Never having a mortgage

patrickbateman

I have a dream, to one day buy a house effectively outright, but by using an offset mortgage.

Is this ever likely to be possible given the current mainstream desire for property prices to keep increasing, which is "obviously" a bad thing as it lowers the standard of living people can afford, and takes money out of the economy.

I am a working class boy from a working class family. I work hard and save hard, but despite having a reasonable sum of money saved am nowhere near the levels required. Many of my friends are now considering buying but dont have deposits etc. I do have a deposit, but as I have worked hard to save I cannot bring myself to spend it on an asset (liability!!!) that I feel is massively over-priced and in a bubble. I would be risking real money in buying now, and wonder if this crazy bubble will ever pop!

What are other peoples thought?

getmore4less

Wait.

reasons

Unless you can get a real cheap rate mortgage renting is currently likely to be cheaper than buying untill there is a correction in prices/rents.

It may swap back again but for now keep saving and skip a rung on the ladder when it does and sove one lot of moving costs.

rizla01

getmore4less wrote: »

Wait.

reasons

Unless you can get a real cheap rate mortgage renting is currently likely to be cheaper than buying untill there is a correction in prices/rents.

It may swap back again but for now keep saving and skip a rung on the ladder when it does and sove one lot of moving costs.

Agreed!

If not for the accruing value of that asset.

There is never a better time to buy than when you can afford it. Property will ALWAYS go up - eventually.

How long do you intend to live? Same question.

getmore4less

rizla01 wrote: »

Agreed!

If not for the accruing value of that asset.

There is never a better time to buy than when you can afford it. Property will ALWAYS go up - eventually.

How long do you intend to live? Same question.

The probelm is that if you buy in a peaky market the risks to the prices and the risks to income tend to have a very high correlation.

Riding out any negative equity requires an income, thats where people come unstuck.

The other issue is that in a rising market people buy any old dross, 1 beds studios, in a correction these become rental market fodder, buyers want better places 2bed/family homes they can grow into.

A good first by is probably something small and ideal for oldies a much easer sell on with cash rich demand downsizers.

rizla01

I think that this has always been the same problem, though.

And taking out a Mortgage now is still risky from the point of view that things CAN go wrong.

Trouble is, you need to weigh up the alternatives to see if that risk is worthwhile and how badly it'll affect you and can you get out of the problem Etc.

It's a hard hill to climb, if things go wrong admittedly, but the benefits far outweigh the (Possible) disadvantages.

I was one of the fortunate ones insomuchas nothing much went wrong for me during my mortgage years and consequently, am now comfortable and mortgage free. Things are even tougher now and it really is a case of Who Dares Wins.

I think that only those with VERY secure PAYE jobs or those with skills coupled with an entrepreneurial mindset should consider taking out a Mortgage today and if that person is you, then don't hesitate.

patrickbateman

Some good points offering food for thought.

I dont know of anybody in a PAYE job that is truely safe, private sector is still struggling and public sector is likely to get culled. Cant believe anybody is seriously considering buying now, especially if negitive equity takes hold, could be financial suicide.

Read the other day that the average age of 1st time buyers is now 37 for people not helped by the bank of mum and dad. Hope that they are buying a home (not a flat or starter house) for the rest of there life as the 25 year mortgage is pretty much gonna take them into retirement. The "property ladder" cannot be in existance anymore, in fact its more like a snake.

Seems that there is much more that could go wrong than could go right at the moment, they're brave people buying now! I can't afford to take that risk!!

rizla01

I think that you would be right in being cautious if you are buying a home. Not so much to worry about if not. In the last 6Mths I have purchased two props but at the right price and for the right reason.

It is chancy buying a home at present but I would still advise it if you are sensible, pretty secure and have a back-up plan. I.E. choose one that you can part let or rent entirely if possible if things go t1ts up.