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  • FIRST POST
    • shaunhouse
    • By shaunhouse 30th Sep 17, 11:16 PM
    • 73Posts
    • 27Thanks
    shaunhouse
    Am i crazy? - rolling the dice?
    • #1
    • 30th Sep 17, 11:16 PM
    Am i crazy? - rolling the dice? 30th Sep 17 at 11:16 PM
    I've read a few posts on the forum and i'm a follower of everything house prices and mortgages.

    The long and short of it is:
    I'm now 30. I purchased my first house in a middle of road sort of area 6 years ago for £150,000. It is a fairly standard 3 bed semi corner plot with parking for 3 cars and a great south facing garden. The inside of the house is very average, no character but we've put our mark on it over the years, put in a new kitchen and decorated all the rooms. We had considered extending, our friends across the road have done this.
    I did fairly well to get the house in the first place, 2 years out of uni with no money to start with I built my first business and used the profits to fund the purchase with a 30% deposit. 5 years into owning the property I paid off the mortgage in full.



    My daughter was born 2 years ago and we starting looking for a larger house. In the area (like many others) good houses are scarce and its took us a full 2 years to find somewhere we really love. We sold our house STC within 3 days for £212,000. The house I love i've managed to sort a private deal at £420,000. If it went on the open market it would be on for 500k and most likely selling for around 450 - 460k (lesser houses have recently). I have lined up - 50% deposit - mortgage fixed for 5 years 1.9%... meaning monthly payments at around £700 per month. I would still have 50k+ in the bank and around 75k in company funds to draw upon.


    All this being said, I would be stupid to not have doubts considering alot of infomation not just on this forum and confidence is slowly starting to shift.


    What do people think? Am I mad to go through with this purchase?
Page 2
    • Debtslayer
    • By Debtslayer 1st Oct 17, 1:35 PM
    • 435 Posts
    • 616 Thanks
    Debtslayer
    If you can comfortably afford the repayments and you still have a healthy amount in savings then go for it. You are getting a good mortgage rate for your 5 year fix and during that time save as much as you can so when the 5 years is up you can pay a good chunk of it off if you needed to
    Current Mortgage 01.10.17 £113,513.88
    MFW Start Mortgage: £114,794.64
    Current MED: 2036 Target MED: 2026
    Overpayment Target for remainder of 2017: £2,000
    Mortgage overpayment savings: £684.80
    MFW No 124
    • shaunhouse
    • By shaunhouse 1st Oct 17, 1:36 PM
    • 73 Posts
    • 27 Thanks
    shaunhouse
    House
    Should add the vendor has purchased a new build on a very expensive estate about 450k so not a major kite flyer, nothing sinister just an old woman who has lost her partner and doesn't want a big house anymore.
    • Crashy Time
    • By Crashy Time 1st Oct 17, 1:39 PM
    • 5,306 Posts
    • 2,223 Thanks
    Crashy Time
    We wouldn't have been the economy is faltering we would have been kicked over the edge, our fairly buoyant housing market and hoiuse building programme is a major part of the economy keeping it's head above water.

    The housing market was what was sacrificed in the 1990s. the economy was relatively strong prior to that and the housing market was over heated due to interest rate cuts which were being used to keep the pound lower against the big currency in Europe at the time, which was the Deutsch Mark, when we joined the ERM we were tied to Germany's high interest rates which in turn killed the housing market. The slump was further exaggerated by high unemployment.
    When we were kicked out of the ERM the housing situation stabilised

    We now have better mechanisms to control all of our markets including the housing market. Mainly the independent power the BoE has to respond to changing conditions and whilst unemployment is low there is no need to squeeze the housing market.
    Originally posted by chappers

    Similarly the BoE will lose "control" of interest rates as soon as the US starts to hike, or there is an uncontrolled event such as a EZ break up.
    • shortcrust
    • By shortcrust 1st Oct 17, 3:00 PM
    • 1,468 Posts
    • 1,922 Thanks
    shortcrust
    Some posters on this thread are in my ignore list because they might just as well be bots programmed to churn out the same posts in response to a set of key words. My guess is what they’re saying today is the same as when I bought my house 18 months ago. If I’d listened my life would still be on hold and I wouldn’t have had a fabulous summer in the garden of my very own first house.
    • Crashy Time
    • By Crashy Time 1st Oct 17, 8:18 PM
    • 5,306 Posts
    • 2,223 Thanks
    Crashy Time
    Some posters on this thread are in my ignore list because they might just as well be bots programmed to churn out the same posts in response to a set of key words. My guess is what they’re saying today is the same as when I bought my house 18 months ago. If I’d listened my life would still be on hold and I wouldn’t have had a fabulous summer in the garden of my very own first house.
    Originally posted by shortcrust

    18 months ago? I wouldn`t get too comfortable just yet Hope you didn`t pay too much for it.
    • shaunhouse
    • By shaunhouse 1st Oct 17, 10:55 PM
    • 73 Posts
    • 27 Thanks
    shaunhouse
    What do you stand to gain if things go south crashy?

