Not a good time to buy

chucky

Procrastinator333 wrote: »

No - If the buyer is on a repayment mortgage, then the renter saves the difference for a larger deposit. When they buy they ahve the same remaining mortage value. They can chose a 22 year term and have the same period.

you've conveniently avoided answering the point...

you don't want to buy now because of risk in the next 3 years...

things may go the opposite way but you may do well

if things go well you still have a further 3 years risk at the end of your mortgage as you have delayed buying.

if things go badly for you, you've lost out in these 3 years and you still exposed to 3 years risk at the end of your mortgage because you've delayed to buy.

Procrastinator333

chucky wrote: »

you've conveniently avoided answering the point...

you don't want to buy now because of risk in the next 3 years...

things may go the opposite way but you may do well

if things go well you still have a further 3 years risk at the end of your mortgage as you have delayed buying.

if things go badly for you, you've lost out in these 3 years and you still exposed to 3 years risk at the end of your mortgage because you've delayed to buy.

Maybe i'm misunderstanding. The buyer buys using a 25 year repayment mortgage. 0 deposit for ease of use.

During years 1 to 3 the buyer repays £5k. At the same time renter saves the same £5k. The renter then buys, using the £5k as a deposit.

After 3 years they both have the same mortgage balance. The renter then choses a 22 year term on their mortgage. The buyer has 22 years left. They both therefore finish paying the mortgage at the same time.

I'm not trying to avoid a question I don't undertand what 3 years you are refering to?

bertiebots

rictus123 wrote: »

Whens a good time to buy then

Maybe I am being a bit controversial here but isnt it when you need a home?:whistle::think:.....





..................runs away:eek:

bouche

Then again, might be the best time to buy!

chucky

Procrastinator333 wrote: »

Maybe i'm misunderstanding. The buyer buys using a 25 year repayment mortgage. 0 deposit for ease of use.

During years 1 to 3 the buyer repays £5k. At the same time renter saves the same £5k. The renter then buys, using the £5k as a deposit.

After 3 years they both have the same mortgage balance. The renter then choses a 22 year term on their mortgage. The buyer has 22 years left. They both therefore finish paying the mortgage at the same time.

I'm not trying to avoid a question I don't undertand what 3 years you are refering to?

i agree with your maths only if interest rates and house prices don't go higher in those initial 3 years. if even only one of those doesn't go in your favour you've made a bad decision because you've got an additional 3 years to repay a mortgage that you could have been paying initially.

you're logic is right and not a bad one if you think house prices will be lower, interest rates will be higher and you can get the finance in the future.

bouche

chucky wrote: »

i agree with your maths only if interest rates and house prices don't go higher in those initial 3 years. if even only one of those doesn't go in your favour you've made a bad decision because you've got an additional 3 years to repay a mortgage that you could have been paying initially.

you're logic is right and not a bad one if you think house prices will be lower, interest rates will be higher and you can get the finance in the future.

It's a big commitment anyway though for 3 years let alone 25. Have you taken out a life insurance policy?:) You know.....;)

avalanche_3

Now is the time to get a fixed rate mortgage! Rates are low.

If you are going to live in a property for a few years and need a mortgage then now is the time to buy.

If you have cash to buy an investment property then now is not a good time to buy, house prices will be lower again within the next 2 years.

carolt

chucky wrote: »

i agree with your maths only if interest rates and house prices don't go higher in those initial 3 years. if even only one of those doesn't go in your favour you've made a bad decision because you've got an additional 3 years to repay a mortgage that you could have been paying initially.

you're logic is right and not a bad one if you think house prices will be lower, interest rates will be higher and you can get the finance in the future.

So do you expect the person buying now to take out a 25 year fixed rate? Or surely interest rates going higher will affect them both equally?

As you well know, long-term fixed rates are far from low at the moment - for rather obvious reasons.

If the person buying now takes a typical 2-3 year fix, at the end of that, they're in exactly the same position in 3 years time as the person who chooses to buy then.

It's prices you need to compare - interest rates are a red herring.

Harry_Powell

The best time to buy is when you can afford it, want to settle in a specific area for a reasonable amount of time and desire the stability home ownership brings. If this coincides with a market crash, then that's a bonus but you can't put your life on hold forever.

It seems that some on here are waiting for a 'perfect storm' of HPC, low interest rates and higher mortgage lending, stable economy and job security and low taxes. Well it ain't going to happen.

So what if you can't buy at the absolute bottom of a cyle, perhaps you will when you get your next home? So what if the economy is ragged at the moment, do you think that over the 25 years or more of home ownership you'll not see a recession?

carolt

Of course Harry - that's absolutely true.

We're discussing someone in no particular hurry with no other factors influencing their decision.

In reality, things don't usually pan out like that. Other factors usually play at least as large a part as financial ones.

But given they're all unique and individual, they're impossible to generalise.

Financial factors however, apply equally to everyone.

Hence there is a point in discussing them in isolation.