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Debate House Prices
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How we'll know when house prices hit rock bottom
Comments
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No-one can time the absolute top or bottom of a market with any degree of consistency but thanks to the supertanker-like behaviour of the housing market there should be enough time to get in before it really takes off in line with fast increasing inflation.
I'm in no hurry to jump in as long as it keeps falling - I'm lucky enough to be sitting on enough savings to buy outright but I'd much rather have a 3-bed semi than a 2-bed terrace for my cash. And maybe even a small mortgage at low rates for a detached place if prices go low enough over the next 12 months .... by 2010 though it's time to get nervous about the inflationary consequences of what is unfolding now in the Fed and BoE.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Cannon_Fodder wrote: »I disagree - timing is very important - not to the extent of trying to squeeze the very last percentage point out of the crash - but as Barclays predict 10-15% more to come off during 2009, that would be (tens of) thousands of pounds.
In the words of !!!!!!?;
"Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage."
Agree, timing is the most important thing after having the finance to purchase.
I would imagine that 99% of people that are waiting to buy would miss the bottom of the market; due to numerous factors, being in a chain, finding the right property etc, etc...
going further than this, personal timing is also very important which in itself has even more critical factors to get right.0 -
It doesnt matter when you buy if your buying a home, becuase as a long term investment, property is a sound bet.
Of course it matters, because you will be paying more money month in, month out, for the whole of the mortgage!...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
A good point about personal factors made above. A large one for me would perhaps be when the feeling of job security (or possibly just industry/sector security) were to returnPrefer girls to money0
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neverdespairgirl wrote: »Of course it matters, because you will be paying more money month in, month out, for the whole of the mortgage!
I'm talking about the price of a house, not the mortage. The mortgage is not dictated by the price of the house. The mortgage is dictated by your deposit and lender.
In long term speak i.e. 25 years.
Borrow 100k, pay back 200k, general inflation of house prices will far out way the cost of £100k to borrow the money. Buying at the top or bottom of the market only has a significant effect if you plan to sell in the next 5-10 years. Any longer and the price you paid won't matter0 -
I'm talking about the price of a house, not the mortage. The mortgage is not dictated by the price of the house. The mortgage is dictated by your deposit and lender.
In long term speak i.e. 25 years.
Borrow 100k, pay back 200k, general inflation of house prices will far out way the cost of £100k to borrow the money. Buying at the top or bottom of the market only has a significant effect if you plan to sell in the next 5-10 years. Any longer and the price you paid won't matter
Rates will oscillate quite dramatically over the 20 or 25 year term of a typical mortgage.
If you borrow a lot when rates are low, based on the apparent affordability, then you will get stung when rates rise unless you can somehow secure those low rates over the entire lifetime of the mortgage. Even getting a 10-year fix is tricky, never mind twice that length of time.
On the other hand, if you borrow much less at a time of high rates you can always refinance when rates are low.
It's always preferable to borrow less. Don't get fooled by the supposed 'affordability' of borrowing a large capital sum based on momentarily low interest rates when you are borrowing a lot of money and paying it back over the long term.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
sabretoothtigger wrote: »Nice theory spoiled by the conclusion. If the government had the sense, they'd ban 100% house loans for the reasons currently being seen.
When 90% loans become competetive relative to 80 or 70% loans then you know the odds of further falls are reducing.
No one knows the future but theres good bets and bad ones
i agree with sabre
currently 80% loans are just as competitive as 60% loans
whereas anything over 80% is a lot less competitive
when the gap narrows for loans above 80% then the market will improve0 -
Buying at the top or bottom of the market only has a significant effect if you plan to sell in the next 5-10 years. Any longer and the price you paid won't matter
I don't think that is right at all. Because you will be paying back a lot more capital (and therefore, on average, more interest as well) over the term. Instead of spending that extra money, or saving it....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
I thought that, at the moment, 60% LTV deals are sometimes better than 80%? Certainly, a lot have a 75% cut-off....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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neverdespairgirl wrote: »I thought that, at the moment, 60% LTV deals are sometimes better than 80%? Certainly, a lot have a 75% cut-off.
on the best buy tables at the mo...the cut off for the best deal seems to be 80%0
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