Why FTB should Resisit buying now and Save instead! explained

housesitter

OP:
The fact that you are talking about a 10% deposit suggests to me that you believe a FTB is over stretching.
To then suggest that they take on board a tracker rate?
Which way do you think interest rates are going to go over the life of the tracker???


As a FTB with about a 40% deposit, I'm looking at fixing for at least 5years possibly longer. IMHO it's too risky not to if you are seriously considering buying in unprecedented times.


I couldn't agree with whathavewedone's analysis any more:
http://forums.moneysavingexpert.com/showpost.html?p=18198545&postcount=38

He seems to have exactly the same mindset as me and I'm sure there are many other FTB's with the same thinking.
I'm after stability and being sensible. For similar reasons it's why I haven't jumped on the ladder previously.

pandamonia

What makes me laugh most is the people who think that fixing for 5 years now will save them money. banks dont want you to fix becuase so you can save money banks want you to fix so they can MAKE money, not so long ago you could get 0.5 below base tracker, explain to me how that can be worse than fixed rate? highest you would of ever paid in this last bubble was 5% which is damn lower than most fixed.

fixed is for people who cant manager their money.

ess0two

pandamonia wrote: »

What makes me laugh most is the people who think that fixing for 5 years now will save them money. banks dont want you to fix becuase so you can save money banks want you to fix so they can MAKE money, not so long ago you could get 0.5 below base tracker, explain to me how that can be worse than fixed rate? highest you would of ever paid in this last bubble was 5% which is damn lower than most fixed.

fixed is for people who cant manager their money.

And how long are rates gonna stay this low?

pandamonia

housesitter wrote: »

OP:
The fact that you are talking about a 10% deposit suggests to me that you believe a FTB is over stretching.
To then suggest that they take on board a tracker rate?
Which way do you think interest rates are going to go over the life of the tracker???


As a FTB with about a 40% deposit, I'm looking at fixing for at least 5years possibly longer. IMHO it's too risky not to if you are seriously considering buying in unprecedented times.


I couldn't agree with whathavewedone's analysis any more:
http://forums.moneysavingexpert.com/showpost.html?p=18198545&postcount=38

He seems to have exactly the same mindset as me and I'm sure there are many other FTB's with the same thinking.
I'm after stability and being sensible. For similar reasons it's why I haven't jumped on the ladder previously.

the only instance that would require major interest rates would be a condition of the IMF money bail out. and this is a unlikely event. if interest rates hit double figues tho your fixed rate will end at some point and you will find yourself back in trouble. personally this wont effect me since the 104k i will be lending even after all my household bills are paid ill still have £700 per month disposable and with the gf paying half we will have nearly have £1500 a month to spend as we see fit.

even though i currently only have 10% im saving £700 per month to get to 20%.

Seems to me that people lend beyond their means and can at best afford 5-6%

pandamonia

ess0two wrote: »

And how long are rates gonna stay this low?

they will probably hit near zero before they go up just like in the USA, they are planned to fall to 1% next time the BOE meets up. i would estimate 2 year before they go above 3% at the very earliest.

i also forgot to mention in my post that i have an IFA in my family also my dad works in stretegic investments at HSBC, and is currently moving pension funds from property as fast as he can.

heres some more evidence http://www1.landregistry.gov.uk/asse.../29012009e.pdf

http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=471609&in_page_id=57&ct=5

Are you going to keep on arguing with me that buying now is a good idea even with 80% LTV you could wipe out your hared saved money in under a year.

StevieJ

pandamonia wrote: »

What makes me laugh most is the people who think that fixing for 5 years now will save them money. banks dont want you to fix becuase so you can save money banks want you to fix so they can MAKE money, not so long ago you could get 0.5 below base tracker, explain to me how that can be worse than fixed rate? highest you would of ever paid in this last bubble was 5% which is damn lower than most fixed.

fixed is for people who cant manager their money.

Are you not aware that many economists see high inflation in the future as a result of the UK govts atttempts to reflate the economy, this will mean that all physical asset classes will be in demand (read increasing house prices) more to the point it will mean a rapid increase in INTEREST RATES.

chucky

pandamonia wrote: »

they will probably hit near zero before they go up just like in the USA, they are planned to fall to 1% next time the BOE meets up. i would estimate 2 year before they go above 3% at the very earliest.quote]

doesn't matter what they drop them to - don't think you'll be getting a mortage anywhere near those rates.

pandamonia wrote: »

i also forgot to mention in my post that i have an IFA in my family also my dad works in stretegic investments at HSBC, and is currently moving pension funds from property as fast as he can.

well done - but my dad is better than your dad

pandamonia wrote: »

heres some more evidence http://www1.landregistry.gov.uk/asse.../29012009e.pdf

LR numbers have a lag of at least 2 months.

the two area that apply to me i have a +0.6% increase and -1.7% drop in price.

will you be buying your house on an average or pricing for your local area?

StevieJ

pandamonia wrote: »

they will probably hit near zero before they go up just like in the USA, they are planned to fall to 1% next time the BOE meets up. i would estimate 2 year before they go above 3% at the very earliest.

i also forgot to mention in my post that i have an IFA in my family also my dad works in stretegic investments at HSBC, and is currently moving pension funds from property as fast as he can.

heres some more evidence http://www1.landregistry.gov.uk/asse.../29012009e.pdf

http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=471609&in_page_id=57&ct=5

Are you going to keep on arguing with me that buying now is a good idea even with 80% LTV you could wipe out your hared saved money in under a year.

i also forgot to mention in my post that i have an IFA in my family also my dad works in stretegic investments at HSBC

So what :rotfl::rotfl::rotfl: BTW the that include investing in US sub-prime CDO's:eek:

housesitter

pandamonia wrote: »

Seems to me that people lend beyond their means and can at best afford 5-6%

Seems to me that people who fix at 5% for 5 if not 10 years are looking for stability in their monthly out goings and dont appreciate that a tracker at say 3.5% may well go up towards 10% at some point in the future.

YOU may think of reasons why interest rates might hit double figures.
I'd prefer not to risk it at all.

It's your money, your decision so do whatever makes you feel comfortable.

However, your attitude towards people making sensible and sound financial decisions stinks of troll.
Perhaps you should close your eyes and hum very loudly if we think you are naive.
Irrespective of your ability to be able to afford 10% interest, do you actually think it's a good idea to pay it?
Fixed rate avoids that eventuality totally.

To suggest fixed rate is for people who cannot manage their money is laughable.
It's about fixing a rate so that you CAN manage your money. You fix your out goings so every month you know exactly what you have to spend.

By your very suggestion that interest rates are going to to 3%.
How's your tracker going to then compete against a low fixed rate taken out with rates as they are now eh?
What are you going to do when your low rate tracker ends and all the rates have gone up?
Making that original fixed rate look like the better choice now eh?


You're either a troll or an idiot. Perhaps a little of both.

StevieJ

MrDT wrote: »

He said almost nothing. LIBOR might be lower, care to mention another?

Almost nothing interest rates :eek: OK affordability, prices down 20% as well, oh what about stamp duty, getting bored now