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How to be mortgage-free, prosper and increase
Comments
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Gray0103 wrote:Thats exactly what my wife and I did when we bought our house last year.
Well done to you two!(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
jonnydoe wrote:NearlyRich,
.. Or is this just success stories from people with good salaries and good timing..JD
We didn't have a good salary to start with . We had an average salary, then a student grant (that's when we had lodgers)...after that we had a good salary, then TWO good salaries, but by the time we had the two salaries we'd paid for the house!
Holidays....we went camping or stayed with friends.
Timing....well this was late 70s/early 80s....maybe we did have that on our side.
But I still know lots of people who bought at the same time as us and have increased their mortgage/got store cards/credit cards/ car loans etc and are not in our position. Some have mortgages until they are in their 70s! We'd paid ours off in our mid 40s.
Still think we've done well.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
jonnydoe wrote:
Although, again this relies on a good salary to afford a nice place in the first place.
JD
We have an inner-city Victorian terrace house. See my above post about salary.
BUT...also see my earlier post....because we were mortgage-free early, we also have a house halfway up a mountain in a 'pueblo blanco' in Spain. (Also paid for).
Don't see why I should have to make excuses for being sensible. I thought that was what this site was about!(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
Yes, it goes back to the "save more and /or earn more" which is all I'm trying to say (probably not very well). I'm the same as you being very sensible and foregoing A LOT of luxuries and getting miserable in the process lol I have no credit cards, no loans (except student loan) and don't eat out a lot..
A lot of people can't even afford an inner city victorian house (even after doing all the saving they can possibly do see previous post).. This does add another factor into the equation How big is your mortgage in the first place???
Get a 1 bed flat in a crap area and pay off early in 10 years or get a nice 2 bed terraced in a nice area and pay off in 20 years.. All down to affordability
The older generation don't know how lucky they are they REALLY don't... Cheap mortgages good final salary pensions no outrageously high student loans paying for their education etc etc..
Cheers
JD
PS Affordability nowadays is not what it was in the late 70's/80's so you're story is more down to good timing..as is mine0 -
jonnydoe wrote:ity
The older generation don't know how lucky they are they REALLY don't... Cheap mortgages good final salary pensions no outrageously high student loans paying for their education etc etc..Cheers
JD
Yes, we have got the pension (well my husband has, I can't have mine yet) and no student loan....but neither of us had been to University anyway when we first bought the house, so that wouldn't have applied. We did go later (in our 30s).
By the way, we had all second hand furniture and an old car (the car we have now is eight years old!). We slept on an air bed for months. People won't do that now, they want all furnished, all new, straight away.
I don't knowwhat the interest rate was at the beginning , but I do remember it being 15%.
And although the price of houses seems ridiculously low compared to today....we only earned about £40 a week!
So....it's swings and roundabouts..
I do know things are more difficult today....but I still think people could find things more affordable if they lowered their sights a bit and didn't expect everything at once.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
seven-day-weekend wrote:..after that we had a good salary, then TWO good salaries, but by the time we had the two salaries we'd paid for the house!
.
I must say, these were only 'good' salaries by our standards. Although my husband was a teacher, andd then later on I was a Local Government Officer, both our salaries came in below the national average . You can get more in advertising.(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0 -
Good on ya seven but not all young people are maxxed out on credit cards.. some are living with parents well into their 30's and saving all the pennies for a deposit on a place. Did you live with parents in your 30's?
Also, If you earned £40 wk you could only have borrowed roughly £7280 (40*52*3.5) Now that is a cheap house compared to nowadays!0 -
jonnydoe wrote:The older generation don't know how lucky they are they REALLY don't... Cheap mortgages good final salary pensions no outrageously high student loans paying for their education etc etc..
