Share to buy

Tim_D_2

Hi all

I live in London with 3 other people and would like to stop paying rent and buy. We've been thinking about all pooling together and found this http://www.sharetobuy.com/

The big problem is saving the £25-30K for a deposit!!!! Any advise or clever ways round this little obstacle?

Any help would be greatly received

System

If you have no capital, you need to Lend it. Remember that a house will always offer you a later return on your money.

Provided you all work, Get the cheapest loan you can find (using this site)
Split it between you, ... say £10,000 each
(not a lot to repay later..trust me)

Then put down your deposit. Make sure house is in good residental selling area 1st, that way it will increase in value for you.

Live in it... once you gain someequity in the house, repay your £30, 000 loan to the lender
(they'll be ripping you off by now- also try to avoid any early redemption penalties)

This shold then only hit your morgage by an extra £30 per month.

Hope this helps you. Fish around and ask others 1st.

I tried this, it worked.

Woby_Tide

This is awful, I feel like I'm stalking Danny, sadly we just seem to be online at the same time.

Firstly, you'll need to borrow the money, not lend it

whilst buying in a good residential area is sound advice, it is no guarantee that it will increase in value(certainly not short term and even long term you shouldn't rely on past trends to predict, a large correction (caused by any number of outside factors) could leave you with negative equity for quite a while(and given this is London where prices are dropping in some areas, whilst rising in others it's quite a risky time at present)


Also I've got to query how raising a mortgage by £30k only results in an increase of £30(even when all 3 of them pay extra thats only £90) using an online calculator a £30k loan at a very low 5% interest with £90 a month payments takes over 50 years to pay(the calculator wouldn't let me go past 50 years!). Can you show me your suggested mortgages/loans that satisfy the criteria your suggesting.


wheres lisyloo at a time like this!

System

Yes, Borrow the money, not lend it
(sorry, ive been fending off idiots all day- its finally gotten to me)

Im suggesting, as an example he takes a £20,000 loan, about a £449.26 monthly repayment. Then they jointly repay this monthly- using their income
(about £149 each a mth)

The £20,000 is now their new home deposit. Surely with guaranteed income between them they will get a £250,000 property in a reasonable residential growth area of London, better just outside though- to cover any prices dropping. Mortgage repayment
(using say alliance Leicester loans)will be £330 each per month. total of £370 each per month
(less than £100 per week each)

If theres a money crisis, relocate, change to interest only mortgage and rent out. There will be a guaranteed cash return for them whatever way they go.

Youre talking to a housing profiteer, and Youre loosing your argument already...

sorry my friend 8)

System

To then further reduce the total monthly payment, wait for house price to increase in equity
(forget the drivelle, every property ive bought wisely has increased in value- NEVER decreased)
Then add loan to mortgage by re-morgaging. Use New lender if current one cant accommodate.

Bottom line, people talking on housing, but knowing little or nothing about it only EVER have ONE, as they are afraid of the RISK of investment (whatif what if), and live their lives repaying their 1 Lender.

Sorry....................................but they do.

Woby_Tide

(sorry, ive been fending off idiots all day- its finally gotten to me)

now you know how the rest of the site feels responding to you

Mortgage repayment
(using say alliance Leicester loans)will be £330 each per month. total of £370 each per month

Why does the £330 become £370? and where is the deposit loan payment.

Also I queried why raising a mortgage by c.£30k using equity gaiined only resulted in a £30 a month increase, could you clarify that please


(this is like car crash TV, like watching a fire safety officer teaching safety with lighted fireworks in his hands)

lisyloo

wait for house price to increase in equity
(forget the drivelle, every property ive bought wisely has increased in value- NEVER decreased)

When did you buy danny?
Are you too young to remeber 1989?

Tim_D - You shuld consider the following.
1) Check out prices on this graph (top right)

http://www.propertyfacts.co.uk/pricetrend/pricetrends.htm

It shows prices over the last 30 years.
This first shows that prices DO drop and also that we are at historically very high levels (by any measure).
Also take note of what usually happens after we reach a peak (answer - prices fall).
There is definitely a risk of price falls at the moment and danny is wrong to say they never happen.

2) Make sure you budget for repairs.
3) Make sure you budget for interest rate increases.
4) Make sure you budget for insurance for death, sickness accident and redundancy.
5) Make sure you have a plan if one of your friends want to leave. Can the rest of you afford it? What happens to his/her share? What do you buy it for if prices have dropped?
6) Also budget for increasing costs of petrol, electricity, gas, council tax and water.

Personally I think this is a really bad time to buy property and you'd be much better off renting for a few years as prices may drop.
You might think your rent is "dead money" but if you buy you need to spend a roughly equivalent amount on interest on the money you borrow. So it roughly the same amount of "dead money" plus you have to pay for repairs and take the risk of price falls.

Some people are doing the total opposite of what you are trying to do buy selling their home to go into rented accomodation as they fear price falls.
Current prices are crazy and won't continue because people can afford them.
If you buy now you might seriously regret it later.

I would suggest you strongly consider the above especially 5 as it's quite likely that at some time one of your mates will want to move on which could leave the rest of you with higher payments.
Anyone who tells you prices always rise and never fall is quite frankly talking out of their a***.
This is factually incorrect and can easily be proven with officical figures from the land registry who record ACTUAL sale prices.

System

Woby Tide, and the rest. .Thank you for your input on my threads, or my replies to others. One thing is for sure, wherever i am , you are onto me.

I apologize to you for any offensive or misunderstood posts.

I do constantly look at my raising propery prices however every year, with a kind of invisible question mark hovering above the figures, as though to say...how have you done that...?

Its no mystery to me of course, that Is why i continue, with sucesss on every house i buy.

Its also Then, that i realise- as and when people ask me how i do it, doubt my ideas, and ways of investment, that I realise its just not worth telling them.. or even 'tyring' to explain- and in the end i dont bother.
This is how i feel. And this has now happened.


(please remember Martin, that any subsequent comments made following this post, are continuing to persist after my apologies to them)

Woby_Tide

you didn't answer my questions, they have nothing to do with your knowledge or property prices, they are simple questions about your calculation of 'facts' and figures

System

Nr do i intend to . You win. Everybody, woby tide has won this one. He's absolutely spot on. I am terribly misguided and my calculations are almost incredulous.

There you go. Doyou feel better. Good, im glad.

Now Please change the discussion,

Thank you

Tim_L

Posts like this were very common on the day traders boards in the late 90s, when a great many people were making money on a rampaging bull market and sincerely believed (and told the world) that all of the profit was down to their own skill and judgement. Which of course it wasn't: they were sitting on an elevator, and elevators go up.

When things started to slide in the early 2000s, the posts were replaced by a string of frantic messages from people who had piled money in and were now seeing it evaporate.

Borrowing to invest in a market that appears from every indicator (and the instincts of most experienced market observers) to be on the point of turning is pure madness - very very risky indeed. Buy to let yields are very very marginal at present on high or full loans to value, and if you factor in possible capital reduction you are on a very dangerous road indeed. This is the kind of logic that has bankrupted people from the Dutch Tulip crisis through the South Sea Bubble and on to the more recent tech crash.

Does it bother me if Danny loses his money? Well no, assuming he has any money in the market, and I'm far from persuaded that he's anything more than a mouthy chancer who has turned up to start an argument. But asserting confidently that his investment strategy is the route to riches is lethally misleading. No-one with any genuine knowledge of the subject would go anywhere close to making such a suggestion.

Oh, but I forgot, we're all one house wage slaves locked into the claws of big business, where Danny is the clever no. 2 come to lead us all out of darkness.