Help negative equality and new home

makingbetter

mbga9pgf wrote: »

It wouldnt be if you make mortgage overpayments. If you overpaid 200 quid a month, mortgage interest average 4.5%, you would save 19K in 7 years.

You are also forgetting that whilst things are bad, salaries will climb over time (so will taxes?) and thus your 200 quid overpayment now should be a lot more in a few years time.

So 7 years or nearly 8 years
relatively speaking, £200 now is £200 in a few years time- your salary will increase but so willyour other expenses.
even so, I think £200 a month is quite a lot to be able to save.

neas

get a lodger.. and overpay mortgage

mbga9pgf

makingbetter wrote: »

So 7 years or nearly 8 years
relatively speaking, £200 now is £200 in a few years time- your salary will increase but so willyour other expenses.
even so, I think £200 a month is quite a lot to be able to save.

So, someone 100 years ago who could only afford to save 3 pennies a month by your logic would still only be able to save 3 pennies today? Nope, thought not.

Not going to go too in depth about this becuase I have been slated elsewhere, but just because you earn X, doesnt mean you only save 0.1 times X.

My wife and I are fervent savers and put over 80% of our takehome away a month, thats before rent payments. We have a simple car and have very few luxuries, although we make a deal of going out on birthdays for a nice meal. Christmas, we dont NEED anything, so I usually do all the cooking and washing up for christmas.

We have all got this idea that saving X amount is hard. I promise you, you cvan cook just as good a meal with ingredients from asda as from waitrose. People are much more likely to buy take-out than think of the extra cash it is costing them (or the effect it is having on their savings). At the end of the day, the OP has a home, they may want to move, they cant, sorry about that, its life I am afraid. If you dont like it, lobby your local MP for more greenbelt to build on and stricter mortgage controls. Because those two measures will significantly decrease the time it will take to get the market moving again.

makingbetter

mbga9pgf wrote: »

So, someone 100 years ago who could only afford to save 3 pennies a month by your logic would still only be able to save 3 pennies today? Nope, thought not.

Not going to go too in depth about this becuase I have been slated elsewhere, but just because you earn X, doesnt mean you only save 0.1 times X.

My wife and I are fervent savers and put over 80% of our takehome away a month, thats before rent payments. We have a simple car and have very few luxuries, although we make a deal of going out on birthdays for a nice meal. Christmas, we dont NEED anything, so I usually do all the cooking and washing up for christmas.

We have all got this idea that saving X amount is hard. I promise you, you cvan cook just as good a meal with ingredients from asda as from waitrose. People are much more likely to buy take-out than think of the extra cash it is costing them (or the effect it is having on their savings). At the end of the day, the OP has a home, they may want to move, they cant, sorry about that, its life I am afraid.

totally agree that a nw house is not right and you need to be able to afford it.
Not sure where the % of your salary saving comes from- I've never even heard of that, ceratinly wasn't advocaing it.In my mind you save anything above what you can't avoid spending.

Its very simplistic,and a little niave, to assume people are spending loads of money on food or can all save a large % of their income though- 70% of my income goes on rent, utilities and travel. I don't have a car, and that doesn't include food (but then I can feed 2 people for £25 a week so don't feel the need to save money there)

I earn an above average salary but would struggle to save £200 a month. Lots of people are in a situation where they have high outgoings due to the house buying goldrush of the last few years.Maybe it was stupid but its done and that is now peoples realities. They are just trying to get through it in the best way they can.

joey298487

mbga9pgf - thanks for your advice but your life seems rather sad.

We are only on this planet for 80 years or so . Take some advice live a liitle you dont know when it going to end.

thanks for your advice but its plain to see there are no easy options.

For me i think it boils down to

1) Take a 20 grand loan out to bridge the gap.
2) Rent a house

makingbetter

Oh and your 3 p anaolgy- they may well only be able to save the EQUIVILANT of 3p (i.e. an amount which buys the same today as 3p did 100 years ago) thats just basic inflation theory.

As someone else mentioned the ony way to get above inflation pay increases is to get a better paid job, retrain, reduce outgoings. You don't just get more money by keeping everything the same and waiting.

makingbetter

Joey before you count Number 1 as an option I'd check out the poitImade about not being able to used a borrowed deposit with your FA

mbga9pgf

mbga9pgf - thanks for your advice but your life seems rather sad.

Well, im not in negative equity and have a 40% deposit, so I tink I will stick with my own advice thanks. You really dont have to spend money to have fun. I promise. I cannot think of anything worse than spending my friday paycheck down the pub, to end up with no cash, a sh*gged liver and a rancid hangover.

Anyways,

The Loan is going to be a really, really bad idea.

Rental is a better option, although I wouldnt become a reluctant landlord, I personally would cut my losses, sell for what I could (the stamp duty thing is going to help you out). Remember, renting your place out means you HAVE to LEGALLY notify your lender, which = possibly Higher interest rate on your mortgage plus potential remortgage fees. You need to get specialist Buy to let home insurance, gas inspection certificate plus pay for wear and tear and any boiler breakdowns etc. Its a world of pain I would imagine you could do without right now.

Selling to move into rental would be my choice. But then again, according to you, I have no life, so take it or leave it.

End state, if you cant afford your standard variable rate (not saying you cant mind), you CANNOT bury your head in the sand and you need to go and speak to your lender as soon as possible.

mbga9pgf

makingbetter wrote: »

Oh and your 3 p anaolgy- they may well only be able to save the EQUIVILANT of 3p (i.e. an amount which buys the same today as 3p did 100 years ago) thats just basic inflation theory.

As someone else mentioned the ony way to get above inflation pay increases is to get a better paid job, retrain, reduce outgoings. You don't just get more money by keeping everything the same and waiting.

But you are still saving more than 200 per month though arent you? Which was the original point you made. So, in other words, this will decrease the time to save 19K.

joey298487

thanks making it better but how would a mortage company know that i have raised the cash through a loan?