Is it Time to buy and secure a long-term fixed rate mortgage?

scousethife

Dithering_Dad wrote: »

lol, sorry ad. I missed that one. I always thank people who contribute to my threads, well except the idiots like the guy who made post #2. People might disagree with me and I'm really happy for their input and addition to the debate (and they'll get a 'thanks' for their effort) but personal abuse isn't useful to anyone and just serves to make the abuser look stupid.

.

gets a thanks???????????

:rotfl: :rotfl: :rotfl: :rotfl: :rotfl:

Infantile at best, deeply insecure at worst.

You just want house prices to not drop any further cos you dont want the price of YOUR house dropping.

Thats all you ever post, and it wont do any good, it wont make anyone buy.

People like you have been saying dont miss the boat for a couple of years now, and some fell for it. They over stretched and are now being repossesed in their thousands.

NO ONE is buying............ house prices are dropping, and its going to carry on like that for years.

Getting a thanks.................thats the funniest thing I have read in ages:rotfl: :rotfl: :rotfl: :rotfl:

scousethife

Repossesions have hit a 12-year high with homebuyers losing 40,000 properties in 2008

http://www.guardian.co.uk/money/2009/feb/20/repossessions-homeowners

Dont miss the boat!!!!!!!!!!!!!!

scousethife

Today's figures are in line with ones reported by Nationwide for February, which showed prices dropping by 1.8%, while the annual rate of decline increased to 17.6%.

http://www.metro.co.uk/news/article.html?House_prices_drop_by_another_2.3%25&in_article_id=569439&in_page_id=34

Dont miss the boat!!!!!!!!!!!!!!!!!!!!!!!!!

scousethife

40,000 repossessions in the year - 1 in 290 mortgages
10,400 repossessions in the fourth quarter - 1 in 1,100 mortgages
1 in 64 mortgages in arrears of 2.5% or more
1 in 53 mortgages in arrears of three months or more (inflated by lower interest rates)
75,000 repossessions forecast for 2009 remains unchanged

Dont miss the boat!!!!!!!!!!!!!!!!!

scousethife

No wonder a survey just out from the Royal Institute of Chartered Surveyors shows that this is one of the worst environments for the housing market ever.

http://www.moneyweek.com/personal-finance/why-your-mortgage-wont-get-any-cheaper-13832.aspx

Dont miss the boat!!!!!!!!!!!!!

MRSTITTLEMOUSE

I've never known anything like what's happening today.
In the past two weeks we have had two young families in our street have their homes repossessed.I would'nt mind but houses have started to shift recently albeit after a long while.
It was heartbreaking seeing those kids move all of their life into a van.

the_ash_and_the_oak

Dithering_Dad wrote: »

Actually, because I'm bored watching 'Notting Hill' with the missus, I ran your percentages through an amortization calculator (calculates how the real cost of a loan over the length of the term).

Did you know that if I bought a house for £100k with a 5% rate mortgage fixed for 25 years, I would eventually pay a total of £175377.

If Ash & Oak waited for a further 5 years for the market to fall and eventually bought the same house for £64,332 with a 10% rate mortgage fixed for 25 years, he would eventually pay a total of £175377.

Principal----Payment

---

APR

---

Total Interest

---

Total Loan Value
£100,000---£584.59

---

5%

---

£75377.00

---

£175377.00

£64,332

---

£584.59

---

10%

---

£111045.00

---

£175377.00

So we would pay the same amount, but I'd be living in the house 5 years before him and would be mortgage free 5 years earlier too.

I'd suggest people have a play with an amortization calculator to see just how much they're really saving (or not as the case may be) by waiting to buy.

http://www.yona.com/loan/

It was actually a hypothetical question, with no right or wrong answer. For example it really rather depends on the deposit size

To re-ask the question. If you had 80K, the question becomes, would you rather borrow 20k at 10%, or 120k at 5%

the_ash_and_the_oak

Or to use your example I would have 64k saved within 5 years. The more you have saved, the more the principal matters than the interest rate. The less you have saved, the other way round.

Also if you borrow when interest rates are high, I would imagine a long fix would not be the way to go, and with a bit of luck the rates might come down over the course of the mortgage

kennyboy66_2

the_ash_and_the_oak wrote: »

Or to use your example I would have 64k saved within 5 years. The more you have saved, the more the principal matters than the interest rate. The less you have saved, the other way round.

Also if you borrow when interest rates are high, I would imagine a long fix would not be the way to go, and with a bit of luck the rates might come down over the course of the mortgage

As mortgage payments are probably broadly similar to rents at the moment, you could probably put that 64k towards overpaying your mortgage.

I have a house, but if I was looking would not be in a huge rush.

I hate to use the word "ladder" but if you can buy at the next size level (eg 3/4 bed semi with garden rather than 2/3 bed terrace) over the next few years it potentially saves you a big chunk of moving costs and a lot less stress.

Dithering_Dad

scousethife please find any post where I have ever said 'dont miss the boat'. Let me save you the hassle, you won't find any because they don't exist. Instead you will find me making posts two years ago where I was telling people that I thought we were heading into economic disaster and that I was going to prepare and protect myself, and I encouraged people to do the same. I started the Mortgage Free in Three support group, where we all encouraged each other to make a few sacrifices to pay down our liabilities (mortgages) and therefore increase our disposible income.

I personally have paid £45k off my mortgage and have put myself into a much more secure position financially in these difficult times. The other guys in the MFi3 group have paid down a combined mortgage amount of £2,048,337. Some members have already paid off their mortgages, the remainder are sleeping a lot easier at nights due to their reduced debts.

Hardly the actions of someone who thinks the good times will last forever and that people should jump onto the bandwagon.

I also moved my personal pension pot into a cash fund, and again I advised people to do the same. I have lost a bit in the resulting crash but no where near as much as other people, many of whom have lost a third of their pot.

I now feel that the next phase of the economic disaster is going to be high inflation and crushing interest rates. I intend to protect myself again and will be looking to get a cheap fixed rate mortgage. Again, here I am telling people what I intent to do and advising others to do the same. I think that if people are thinking about buying a house (and many are) then they should make sure they get a fixed rate mortgage. I also think there is a set of people who should check their finances because they may be financially better off buying than continuing to rent - again, my advice to these people is to do the calculations (based on more than just the price of housing) and if they decide to buy, they should get a fixed rate.

I've had the same response as yours from people on the MFW board when I first started encouraging people to overpay their mortgages. I was inundated with people who said that it was a flawed strategy because "Mortgages are the cheapest debt you'll ever have" and that I should "Leverage the debt to make more money in the stockmarket". Well, we don't get these people in the MFW board any more.

MoneySavingExpert was created so that people can share financial ideas and help each other out. Anyone who listened to my mortgage overpayment advice over two years ago will be in a better place right now. Anyone who listened to my stockmarket advice over one year ago will be in a better place right now. What do you do on this forum apart from make purile comments?

If you believe that, no matter what people's financial circumstances are, that they should NOT buy a house, then please engage in the discussion and back your argument with facts and figures.

If you decided that you are happy to hold out for the very last penny, regardless of any consequences, then that's your choice. Other people have different views and different circumstances. Please allow them to have a serious debate about this without all the hysterics and personal comments.

Good luck with your future house purchase, I hope you get it for the price you want.