Friday, August 20, 2010

Your Country Needs You – Join the Housing Pyramid Scheme Now!

Mortgage repayments halved for first-time buyers

Mortgage repayments for first-time buyers have nearly halved during the past three years due to record low interest rates and house price falls. A typical first-time buyer now spends just 28 per cent of their pay on monthly mortgage repayments, down from a peak of 50 per cent in June 2007, according to high street bank Halifax

Posted by need-a-crash @ 02:11 PM (2981 views)
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11 thoughts on “Your Country Needs You – Join the Housing Pyramid Scheme Now!

  • Master the plane the plane, master the plane the plane

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  • I think it is time we implemented margin calls on mortgages. When the equity falls below a certain amount, say 25%, you are given two choices, you either feed more money in to maintain the margin or the bank closes you out, hands you a cardboard box and tells you to fvck off out of their house.

    People need to understand that saving a few hundred a month on a asset that is depreciating by a few grand isn’t sane, the above would sort that out for them right and quick, plus it would prevent banks needing recapitalised every five minutes.

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  • A nice big fat juicy worm.

    Codswallop!!

    2. mrflibble said…’I think it is time we implemented margin calls on mortgages.’

    Yes, on all mortgages and the banks should ‘enforce’ it, not just when it suits them to.

    That will keep the parties in check.

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  • mark wadsworth says:

    Mr F, good idea. Only that’s not “two choices”, that’s “a choice”.

    What the Home-Owner-Ists are doing here is cunningly lowering the ladder again slightly to get a few more suckers on it, before they pull it up again (once the next generation of suckers is ‘on the ladder’ then they become Home-Owner-Ists themselves, and all they care about is “building up equity” the easy way).

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  • “People buying their first home put down an average deposit of £30,380 during the second quarter of the year, the equivalent of 22 per cent of their home’s value.”

    So the average FTB house value is circa £138k.

    £138k minus £30k deposit means the average FTB loan is for £108k. OK…

    “A typical first-time buyer now spends just 28 per cent of their pay on monthly mortgage repayments, down from a peak of 50 per cent in June 2007, according to high street bank Halifax”……

    Lets say a FTB gets a good rate on this at 4%, meaning the monthly repayments are £565.

    If this is 28% of their salary, the average FTB salary equates to £24,214.

    I find this very hard to believe and even if it is true, how on earth does someone earning that amount save up £30k in any reasonable amount of time?? BOMAD??

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  • mark wadsworth says:

    @ Hash Browne – many FTBs will be young couples, where both are working. Try than again with salaries 2 x £24,000. Also, your guess is as good as mine whether that means 28% of gross salary or 28% of net salary after tax.

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  • tenyearstogetmymoneyback says:

    The key question is whether this includes capital repayments. Back in the “good old days of repayment or endowment”
    mortgages they had to. The only alternative was a bridging loan at a punative interest rate as no one could be expected to afford
    two mortages.

    Back to the present using the figures above you need to add on an average of £360 a month capital repayments to pay off the mortage.
    |I am sure you could find some kind of calculator which shows you don’t have to pay as much as you start as the interest in year 25 will
    be about £100 but you get the point. Using a finger in the air calcualtion £180 a month might do.

    Having bought my first house with a 92% mortgage I have to disagree with Mrflibble. However, as indicated above there was none of
    this interest only nonsense back then. Each year I had the house I had a smaller mortgage (and smaller savings). There was also
    none of the current remortgaging nonsense. Despite having £30K equity at the end of the Eighties boom, when I wanted a new TV and video I had to find a better paid job !

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  • This is fab news, well for me at least.

    Keep on enjoying your oh so soggy summer.

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  • What happened to that woman a couple of years back from the nationwide… Fionualalalala..lol…believedanewlabourhype… How much is/was she on a year? Hope she is happy! As for mortgages halved, even for the most discerning coke head. Guys the party is over!

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  • One measure of affordability in the US is that mortgage or rent payments should not be more than 28% of your income. I can’t remember if that’s gross or net income, but in any event, if what’s being reported here is comparable, then it means that housing has only just managed to become “affordable” — if, that is, you have a big enough deposit, interest rates continue to stay low, you can remortgage after your current deal finishes, etc., etc., etc.

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  • @MW

    But if there were 2 of them sharing the mortgage 50/50 and both paying 28% of their salary, it would suggest 2 people on £12k each.

    @smugdog

    This is article talks about FTBs paying less for their mortgage. How do you benefit from that exactly?

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