Anyone Nervous?

wheresmydoshat

^^ oh don't worry, any advice i get here just goes in to the melting pot.

my local area has barely experienced a 5% drop for the most part. in fact there just aren't the properties on the market.

we're hopeful that "green shoots" mean a few more houses on the market to choose from.

mewbie_2

chucky wrote: »

it's all swings and roundabouts to be fair.

To be fair. It's not.

Another 10% absolute minimum nailed on certainty countrywide drop in house prices. Possibly much more, but maybe worth reviewing AFTER the 10% drop taking us to 30% off peak. Say beginning of 2010 with a view to riding another 10% drop and reviewing again in 2011.

200k property. 10%. 20,000 pounds, cash, as good as in your pocket.

mewbie_2

wheresmydoshat wrote: »

^^ oh don't worry, any advice i get here just goes in to the melting pot.

my local area has barely experienced a 5% drop for the most part. in fact there just aren't the properties on the market.

we're hopeful that "green shoots" mean a few more houses on the market to choose from.

I don't suppose you'd pop a postcode up for us to help in your search?

chucky

mewbie wrote: »

To be fair. It's not.

Another 10% absolute minimum nailed on certainty countrywide drop in house prices. Possibly much more, but maybe worth reviewing AFTER the 10% drop taking us to 30% off peak. Say beginning of 2010 with a view to riding another 10% drop and reviewing again in 2011.

200k property. 10%. 20,000 pounds, cash, as good as in your pocket.

ok - your opinion. but countrywide?? when you're being told that they've only had about 5% drops...

another thing

with a £200k mortgage for every 1% future rate increase that's 10,000 pounds of a 5 year fixed.
you can do the math on a 10 year fixed. but i'll tell you is's £20k with just a 1% increase.

if rates go up 3% thats 30,000 pounds, cash, as good as in your pocket.
for a 10 year fixed you've just saved yourself £60,000 mortgage interest

very rough calculations but you see where i'm going.
i'll leave it with you

mewbie_2

chucky wrote: »

ok - your opinion. but countrywide?? when you're being told that they've only had about 5% drops...

another thing

£200k mortgage for every 1% rate increase that's 10,000 pounds of a 5 year fixed. you can do the math on a 10 year fixed. but i'll tell you is's £20k.

if rates go up 3% thats 30,000 pounds, cash, as good as in your pocket.
for a 10 year fixed you've just saved yourself £60,000 mortgage interest
i'll leave it with you

Trouble is with you Chucky - it's always ifs, buts and maybes. Never anything concrete, simple and sensible. Prices are going to drop further, everyone knows that. Interest rates, unemployment and taxation are going to go higher - everyone knows that.

It's simple stuff - why you persist in trying to confuse everybody I don't know. Or is it just the outpourings from your own befuddled brain?

chucky

mewbie wrote: »

Trouble is with you Chucky - it's always ifs, buts and maybes. Never anything concrete, simple and sensible. Prices are going to drop further, everyone knows that. Interest rates, unemployment and taxation are going to go higher - everyone knows that.

It's simple stuff - why you persist in trying to confuse everybody I don't know. Or is it just the outpourings from your own befuddled brain?

you yourself have said rates are going up - i'm following your comments.

i'm not having a go - but just have a read and understand what i'm saying. you don't have to agree with it just tell me why it's wrong.

neas

A FTB wont be able to fix anything around 4.5-5% even with a good deposit.

I can do a similar calculation.

If you are on a 2% tracker for As opposed t.o 5% fixed rate. If rates go up and you are on a 8% tracker for the same time unless you are overpaying the result would be similar.

Or if you have a 200k mortgage at 3% interest (lucky boy you) and after 5 years you've paid off 30-40k extra but at the end of fix inerest rates are high you still have 160k of debt to repay with no idea what interest rates will at that point.

The point being you could come to end of your fixed term, having paid a significant chunk off mortgage, but if your asset has devalued then the equity hasnt really changed. You are then forced to go onto a higher rate and pay the same as everyone else.

Unless you know whats happening to interest rates after your initial fix i.e 5 years then you cant say for certain its the best choice.

Whats worse paying 200k and fixing 5 years at 4% or paying 160k a few years later?

Its not a simple answer because we dont know what impact fixing now versus fixing later is because you dont know fuure interest rates..

You could fix now and only pay 10% off the mortgage but asset could fall 30%
you could fix now and pay 10% off the mortgage but asset falls 5% so its best decision
you could fix now and interest rates rise... so you get lucky and have low IR twice in a row for both fixes. This could negate drops in house prices.

chucky

neas wrote: »

Unless you know whats happening to interest rates after your initial fix i.e 5 years then you cant say for certain its the best choice.

Whats worse paying 200k and fixing 5 years at 4% or paying 160k a few years later?

Its not a simple answer because we dont know what impact fixing now versus fixing later is because you dont know fuure interest rates..

to be fair to me that's exactly what i said in post 81 with my comments about swings and roundabouts and was told it wasn't the case

chucky wrote: »

it's all swings and roundabouts to be fair.

mewbie wrote: »

To be fair. It's not.

http://forums.moneysavingexpert.com/showpost.html?p=22185199&postcount=81

we don't know what's going to happen - but you have to take into account what you think will happen to house prices and then mortgage rates. you can't make a decision without considering both and to be fair to you house prices are more immediate than mortgage rates.

some areas will increase some won't.
mortgage rates will go up though at some point.
it's not an easy choice - you could lose out twice.

neas wrote: »

Its not a simple answer because we dont know what impact fixing now versus fixing later is because you dont know fuure interest rates.

we don't know this either - we can only assume this will happen.

Thrugelmir

neas wrote: »

A FTB wont be able to fix anything around 4.5-5% even with a good deposit.

I can do a similar calculation.

If you are on a 2% tracker for As opposed t.o 5% fixed rate. If rates go up and you are on a 8% tracker for the same time unless you are overpaying the result would be similar.

Or if you have a 200k mortgage at 3% interest (lucky boy you) and after 5 years you've paid off 30-40k extra but at the end of fix inerest rates are high you still have 160k of debt to repay with no idea what interest rates will at that point.

The point being you could come to end of your fixed term, having paid a significant chunk off mortgage, but if your asset has devalued then the equity hasnt really changed. You are then forced to go onto a higher rate and pay the same as everyone else.

Unless you know whats happening to interest rates after your initial fix i.e 5 years then you cant say for certain its the best choice.

Whats worse paying 200k and fixing 5 years at 4% or paying 160k a few years later?

Its not a simple answer because we dont know what impact fixing now versus fixing later is because you dont know fuure interest rates..

Buy when the times right for you. Then pay off as much as you can for a period of time above your normal monthly repayment. With a 25 year mortgage you haven't repaid 50% of the capital owing until the 15th year. What you pay off in the first few years makes an enormous saving in compound interest. Reducing the capital owing will also protect you from interest rate swings.

Life is unpredictable. So take every opportunity to make the odds in your favour.

mewbie_2

I wonder where that postcode got to? Sod's Law it's in Merthyr Tydfil.