Mortgage Dilema. How Do Single People Afford A House These Days??

sm9ai

sickofdebt - to be honest unless they earn some silly amount or stretch themselves too far, then they don't.

sm9ai

sportbeth wrote:

Think of what your parents paid for their house and how over the next 20 odd years you then get an increase in salary (with inflation) and how much your mortgage figure seems to drop against that.

My parents paid 3 times single salary for their first house. (A 3 bed bungalow)

For an equal property I would have to pay 8-10 times. And I am in a better paid job than my parents where in.

Yes inflation will help, but not at the rate that it helped my parents and to be honest it won't really help much at all.

PoorDave

But what were interest rates when your parents could buy a decent house @ 3x 1 salary?

Low rates have meant that higher multiple of salary can be just as affordable as things were back then, in some cases.

missk_ensington

I'm 20, single parent working part time and a full time uni student and I managed to buy on a self-certificate, and got a mortgage for £82k and put down 10k deposit. I think you have to have a near perfect credit rating for a self-cert though.

There are also some lenders who do up to 5.5 times your salary, but you should ask MortgageMamma about this as she will know which ones they are.

AMILLIONDOLLARS

sportbeth wrote:

You're absolutely right. My OH and I have just bought our first home together, it cost is £300k, and we saved for over a year to get the deposit together.

:eek:

As first time buyers, you are very very lucky to come in at that level of the market, congratulations, wishing you all the best in your new home!!

sm9ai

PoorDave wrote:

But what were interest rates when your parents could buy a decent house @ 3x 1 salary?

Low rates have meant that higher multiple of salary can be just as affordable as things were back then, in some cases.

Well yes they were a lot higher than they are at the moment.

But that meant that rates would most likely go down.

Whilst now they are most likely to go up.


But when they bought they then had significant inflation and lower rates(Although not all the time). It all worked out extremely well for them.

To buy now though, rates will go up and inflationary pay rises will probably be taken up by rising food and fuel prices.

If things stay as they are then lower rates help, but where as for most of our parents paying mortgages got easier over time, do not expect it to happen in the todays climate.


Edit: By the way I'm not saying don't buy, I am myself saving up a sizeable deposit too buy. Just don't expect it to be easier after the first five years or so.

AMILLIONDOLLARS

Just remembered, twenty odd years ago we bought our first flat for around £23,000, but lost it when interest rates went into double figures as we couldn't afford the repayments, ended up in a homeless family hotel in one room, with baby who is now 23. Swore to myself, never again, our mortgage now is now the first thing that's paid.

So my advice to anyone is, whatever multiples you choose make sure, you can afford the repayments no matter what!!

PS. Forgot to add we bought it with a 100% mortgage, how stupid is that:o

meanmachine_2

sportbeth wrote:

The only thing to remember is that once you're in it's not too hard once you've been in for a few years. Think of what your parents paid for their house and how over the next 20 odd years you then get an increase in salary (with inflation) and how much your mortgage figure seems to drop against that.

Wow, sportbeth seems to have internet access from the 1970s. Spoooky!

I don't know what planet you're on but in my line of work there's been ZERO wage inflation for the past ten years.

And the influx of East Europeans isn't going to help matters - which is why the govt is welcoming them in.

In a climate of low or minus wage inflation and rising interest rates (oh but they'll never go above 5%, the government won't "allow it") taking on a mega mortgage is insane.

sportbeth

meanmachine wrote:

Wow, sportbeth seems to have internet access from the 1970s. Spoooky!

I don't know what planet you're on but in my line of work there's been ZERO wage inflation for the past ten years.

And the influx of East Europeans isn't going to help matters - which is why the govt is welcoming them in.

In a climate of low or minus wage inflation and rising interest rates (oh but they'll never go above 5%, the government won't "allow it") taking on a mega mortgage is insane.[/Quote

Well I hardly get massive rises every year but I do remember that in the 80's £10,000 a year was a decent wage, now £30k is decent so its all relative

sportbeth

AMILLIONDOLLARS wrote:

:eek:

As first time buyers, you are very very lucky to come in at that level of the market, congratulations, wishing you all the best in your new home!!

Thankyou, but we will be paying off as much as we can as early as possible. Every overpayment will help on the mortgage to get the interest and term cut short.

It was hard work though. I sold my car, walked everywhere, didn't go out, MSE'd like a demon for a year and did things like applying for tax rebates etc. No stone was left unturned to try and raise the £15k deposit!! It really meant a lot when we did it though