Should we Gazunder???

Homersimpson

bumpydog wrote: »

Children aren't exactly a luxury item though are they?

I'll admit to being one of the people being indignant about this. I live in the southeast in a modest three bedroom house with a morgage that was (up until the rate crash) over £1500 a month. I am the sole earner of the household on below the new proposed threshold (but many hours of hard earnered overtime usually puts me just over). We have two kids and do find it a bit of a struggle at times - the child benefit comes in really handy.

Next door to us is a lady in an identical house with two kids. She doesn't work, gets her rent paid by the state, along no doubt with many other benefits such as free school meals, fresh fruit, computers etc. She must be doing all right financially as most evenings she can be found outside in her garden smoking and drinking whilst chatting on her mobile phone. Thats what makes me angry...

I can see why your angry but the problem we have is that the welfare state is being abused by so many people, it should be a safety net to catch people when they fall and not a way of life. I have to restate my comment why should we just pay out a benefit to people who don't need it?

doctorseuss

Homersimpson wrote: »

Yes of course because we're running out of people, the populations is positively dwindling!

You need to have between 2 and 3 children (depending on where you live) to maintain zero population growth. Less than that and the population shrinks. The rate in the UK is a bit less than 2, so without immigration the population would indeed be shrinking.

So society does need children, that was the thinking behind CB being a universal benefit in the first place. The point now is that we can't afford it, translation: we can't afford to sustain our population without immigration.

Don't tell that to the Daily Mail brigade though. Facts tend to annoy them

bumpydog

Homersimpson wrote: »

I can see why your angry but the problem we have is that the welfare state is being abused by so many people, it should be a safety net to catch people when they fall and not a way of life. I have to restate my comment why should we just pay out a benefit to people who don't need it?

Yes I agree the welfare state should be there for people in their time of need. Having children is very draining financially (especially when they are young as the household income is effectively cut in half by either one parent not working or by paying nursery fees). I can assure you that many people up and down the country rely on this extra money just to get by. Many people with kids do really need it (not all I admit), but the way in which the threshold has been set on just one person's income, ignoring those households earning > 80k who can still claim, is just plain wrong.

Littlebutterfly_2

Well....I'd just like to know, did he gazunder or not?!

jw2003

Littlebutterfly wrote: »

Well....I'd just like to know, did he gazunder or not?!

Same here...

wodgerdodger

If the OP believes the loss of CB would affect his ability to make ends meet then he is seriously over committing himself and shouldnt be buying at this level at all. If interest rates start to increase, which they surely will before his CB reduces, then he will be right in the !!!!!!!

Think this was just an excuse anyway. Lenders dont accept CB as income and will have offered him mortgage based on declared income and mortgage cost would have met their affordability parameters as definitley not their practice these days or possibly even allowed to under "prudency" quidelines.

IMO all a red herring.

njh82

I want to know too...

citizen11

So an update, which as you might expect will be controversial; I gazundered my vendor. Gave my reasons as a) market falling dramatically (already knew it was falling but not crashing) and b) I have learnt of my falling income. I reported that I phoned my bank to confirm they were happy for me to proceed, (this was in fact advised by my solicitor as a measure of protection against mortgage being withdrawn between exchange and completion) and they advised that my application was being re-evaluated as an element was based on CB income. Whoever said that banks don’t accept CB income is misguided, my lender HSBC would have been happy to, had I provided at letter from the inland revenue saying I was getting CB. So even though this conversation with my lender didn’t take place it is entirely plausible.

This raised eye brows as you can imagine although I had an unlikely ally in my vendor Estate Agent. He is acting for both my vendor and my vendors’ vendor, so my change of circumstance had the potential to cost his agency (and family, small independent) around 6k of revenue which they would have had this side of Christmas. My vendor did not know that I was in the EA office when he advised them of my changed position. I know for a fact he advised them to accept, so if you vendors think your fees buy your agents loyalty you may be mistaken. Of course you may think that I am paying too much anyway but for a few points of reference the price is now 5% lower than the asking price of my reference house two streets away and 10% (unadjusted for inflation) lower than the house next door changed hands for in 2005 and 25% lower (unadjusted for inflation) than a comparable 2007 transaction a few streets away. This is in a thriving commuter town on the M4 corridor in the South West.

So that’s where we all are, my offer dropped by 10k they have grudgingly exchanged on the advice of their EA. Unsurprisingly they are unwilling to let a carpet salesman in to measure up which I must say is rather inconvenient as they have a few pets it needs re carpeting sooner rather than later.

