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Why FTB should Resisit buying now and Save instead! explained
Comments
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If I was betting man I would say that panpamonia is a missionary from HPC, I think they are starting to worry slightly that the planks that may form the market bottom may soon be laid. I still think that the end of the stamp duty duty concession may provide a catalyst for a gradual build up (although I think they have put it back to Sept)
house prices are still overvalued and lending is still tighter than tight. how is the bottom forming with almost nothing getting better its only getting worse.0 -
THE TITLE OF YOUR POST
"Why FTB should Resisit buying now and Save instead! explained!"
you say lets take 10% as a example you are a clown, a fully fledged clown!!!!!!!!!!!
THERES NO MENTION OF PEOPLE WITH 10% DEPOSITS;)
Not all first time buyers have 10% you think they do, most ftb who are looking to buy have been saving for years.
Im looking to buy in kingsbury b78 postcode look at the drops there, there aint no 20% drops, there might be in bad areas, but who wants to live there?
Now if you was a fist time buyer and you wanted to buy a house for 130,000 pound and you wanted to secure the 4.59% deal you would need 32,500 pound which is the 25% deposit.
which means they would only be borrowing 97500
They get the low rate because there is a bigger buffer (25% deposit) before the house goes into negative equity.
You say rates wont go up, trust me they will go up as quick as what they went down, maybe not this year but i definately think they will next year, but thats the gamble you take,you dont know and neither do i.
this time last year they were 5.5%, if you can preidct rates are going to be low for 5 years, your better than most people i know.
You should have started saving earlier like the rest of the FTB'S, its not good trying to stop them from buying because you are not in as good a position as them.
The only hope you have got is if mortgage companys start lowering the rates for people with small deposits, but i just can not see it happening.
Just noticed you edited the bit about rates staying low for 5 years, your an idiot,
otherwise you might just miss outI am not a Mortgage AdviserYou should note that this site doesn't check my status as not being a Mortgage Adviser, so you need to take my word for it. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
pandamonia wrote: »This is for FTB looking to buy at some point in the next 12-18 months.
Ill explain why you should not do what quite a few have been doing lately and why you should resist taking the plunge.
Lets say for example you have 10% deposit saved and ready to buy a 130k home.
The best mortgage on the market now is C&G 27 month fixed at 5.69% - The payments would be £731.82 plus about £1400 fees
Now if instead you held fire and continued to save for the next year or so and you managed to get 20% rather than 10% which would be 26k instead of 13k
You could get a HSBC tracker mortgage which is currently 3.69% - Your payments would reduce to £531.31 with about £1300 fees. - on the same £130k house!
Saving £5400 over the 27 months! - This saving will probably increase since interest rates are set to go near zero over the next year and stay quite low until signs of recovery are truly underway.
There is also the benefit from being immune to asset erosion as prices are currently falling about 1% per month saving you a possible £1300 per month on that house!
Also if more FTB resisted buying this year then home prices will keep on falling until enough demand for them forces prices to stabilise.
So all in all if you only have 10% which most people do then there is almost no benefit from moving out of rented or your parents until you have 20% deposit!
ill quote it so you dont edit it:rotfl::pI am not a Mortgage AdviserYou should note that this site doesn't check my status as not being a Mortgage Adviser, so you need to take my word for it. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
pandamonia wrote: »house prices are still overvalued and lending is still tighter than tight. how is the bottom forming with almost nothing getting better its only getting worse.
hes gone to bed, better have a rethink:mad: hahahhahahaI am not a Mortgage AdviserYou should note that this site doesn't check my status as not being a Mortgage Adviser, so you need to take my word for it. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
pandamonia wrote: »house prices are still overvalued and lending is still tighter than tight. how is the bottom forming with almost nothing getting better its only getting worse.