    It will be a dark time, I know far more people who have borrowed too much money in my opinion. Cars on lease. If its goes south friends will have a big fall coming or hard times keeping hold of a negative asset(s).
    • purpleparrotuk
    • By purpleparrotuk 1st Oct 17, 11:29 PM
    • 249 Posts
    • 37 Thanks
    purpleparrotuk
    How many years will your mortgage be over? I can’t work out how you will only be paying £700 per month on a £210k mortgage.
    • chappers
    • By chappers 1st Oct 17, 11:45 PM
    • 2,956 Posts
    • 1,704 Thanks
    chappers
    Similarly the BoE will lose "control" of interest rates as soon as the US starts to hike, or there is an uncontrolled event such as a EZ break up.
    Originally posted by Crashy Time
    Rubbish, we will to a certain degree be led by world economics, but we won't have to make meteoric rate rises neither will the rest of the world.
    We will need to keep control of our interest rates so we don't over heat the pound , particularly with what is going on in Europe at the moment.
    As I said previously I would expect some modest rises pretty soon to try and inject a bit of life into the economy, possibly also a cut in reserve requirement to try and keep some of that money in the market
    • shaunhouse
    • By shaunhouse 2nd Oct 17, 8:35 AM
    • 73 Posts
    • 27 Thanks
    shaunhouse
    How many years will your mortgage be over? I can’t work out how you will only be paying £700 per month on a £210k mortgage.
    Originally posted by purpleparrotuk
    Its over a 35 year period. The monthly payment is 690 a month approx.
    • Crashy Time
    • By Crashy Time 2nd Oct 17, 11:46 AM
    • 5,306 Posts
    • 2,223 Thanks
    Crashy Time
    Rubbish, we will to a certain degree be led by world economics, but we won't have to make meteoric rate rises neither will the rest of the world.
    We will need to keep control of our interest rates so we don't over heat the pound , particularly with what is going on in Europe at the moment.
    As I said previously I would expect some modest rises pretty soon to try and inject a bit of life into the economy, possibly also a cut in reserve requirement to try and keep some of that money in the market
    Originally posted by chappers

    I didn`t say they would be "meteoric", I said they would lose control, i.e the present ludicrous situation isn`t going to be sustainable, however when some countries/ regions within the EZ start demanding their own currency again, all bets are off regarding interest rates IMO. Either way I am just glad not to be attached to a large debt burden
    • shaunhouse
    • By shaunhouse 2nd Oct 17, 12:02 PM
    • 73 Posts
    • 27 Thanks
    shaunhouse
    crashy
    What is your situation if you don't mind me asking Crashy?
    • nubbins
    • By nubbins 2nd Oct 17, 1:54 PM
    • 694 Posts
    • 929 Thanks
    nubbins
    What is your situation if you don't mind me asking Crashy?
    Originally posted by shaunhouse

    I'll get some popcorn whilst I eagerly await the response
    • shaunhouse
    • By shaunhouse 9th Oct 17, 1:31 PM
    • 73 Posts
    • 27 Thanks
    shaunhouse
    I'll get some popcorn whilst I eagerly await the response
    Originally posted by nubbins
    Looks like you'll need more popcorn!
    • glasgowdan
    • By glasgowdan 9th Oct 17, 1:55 PM
    • 2,645 Posts
    • 2,955 Thanks
    glasgowdan
    Looks like you'll need more popcorn!
    Originally posted by shaunhouse
    He never answers questions.
    • GDB2222
    • By GDB2222 9th Oct 17, 2:03 PM
    • 14,180 Posts
    • 76,289 Thanks
    GDB2222
    Looks like you'll need more popcorn!
    Originally posted by shaunhouse
    You seem to be (sensibly, in my view) worried about the risk you are taking. One way you can reduce that is to fix your mortgage interest rate for a longer term. Have you thought of going for a 10-15 year fix?
    No reliance should be placed on the above! Absolutely none, do you hear?
    • chappers
    • By chappers 9th Oct 17, 2:26 PM
    • 2,956 Posts
    • 1,704 Thanks
    chappers
    You seem to be (sensibly, in my view) worried about the risk you are taking. One way you can reduce that is to fix your mortgage interest rate for a longer term. Have you thought of going for a 10-15 year fix?
    Originally posted by GDB2222
    That's a very interesting point and does potentially offer long-term piece of mind.
    However I do wonder where the real value lies in those loans they may seem tempting when you look at the absolute figures and within the time period, yes the interest rate may well go above the 10year fix rate, but for what period of the loan.
    • shaunhouse
    • By shaunhouse 11th Oct 17, 10:05 AM
    • 73 Posts
    • 27 Thanks
    shaunhouse
    5 year
    You seem to be (sensibly, in my view) worried about the risk you are taking. One way you can reduce that is to fix your mortgage interest rate for a longer term. Have you thought of going for a 10-15 year fix?
    Originally posted by GDB2222
    I'm comfortable with the risk of the 5 year fix. Barclay's 1.65% for 5 years works out at £685 per month and I plan to overpay about 10k per year which would leave me with a balance of about 135k after the 5 years.

    I've come to realise I'm way down the pecking order in terms of who will be crucified if interest rates soar and house prices decline. Not as worried as when I started the thread.
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