Of course they could have told me where to go but if they went back on the market they would likely achieve a similar price to that I said I can pay now, (I would be very surprised if it went higher,) and then of course with a deteriorating market, they would potentially be in a position to be gazundered again even lower come the new year which is probably the earliest they could hope to be at the point of exchange with a new buyer.

I can’t help but respond to some of the points and criticisms made in this thread.

Perhaps the most surreal comment. No I didn’t feel guilty that the legacy my vendors vendor has left to their children is now smaller. I only feel the need to provide for my own kin.

The withdrawal of child benefit hadn’t really affected the affordability of the transaction as my mortgage was simply based on my wages however, it would be reckless if I didn’t re-examine long term financial commitments that I am about to make if my circumstances change. In addition to this before ultimately committing to the transaction why wouldn’t I assess again if I still feel it is offering value for money? Seems perfectly reasonable to me.

Being a tradesman I am naïve in business, you’re right, my experience of these matters is from books and television. However whilst I am clearly off a few peoples Christmas card list I doubt I was ever on them. I don’t buy houses often enough and I wouldn’t have thought my vendor sells them often enough.

Also Government handouts don’t pay or even contribute to my childrens upkeep. As a higher rate tax payer even when in receipt of CB and taxcredits I am a net contributor by a significant margin.

So whilst I fully appreciate what I have done to these people is utterly ruthless, at a stroke I took two and a half years off my mortgage term which for my family is fantastic. I am obviously very pleased but this has been a particularly angst ridden couple weeks and buying (or in fact selling) in a falling market is very stressful. Even with this reduction I have no doubt that the house will be worth less in a years time, I don’t intend to sell but in a falling market your inclination is to try and wait for the bottom. Unfortunatley for us, our journey renting has had a few shyster landlords and letting agents which pushed us into buying. Also I worry that whilst in my position now my substantial savings enable me to buy a house, if I lost my job all they would do is stop me receiving any benefits whereas once I am a homeowner should I lose my job the DHSS will pay the mortgage.

I apologise for the rambling post we have been celebrating…….Let the outraged squealing commence……..

milliebear00001

A few points -

Worrying about what your house will be worth in a year is pointless. The value only becomes important when you want or need to sell it! Very like share value in fact.

Homeowners do not get their mortgage paid - they get the interest paid, after 13 weeks' unemployment. The interest allowance is linked to the Bank of England Base rate, so not good news if you've taken out a fixed rate with a higher rate. I would make sure you are taking out Mortgage Protection cover rather than relying on the state covering it.

I hope you enjoy your new home, and that your vendors enjoy theirs. Let's hope they haven't left you any 'surprises' for moving in day...

citizen11

milliebear00001 wrote: »

A few points -


Homeowners do not get their mortgage paid - they get the interest paid, after 13 weeks' unemployment. The interest allowance is linked to the Bank of England Base rate, so not good news if you've taken out a fixed rate with a higher rate. I would make sure you are taking out Mortgage Protection cover rather than relying on the state covering it.

I am interested in this reply. As you may have guessed I am a little guilty of over analyzing things and I have considered this in detail. I couldn’t come up with a valid reason to buy payment protection insurance.

• We are single income household, so I lose my job means no income so we would be entitled to support for mortgage interest (SMI)

• All of our loan would be covered by the scheme, it is <200k and no remortgage etc.

• They say they only pay the interest in actual fact they will pay a rate set by the bank of England relating to the average rate paid on mortgages by households. If this is higher than the rate you pay the balance goes towards paying off arrears or capital repayments. I have secured a term tracker rate 1.69% above base rate. 1.69% is likely to be smaller than the margin on average household rate for some time, I believe they are now coughing up at 3.08%? So in actual fact they would probably be paying off my loan. All I need is 13 weeks mortgage payments on deposit.

• They do not put a charge on your home or anything. You haven’t got to pay it back!

• They don’t pull the rug from under you for 2 years! Which is double most insurance policies.

Is the above logic flawed? I hope it is because quite frankly it makes you look forward to being a homeowner then getting thrown out of work and spending two years chilling out with the family. Sounds too good to be true.

I understand if my spouse was working and only one of us lost our job we wouldn’t get any help, if that income wasn’t sufficient to support us then we would have to sell up. If we became dual income we would buy payment insurance.