Cheers
JD
PS Affordability nowadays is not what it was in the late 70's/80's so you're story is more down to good timing..as is mine
Anyway, we did a similar thing to the original poster - one of our 'must haves' for our first house (bought in 1991), was that we would not be forced to move, as we intended to have a family at some point. So we bought a small mid-terrace 3 bedroom house, some distance from my work. Good friends of ours, bought a 2 bed semi at the same time for the same price - and years passed with both families having two children - for work reasons we moved in 1997, selling our house for £2,500 more than we paid. Our friends were 'forced' to move last year as their daughter matured and sharing a room with her younger brother become impossible. They are now in a 3 bed, mid-terrace - exactly where we had started 14 years previously.
So, agreed, that buying on one salary is hard to achieve, we didn't manage it for our first place, and lost 40% of our income when my wife stopped work, but we were never forced to move, by doing exactly what the OP suggested, choosing the house, not in our first choice area, and compromising.
It also makes us appreciate so much more, what we have now.
I agree, that timing has been part of it - in as far as we were in the housing market 15 years ago - average house prices as a multiple of average earnings have doubled - previously I thought this to be unsustainable, and predicted a crash at some point, but it hasn't happened yet. If it does, I feel for the people who can't ride it out and have bought their properties in the last 3 years ...
And finally, your dig at 'how lucky they are' :
Cheap Mortgages - ? Interest rates are lower now - not years ago, borrowing has never been cheaper - my parents, and I fully expected to pay 10% on borrowing. If you mean cheap mortgages due to lower house prices, that's already covered, and therefore a repeated point.
Education - not everyone qualified for a student grant - I didn't as my parents were self employed, so I didn't get to go to university as I couldn't secure sponsorship - and I'm so "lucky" now, that by the time my children are old enough to go to university it will cost me around £50k each for the privilege of giving them the opportunity to start their employed life without debts - so lucky us.
Final Salary pensions - nice to have - but devalued three times in as many years and now companies know they don't have to finance employee retention, as those in final salary schemes are not generally seeking to move on.
No outrageously high student loans - student loans are the best borrowing around, you can earn more interest on the loan amount than you have to pay. My friends who incurred debt in the 80s/90s, were paying interest at normal rates, as well as credit cards etc.
The current economic situation affects all of us and our children and unfortunately I don't see it improving in the short term.0 -
seven-day-weekend wrote:Yes, we have got the pension (well my husband has, I can't have mine yet) and no student loan....but neither of us had been to University anyway when we first bought the house, so that wouldn't have applied. We did go later (in our 30s).
By the way, we had all second hand furniture and an old car (the car we have now is eight years old!). We slept on an air bed for months. People won't do that now, they want all furnished, all new, straight away.
I don't knowwhat the interest rate was at the beginning , but I do remember it being 15%.
And although the price of houses seems ridiculously low compared to today....we only earned about £40 a week!
So....it's swings and roundabouts..
I do know things are more difficult today....but I still think people could find things more affordable if they lowered their sights a bit and didn't expect everything at once.
We didn't have to do the airbed bit, but our first TV was bought from a house clearance for £15 - lasted us 5 years before we gave it to a friend who'd just bought their first house. The settee was second hand, only three years ago we stopped using the dining table and chairs that came from my in-laws.
Essentials now include Sky, Microwave ovens, and a whole host of other luxury items.0 -
jonnydoe wrote:Good on ya seven but not all young people are maxxed out on credit cards.. some are living with parents well into their 30's and saving all the pennies for a deposit on a place. Did you live with parents in your 30's?
Also, If you earned £40 wk you could only have borrowed roughly £7280 (40*52*3.5) Now that is a cheap house compared to nowadays!
I know not all young people are living on credit cards, my son isn't. He lives in our family home in the UK. But in that area you can get a nice 2-bed flat for under £100k. Even my house, that I bought nearly 30 years ago, could be bought for £150k. So there ARE affordable places for first-time buyers.
I did not live with my parents till I was in my 30s. We started off our married life in a caravan, until we'd saved enough deposit to get a house.
Yes, I know 7.5 k is a cheap house. But the repayments then were still the same proportion of salary!(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0
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