Owning your own home

Looking at the rate of return, surely the best thing to get to pay off one interest only mortgage is another interest only mortgage?

Using my dads place as an example, he paid £22,000 for a house now worth more than twice that, so he could have bought two, and sold one to pay both mortgages off.

Rent out the one you are not living in, and it covers itself.

Meh - already covered. Nothing to see here.

Sorry to anyone on here that already owns a home, but I really, really hope that this does happen. No offence.

Understand this much - it won't happen.

Sorry to anyone on here that already owns a home, but I really, really hope that this does happen. No offence.

I know people that have been waiting for 10 years for it to happen and they are worse off now than they were then. It never will.
I don't know much about this sort of stuff, but it seems to me that as long as there are more people than houses and people still want to live in London then prices will remain high. Is this not one of the first laws of economics?

Sorry to anyone on here that already owns a home, but I really, really hope that this does happen. No offence.

None taken, for anyone not on the ladder it needs to happen. But I don't think it will for that sort of property, you will always have enough city/silicon roundabout types.

I know, but I can dream of a 70pc correction. Then walking into an estate agent's office and buying one in cash. Meh.

I know people that have been waiting for 10 years for it to happen and they are worse off now than they were then. It never will.
I don't know much about this sort of stuff, but it seems to me that as long as there are more people than houses and people still want to live in London then prices will remain high. Is this not one of the first laws of economics?

I can't believe that I'm going to publically agree with a Liverpool fan, but MrC is quite correct. It will never happen because to some extent the strength of the economy relies upon the market.

Unless you win the lottery, walking into an Estate Agency and paying cash is but a pipe dream.

There will be a correction but as it has been said above certain areas will always remain high. If the money is there prices will remain at what people are willing to pay.

more like what banks are willing to lend

I know people that have been waiting for 10 years for it to happen and they are worse off now than they were then. It never will.
I don't know much about this sort of stuff, but it seems to me that as long as there are more people than houses and people still want to live in London then prices will remain high. Is this not one of the first laws of economics?

As long as there are banks willing to lend multiples higher than the long term average, and Local Housing Allowance covering the mortgages for 1/3 of the landlords in London, the big crash won't happen. However, this long slow drag down along the bottom we're currently seeing doesn't seem to be ending soon. While inflation stays at 4-5% and house price inflation is at 0-1%, that's a 3-5% drop in the real price each year. Inflation-proofing your savings, that's a different matter altogether.

it's funny that "hobo" started this thread :)

I know people that have been waiting for 10 years for it to happen and they are worse off now than they were then. It never will.
I don't know much about this sort of stuff, but it seems to me that as long as there are more people than houses and people still want to live in London then prices will remain high. Is this not one of the first laws of economics?

i also know people who bought at peak 3 years ago with 100% LTV that are now stuck with an immovable asset they paid too much money for.
i had a conversation the other day with somebody who's 2 sons both lived on the same housing development, 1 bought at peak with a girlfriend who is now an ex. he's paying the mortgage himself (just) but cannot sell as he's in 30%negative equity. the other son lives in a bigger house on the same road but paid 50k less a year ago.

^ Depends where you buy, I bought 4 years ago but the value hasn't been effected by the market, I think it may even have gone up but only slightly.

There will always be examples like that, it's the result of the ups and downs of the market.

If the poor chap who is paying a huge mortgage on his own can deal with it for the long term then he'll make out ok, if what has happened in the past with hosue prices holds true.

I looked into taking out an ISA recently, stuffing away a few thousand, but once I worked out that the return would be the equivalent of paying for a biggish shopping trip at Sainsbury's I thought fuck it.

I also had a long chat with a senior HSBC Financial Advisor about investments and told him I wasn't really happy about my money being invested in companies that manufacture arms for example. Good on him for being honest but he said there was no way of managing this through their investment schemes.

I agree, Interest only mortgages are a fools game in the long run, but can be good in the short term.

I broke up with my ex 2 years ago, and moved out of the flat we shared for almost 4 years, I also no longer have any ties to the house/area I grew up in.... So by the start of this year i was tiered of not having anywhere I could call home, and just doing the whole flatshare thing, which I pretty much just saw as somewhere to sleep at night... This, and the fact that it was/is a strong buyers market, is why at the begging of this year I decided to buy my own flat.... I did a lot of internet hunting, rather than lots of viewings, and put in a low-ball offer on the first place i looked at, I was lucky as it was accepted, and moved in to my new place in April.

Finacially, I would have struggled to do it on a capital repayment mortgage.
I managed to secure a good three year fixed rate, and my repayments worked out £250 less on a on an intrest only mortgage. I could have just about afforded the extra £250 a month, but it would have been tight, and I would have been left with no cash for any kind of emergencies. So I took the interest only mortgage, and try to save the extra £250 a month.

My view is that in three years time, when my fixed rate runs out, I will re-mortgage onto a capital repayment mortgage, that I will be able to afford more easily as I will (hopefully) be earning a more substantial wage, and if all goes to plan, I will also have some savings to help me pay off a (small) chunk of the mortgage, but will have those savings at my disposal until then, incase of any emegencies.

I now live somewhere that I am very happy to call home. I can also call it my own home. And most importantly, I can afford it.

And the best thing is, I live on my own, so I can walk around butt-naked as much as I want. Or watch American Chopper without feeling ashamed of myself. (These two activites do not happen at the same time though, that would be weird)

I'm just under 2 years into this gameplan and still confident I did the right thing. I reasoned I should use all the savings I could gather to maximise the deposit then give myself the 3 years low monthlies to re-build a savings buffer. So when I switch to a repayment mortgage in a year and a bit I should have enough to cover those nasty surprises that home ownership will throw up occasionally*.

*(Not including the ones caused by walking around butt-naked)

Buy doer-up period property in zones 2 & 3 in an area which has good transport links but isn't already heaving with delis and you'll be alreet. Anything else, forget it. Word is bond.

but a bad scenario would be if you bought with a 95-100% LTV and your 150k property(for example) is now valued at 125K your deal comes to an end but to get another IO mortgage you need to find 25k just to remortgage again at 100% and have no equity, and to get a good deal you need the other 25% and until prices rise again you have no equity to play with but have spent £0000's
this is not some outlandish scenario, it happens.

^ It can happen if you were stupid enough to buy in Wales.

I also had a long chat with a senior HSBC Financial Advisor about investments and told him I wasn't really happy about my money being invested in companies that manufacture arms for example. Good on him for being honest but he said there was no way of managing this through their investment schemes.

Might be worth checking out the Co-op:
http://www.goodwithmoney.co.uk/ethical-insurance-and-investments/

Might be worth checking out the Co-op:
http://www.goodwithmoney.co.uk/ethical-insurance-and-investments/

Is there one that guarantees that it only invests in arms and other unethical things?

It would probably make more money.

Barclays. Alternatively, I know a bloke on the Edgware Road who will happily invest it in arms on your behalf.

What does it mean when it says that it's being sold without the right to extend the lease? Does it mean you can only live there for a few years, then you have to move out? Why so cheap?

http://www.findaproperty.com/for-sale/property-10545676

You'll need to negotiate for a new lease with the landlord- and they might want to demolish the entire block and build something else.

If they won't grant you a lease, then you have to go.

No way you'd get a mortgage on that, btw.

Plus, they could charge you £400,000 for the new lease.

So if they can set any price they want for the lease, why would anyone buy that?