what do you think?

Pobby

Yes I can`t quite get how they are getting this multiple either but I surely do not think he is making all this up. What is a little strange or maybe I am reading something into this, is the girls parents appear to be encouraging them. Not sure what they do but I am told it`s something to do with property. Hmmmmmm !

Cannon_Fodder

Agree with "get a better deal" comment from Kenny. Perhaps point them at some new builds, if he likes things shiny...then there's a chance of some NE-proofing discount.


Or, point the parents at Lloyds' new 95% product, based on them holding some savings alongside the son's mortgage...
http://www.fairinvestment.co.uk/deals/news/mortgages-news-Lloyds-95-per-cent-first-time-buyer-mortgage-helps-parents-Lend-a-Hand-3343.html

Say how its a good deal, that will lower the rate. Which appears true, to be fair.

You get to be the good guy, not being negative, they get to think about their own savings position - assuming they have any, and haven't spent the whole 6 figure income...

...it sounds like something Brown dreamt up to tell Lloyds to do, to justify their being bankrolled by taxpayers.

Why a bank that is losing billions thinks making debt on a falling asset easier to obtain is a good idea, after the crunch was supposed to be learnt from I just don't know, though.

Mini_Bear

Dont worry Pobby, i have acquired many friends and relatives who are now in equally precarious financial positions.
all u can do is give ur advise, however doom-mongery and then step back and try not to worry.
a lot of ppl simply need to make the mistakes for themselves b4 they learn anythin. (i wud much rather take the cheaper option and take sum1 elses free advise!)
i feel sorry for ur nephew as i too hav watched buckets of hypnotising property !!!!!! programs over the last 5 yrs. u just get suckered in 2 thinkin u deserve ur own property and gettin a mortgage is great and doin diy etc will add loads of value to it.

Jennifer_Jane

Do they realise that a house is an expensive thing to maintain? Insurance, maintenance, council tax, boiler servicing, etc, electricity/gas, water. The costs just go on and on. This is apart from the costs of buying: solicitors/moving/furnishing/decorating etc.

Also, I hope that if they are not going to get married, that they act responsibly with wills and the right kind of purchase (can't remember which one it is), and some agreement about how the furniture and other joint goods should be handled (in the event of a break-up or death or disability).

I can see how you worry about them, Pobby! It is madness.

Jen
x

chewmylegoff

it's alright, there's no way they'll be able to borrow 5.5x joint salary with a 10% deposit at the moment. unless they lie to buy.

his net pay will be £1,300pcm, hers £840, so after a £1,000 mortgage payment they'll only have £1,100 left between them for the whole month. £550 each, per month, in the south east. good luck with that...

the mortgage deal, at 40 years, sounds silly as well - implies an interest rate of 6.25% - the same monthly payment would fund a 25 year 4.75% mortgage - surely if they're able to secure the income multiple they could get a better deal than 6.25%. sounds suspiciously sub prime, which i suppose makes sense given their income:loan ratio.

if they have really managed to secure this mortgage, i would slap him until he cried and agreed not to buy.

Pobby

Yes indeed. It does sound very sub prime to me. I am amazed just how they have managed to do this. I think, unless anything major happens, that living on £1,100 per month is quite possible. Many pensioners have to. However there wouldn`t be a lot of fun money left over. I wasn`t much older when I first bought, it took about 30% of income to service the debt. Those were the days when wage inflation was high and with some promotion, within a very short space of time that figure greatly reduced. That`s not going to happen for a very long time.

You know, I have seen a lot of bad come out of this hpi that`s far greater than any benefits it may have had.

Davesnave

I don't think living on that amount per month will appeal once the novelty has worn off, but the young man has a Dad with resources, and maybe he's been bailed out before. That's certainly what's happened in similar situations within my family.

However, if Dad is in the building trade, the ability to bail may not be there, just when it's needed. Nightmare!

ruggedtoast

Where on earth is this house? Outside of London in the SE £1000 a month in rent will get you a very nice 3 bed or better in a good area.

The rental for what you described OP wouldnt come to more than £750pcm at most, with no nasty surprised when the boiler conks out etc.

They would be so much better off renting and saving.

Conrad

chucky wrote: »

to be fair he predicted the credit crunch reasonably well but claimed it was happening in 2006 and couple of times earlier - he's based out of Hong Kong I think.

he's using the tecnique of splatter predictions of a crash with a nailgun, one will eventually hit the mark.

if anything he is a good read

Dr Bubb is a true genious.

He didn't just predict the crash, he was using the words 'credit crunch' and predicting that to be the cause. I recall threads of his in 2006 asking us to post signs of the comming credit crunch.

He also did some lovely yarns describing how many Americans would find themselves back in the 1930s, and indeed many now are.

Pobby

ruggedtoast wrote: »

Where on earth is this house? Outside of London in the SE £1000 a month in rent will get you a very nice 3 bed or better in a good area.

The rental for what you described OP wouldnt come to more than £750pcm at most, with no nasty surprised when the boiler conks out etc.

They would be so much better off renting and saving.

Ah but renting is dead money:rolleyes: