fruit-needs-new-generation-superdrinks-best.html
    ,a href=”http://www.thisislondon.co.uk/home/show-23354826-details/Dirty+Dancing+-+The+Classic+Story+On+Stage/showReview.do?reviewId=23417034″>http://www.thisislondon.co.uk/home/show-23354826-details/Dirty+Dancing+-+The+Classic+Story+On+Stage/showReview.do?reviewId=23417034
    I think Daddy (or Mummy) may well be someone who works at Associated News.

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  • little professor says:

    Nice find, 51ck. Burnt through £40k of her inheritance in just 8 months. Great stuff.

    “Despite such a sizeable deposit it’s a bit baffling that I can’t get a mortgage close to the amount that I’d like. [£300,000 on a £23,000 salary.] I am now reduced to renting, which feels like a huge waste of money.”

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  • oh dear, a feeble attempt to rally people into buying, with the old “prices slashed” trick for overpriced rubbish that no one can afford to buy. They must have made it up. There is simply no justification for current prices. Prices are tumbling and have a long way to go.

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  • wow – she can’t even get a 10x mortgage in this climate. what are the banks thinking? when will they start lending at proper levels again?

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  • A side effect of the market is the reallocation of money from the stupid to the not so stupid.

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  • “The hypothetical rent from the second bedroom helped secure the loan and there was no nitpicking over my low income of £23,000” – no reputable mortgage broker or IFA could possibly get involved in setting up a £250K mtge for this girl (even with a guarantor) – a formal complaint in the making if ever I saw one based upon lack of overall affordability.

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  • Four hundred pounds of your wages left without any other bill paid? Errr…….. have you forgot about……Council tax? gas electric water? service charges? no lodger yet or guranteed immediately? And your parents going gurantor? an interest only mortgage? I’ll be straight with you………. your mad. you cannot afford it. move somewhere cheaper or not at all……. Scooola x

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  • Holy moly, how did she get approved for a £250k mortgage despite an income of £23k?

    Any idea which irresponsible lender it was?

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  • @drewster – I dont know the lender but as you point out the whole thing is irresponsible – hardly surprising the residential property market is so skewed with this sort of cr*p taking place on a wide scale

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  • These people just won’t give up, not surprising that this hpc took so long to materialise.

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  • What we need to bear in mind is that the younger generation have only ever seen things getting better, and houses have always been a good investment. Even now they can’t get to grips with the idea that we have already peaked as a country and are now on the downward slope. Unless she is just particularly thick…………

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  • I would suspect ‘particularly thick’ cannot be ruled out here

    I find quite often that people who have been fed with a silver spoon are often spectacularly stupid

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  • I don’t know, growing up in London I still remember Ladbroke Grove as a place to avoid for fear of taking the wrong turn into a side road and getting mugged, wasn’t it the film Notting Hill that upped prices in this still shabby, @rse end of London ?

    Don’t care how much it has changed it’s still Ladbroke Grove.

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  • ….and I’m sure she’ll find a nice, quiet lodger in steady employment who’ll be paying upfront every month for the next several years – somebody who won’t be looking for a better deal when the rental market sinks along with employment…..

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  • This is why we should have 90% inheritance tax!

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