What do you mean nothing is getting better, Libor certainly looks better, I remember 18 months ago when you guys were saying 'wait till they come off their 2 year trackers and interest rates have gone up
Not expecting miracles but wouldn't be surprised if tthe market bottoms soon as there are no pressures on sellers. 'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
What do you mean nothing is getting better, Libor certainly looks better, I remember 18 months ago when you guys were saying 'wait till they come off their 2 year trackers and interest rates have gone up Not expecting miracles but wouldn't be surprised if tthe market bottoms soon as there are no pressures on sellers.
i remember that a lot people i know were expecting massive hikes when there deals where finishing luckily the rates are low and maybe thats why the house prices have not dropped to much, has people are not as desperate to sell has they dont need to.I am not a Mortgage AdviserYou should note that this site doesn't check my status as not being a Mortgage Adviser, so you need to take my word for it. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Yes I think this is why at the moment this recession doesn't feel as bad as is being reported for many people.
In the last recession prices were falling and interest rates were high - most people lost their homes because on top of job losses and pay cuts their mortgages became unaffordable in a matter of months.
As a home owner it isn't negative equity that scares me in itself (as we have enough of a deposit to mean we shouldn't be in scary amounts of NE and plan to live here until the children leave home), it's interest rates going up into double figures. That's why we're on a fixed rate until October 2011 even though it's costing us more than a tracker would. All that matters to me is peace of mind. The only worries I have about negative equity are in relation to not being able to fix the mortgage again and being exposed to high interest rates which is why we're saving as much as we possibly can at the moment.
I think if I was a FTB with a reasonable deposit I would be tempted to buy while I could secure an affordable fixed rate for as long as possible.
It does look as though interest rates will be low for some time but I do agree that we could go from a position of having very low interest rates to above average rates in a very short space of time.
I think house prices have dropped a lot - 20% in a year is a big drop. No idea how much further they will drop but I expect this year sellers will start being a lot more realistic. If someone manages to get a house for 25% or more off peak and then get a good fixed rate I wouldn't necessarily say they are getting a bad deal.0 -
What do you mean nothing is getting better, Libor certainly looks better, I remember 18 months ago when you guys were saying 'wait till they come off their 2 year trackers and interest rates have gone up Not expecting miracles but wouldn't be surprised if tthe market bottoms soon as there are no pressures on sellers.
He said almost nothing. LIBOR might be lower, care to mention another?
See Conrad's thread regarding subprimers now being offered money - a good thing? Really? The banks are !!!!ed and we keep pumping in public money so they can keep lending... sadly they chuck money at idiot property investors and subprimers instead of proper viable businesses (see Alan M's thread). I don't think this is a sign of things getting better. I think it's a sign of a horribly broken system and a totally inept government.
Things on the whole just aren't getting better, are they?
I'll agree that the OP seems a bit desperate in his "please don't buy now or I won't be able to buy by the time I've manage to save my pennies" plea though.
Oh, pandamonia, the swipe about the 4/5k challenge - THAT is how some of us have a damn sight more than 10% on hand as a deposit
Never heard the old adage "look after the pennies and the pounds look after themselves"? How about "every little helps", bit more up to date :rotfl: 0 -
He said almost nothing. LIBOR might be lower, care to mention another?
See Conrad's thread regarding subprimers now being offered money - a good thing? Really? The banks are !!!!ed and we keep pumping in public money so they can keep lending... sadly they chuck money at idiot property investors and subprimers instead of proper viable businesses (see Alan M's thread). I don't think this is a sign of things getting better. I think it's a sign of a horribly broken system and a totally inept government.
I can only think on the "subprime" one of conrads is pherhaps the guy had a lot of secruity/deposit. I would hope so anyway I think the days of 100% to sub prime have long gone.(I think all banks ar looking to cover worse case now with deposit/equity)
Well I hope anyway.0 -
Interesting OP. People here will either typically fall into two categories, those with a house, those without. From the responses seems like you're getting a lot of the former.
I wouldn't worry about buying so much at the moment. I'd be more warey of buying during a time of recession, because if you lose your job then you could end up with all sorts of problems.
As mentioned just keep saving. The economy will recover eventually, and once that happens the market will start to plateau. I certainly wouldn't worry about house prices going up anytime soon.
Me personally, I'll buy when I can sensibly afford to. And when I think the price is right. If it's not, I just won't buy in the UK and may consider elsewhere."Boonowa tweepi, ha, ha."0
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