Uberbear Challenge

MrDT

I have seen a three bed semi detatched property advertised at 82k. The original (never gonna happen) asking price was 105k in September 2008. It's no palace but a decent enough modest family home.

The location is fine - a largeish village (bank, post office, spar, co-op, butcher, baker, no candlestick maker, couple of takeaways, a sports centre, two primaries and a secondary), and it's within half an hours drive of the main employment hotspot for the area.

Assuming we managed to buy the house for 75k, and put down a 40k deposit, we would need to borrow 35k. If we opted for a 10 year fixed rate mortgage the best deal I've found would see us repaying £24,886 over ten years, equivalent to about £207 a month. Renting a similar property would likely set us back £500pm. Currently we rent a one bed place for £200pm to maximize deposit savings, buying wouldn't save us anything per month, but we'd be in a much bigger place. We'd also lose interest on the 40k savings.

We are both in full time employment and would easily be able to afford a £207 a month mortgage.

If we were to both lose our jobs and end up working minimum wage jobs, I assume we would probably still be able to afford £207 a month mortgage repayments.

If we seperated and only one of us ended up paying the mortgage, that one person should be able to afford £207 a month.

If we seperated and only one of us ended up paying the mortgage, and that person had a !!!!!! minimum wage job, that one person would probably still be able to cover a £207 a month mortgage.

Uberbears, your challenge is to post scenarios where buying this place would actually be a stupid move, and explain to me how the purchasers could be in a world of pain before the ink had even dried on the contract. Good luck! :money:

mr.broderick

MrDT wrote: »

I have seen a three bed semi detatched property advertised at 82k. The original (never gonna happen) asking price was 105k in September 2008. It's no palace but a decent enough modest family home.

The location is fine - a largeish village (bank, post office, spar, co-op, butcher, baker, no candlestick maker, couple of takeaways, a sports centre, two primaries and a secondary), and it's within half an hours drive of the main employment hotspot for the area.

Assuming we managed to buy the house for 75k, and put down a 40k deposit, we would need to borrow 35k. If we opted for a 10 year fixed rate mortgage the best deal I've found would see us repaying £24,886 over ten years, equivalent to about £207 a month. Renting a similar property would likely set us back £500pm. Currently we rent a one bed place for £200pm to maximize deposit savings, buying wouldn't save us anything per month, but we'd be in a much bigger place. We'd also lose interest on the 40k savings.

We are both in full time employment and would easily be able to afford a £207 a month mortgage.

If we were to both lose our jobs and end up working minimum wage jobs, I assume we would probably still be able to afford £207 a month mortgage repayments.

If we seperated and only one of us ended up paying the mortgage, that one person should be able to afford £207 a month.

If we seperated and only one of us ended up paying the mortgage, and that person had a !!!!!! minimum wage job, that one person would probably still be able to cover a £207 a month mortgage.

Uberbears, your challenge is to post scenarios where buying this place would actually be a stupid move, and explain to me how the purchasers could be in a world of pain before the ink had even dried on the contract. Good luck! :money:

It's not the one i seen on the tv the other night which is edging nearer and nearer to that cliff side is it? If not i'd go for it.

chewmylegoff

MrDT wrote: »

Uberbears, your challenge is to post scenarios where buying this place would actually be a stupid move, and explain to me how the purchasers could be in a world of pain before the ink had even dried on the contract. Good luck! :money:

house prices continue on their downwards trend, such that in a year's time you could have purchased the house for £10k less.

what do i win?

MrDT

mr.broderick wrote: »

It's not the one i seen on the tv the other night which is edging nearer and nearer to that cliff side is it? If not i'd go for it.

That's not very uberbearish Mr B, sorry to say I have to disqualify you.

Not near a cliff, not about to be washed away into the sea, not gonna fall into a pit of doom, no smouldering 40 year old underground fires in the area, just a normal house in a normal village. It's in Wales, which I believe is a little offputting for some though lol (fools the lot of 'em)

Graham_Devon

I don't think anyone will fault it, personally.

But the biggest thing would that 40k becoming "worth" in real terms 28k if prices dropped a further 30%.

That, to me, knowing full well I was buying in a falling market, when I didn't neccesarily need to, and had lost all that money (if they split, or whatever) would have me in a whole world of pain!

Obviously if they need a home, or it's going to make them 10x happier, no one could really argue it.

MrDT

chewmylegoff wrote: »

house prices continue on their downwards trend, such that in a year's time you could have purchased the house for £10k less.

what do i win?

If I purchased for 10k less it'd save me maybe fifty quid a month over 25 years?

£50 a month would not see the stupid buyers in a "world of pain". Sorry, you didn't read the question properly, I have no choice but to disqualify you

Where's dopester? If anyone can win this challenge surely he's the man!

MrDT

Graham_Devon wrote: »

I don't think anyone will fault it, personally.

But the biggest thing would that 40k becoming "worth" in real terms 28k if prices dropped a further 30%.

That, to me, knowing full well I was buying in a falling market, when I didn't neccesarily need to, and had lost all that money (if they split, or whatever) would have me in a whole world of pain!

Obviously if they need a home, or it's going to make them 10x happier, no one could really argue it.

Paper loss just like a paper gain. Maybe the thought of losing 12k capital value would hurt the same as the thought of your house 'earning' you money through HPI would put you on a high during the bubble. If you don't realise the loss/gain by selling it's not real is it. Maybe a little "d'oh!" style mental anguish, but not really a 'world of pain'.

I give you credit for using the "world of pain" soundbite though. I can't bring myself to disqualify you :cool:

Really2

I know my EA family member is selling repos at £60K from £130K peak.:eek:

View is repos have bottomed as they are selling like hot cakes. (people are compating for them)

purch

What if you are Candlestick Maker ??

What would you do for work ?

Graham_Devon

MrDT wrote: »

Paper loss just like a paper gain. Maybe the thought of losing 12k capital value would hurt the same as the thought of your house 'earning' you money through HPI would put you on a high during the bubble. If you don't realise the loss/gain by selling it's not real is it. Maybe a little "d'oh!" style mental anguish, but not really a 'world of pain'.

I give you credit for using the "world of pain" soundbite though. I can't bring myself to disqualify you :cool:

Woohoo!!

MrDT

purch wrote: »

What if you are Candlestick Maker ??

What would you do for work ?

There is a gap in the market and I'm ideally suited to take advantage. Startups can thrive in times of recession, weathering hard times at the start of your journey can make for a highly successful business in the good times.

In fact, if armageddon comes along we'll be needing candles. Unless you've stocked up on windup LED lanterns. I could trade candles for food, bottled water etc.

This seems like a go-er to me. Sorry purch, not pessimistic enough, but thanks for the great business idea.