Ftb's Are Back!!!!!!!!!!!!!!!!!!

russ21282

why is 6% on a 2 year fixed financial suicide?

is it because of the rate or the length of the fixed rate?

poppysarah

housesitter wrote: »

The word you are looking for is borrow.
It's not the first time you've made that mistake either.

They should call credit cards debt cards to make it clearer what they are.

pandamonia

housesitter wrote: »

The word you are looking for is borrow.
It's not the first time you've made that mistake either.
It would aid in people taking you seriously (which needs a fair bit of help from other threads).


Oh, I agree with you that regardless of how it's done and certainly at 6% a 2 year deal is financial suicide.


I'm a FTB too and looking at hitting the ladder around 175K which gives me a house I don't see I'd ever need to move from in the future. Looing for security. I feel it goes hand in hand with prudence and saving up a large deposit.

is there a difference between lend and borrow?

might be a local way of saying the same thing.

confused31_2

pandamonia wrote: »

is there a difference between lend and borrow?

might be a local way of saying the same thing.

yes they are spelt differently, other than that i see no difference.

Cat695

russ21282 wrote: »

why is 6% on a 2 year fixed financial suicide?

is it because of the rate or the length of the fixed rate?

because its to high....bigger deposit will drop this....and in 2 years time the interest rate could be 10% (thats about 300 quid more a month....it happened before and it can happen again) so how would you feel if you came off your 6% only to go onto 10%

thats why its a bad idea

QTPie

Bizarrely "investment buyers" seem to be back too (at least one in my area is ). Apparently a better bet (providing they are staying their medium longer term) than a bank...

QT

housesitter

confused31 wrote: »

yes they are spelt differently, other than that i see no difference.

Lend(ing) is the act of loaning an "item" to someone.
Borrow(ing) is the act of receiving an "item" on loan.

russ21282

Cat695 wrote: »

because its to high....bigger deposit will drop this....and in 2 years time the interest rate could be 10% (thats about 300 quid more a month....it happened before and it can happen again) so how would you feel if you came off your 6% only to go onto 10%

thats why its a bad idea

but surely the people who are on a 4% fixed rate for 2 years will see theres go up to 8% and so will see a similar rise?

The reason i ask is we are taking out a 6% fixed rate but it is for 5 years. But if we were to wait and save a bigger deposit over the next year or two, like you say, the interest rates could go up to 10%, then we would be able to knock a couple of percent off the rate but that would take it to 8% and so we would actually be worse off.

We have only taken the mortgage out based on one of our incomes (the lowest one as well) so we have plenty of contingency if things do take a turn for the worst. But i think it greatly depends on peoples circumstances what mortgage is best and taken at what time.

woody252506

russ21282 wrote: »

but surely the people who are on a 4% fixed rate for 2 years will see theres go up to 8% and so will see a similar rise?

The reason i ask is we are taking out a 6% fixed rate but it is for 5 years. But if we were to wait and save a bigger deposit over the next year or two, like you say, the interest rates could go up to 10%, then we would be able to knock a couple of percent off the rate but that would take it to 8% and so we would actually be worse off.

We have only taken the mortgage out based on one of our incomes (the lowest one as well) so we have plenty of contingency if things do take a turn for the worst. But i think it greatly depends on peoples circumstances what mortgage is best and taken at what time.

Spot on Russ, exactly what I have been pointing out. Circumstances affect when the time to buy is good for the individual(s) concerned.

Next year we will have £200 extra a month as my car loan finishes. We will most probably over pay for a year (not going above what our limit is before we hit a penalty charge) using this as we are used to paying it out anyway and then see how things are in 2 years when our fixed rate runs out. If interest rates are at 9/10% then the £200 I have extra will cover the majority of this rise. Thats if we are at 90% equity or worse.

To try and make sure our LTV isnt bad ill be aiming to knock 30% off at least from the peak price of the house I buy.

At the end of the day even the so called experts cant predict whats going to happen in 2 years, never mind us lot! So what do we all do? Not buy? Then when the market bottoms out (Which wont be known until it starts rising again) people, especially FTB will be scrambling and competing much more for the cheap houses hense rising the prices of them even more!!!!!

Like I have said a few times, if you buy now make sure you knock a minimum of 25% + off the price and ensure that the money you borrow is comfortable for you to pay to back yourself up, If in a few years time interest rates rise as people are suggesting they might.

Taking out unemployment cover and keeping a few months worth of mortgage payments saved up is something which I will be doing too!

:cool:

dawsonio

Things are definately picking up, the new build estate i live on had been selling houses at the rate of 1 house every 2 months and now over the past month about 8 have sold and loads of people have been viewing, and the prices havnt even reduced from the level i bought at in December 2007.

The only difference is the 25% interest free for 10 years offer they are running but they have increased the houses that qualify for this by about £5k so all in all it works out nearly exactly the same price as i paid. Madness!!

Its amazing how many people fall for these offers, when in fact if you work it out there is no saving at all.