Should we Gazunder???

FATBALLZ

While I don't agree with what you've done thanks for not being scared off and returning to tell us the outcome, it's always interesting to hear how these things turn out.

milliebear00001

If you are a single-income household, I would suggest you are even more in need of cover. You will be able to claim mortgage interest payments up to the current amount of 3.63% at the moment, so you may be able to put money towards your capital now. You would need to meet all other living expenses from means tested benefits - in essence, tax credits and income support/JSA - all of which are in the firing line/under threat, and all of which are about to start dwindling in real-term value. The danger of a tracker of course, is that if rates go up, you might find the mortgage interest benefit doesn't cover you nearly well enough.

The real problem with being reliant on state handouts of course, is that Governments can whip the rug out from under you whenever they please...as many are about to find out.

citizen11

milliebear00001 wrote: »

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.

Absolutely agreed but just as sellers were greedy on the way up, buyers are greedy on the way down. If the amount of money I can spend stands still the quality & location house I can buy is improving every day which why timing is important.

citizen11

milliebear00001 wrote: »

If you are a single-income household, I would suggest you are even more in need of cover. You will be able to claim mortgage interest payments up to the current amount of 3.63% at the moment, so you may be able to put money towards your capital now. You would need to meet all other living expenses from means tested benefits - in essence, tax credits and income support/JSA - all of which are in the firing line/under threat, and all of which are about to start dwindling in real-term value. The danger of a tracker of course, is that if rates go up, you might find the mortgage interest benefit doesn't cover you nearly well enough.

The real problem with being reliant on state handouts of course, is that Governments can whip the rug out from under you whenever they please...as many are about to find out.

But why? If I have PPI that will pay the mortgage any surplus and my benefits would be adjusted accordingly. If I don't have PPI, SMI pays the mortgage and I live on benefits.



Either way my day to day living expenses, apart from mortgage payment, are met by benefits as I would be out of work.

Having read the leaflet it suggests that SMI will respond to changes in bank rate as quickly a lender would. Seems to me in a scenario where you would be entitled to SMI, like mine would be, a term tracker mortgage is the most appropriate as you needn't insurance your payments. There by saving you money.

By the way it is not an "up to" 3.63% the pay it at a flat rate. You got 200k loan, they'll give the bank over 7 grand a year to service for you.

milliebear00001

citizen11 wrote: »

But why? If I have PPI that will pay the mortgage any surplus and my benefits would be adjusted accordingly. If I don't have PPI, SMI pays the mortgage and I live on benefits.



Either way my day to day living expenses, apart from mortgage payment, are met by benefits as I would be out of work.

Having read the leaflet it suggests that SMI will respond to changes in bank rate as quickly a lender would. Seems to me in a scenario where you would be entitled to SMI, like mine would be, a term tracker mortgage is the most appropriate as you needn't insurance your payments. There by saving you money.

By the way it is not an "up to" 3.63% the pay it at a flat rate. You got 200k loan, they'll give the bank over 7 grand a year to service for you.

But you can purchase cover for over an above just your mortgage repayment. Your outgoings now are presumably much higher than you would receive in benefits?

My point remain that whatever you would get now, may not remain the case for very long. Benefits are subject to reductions and replacement - a purchased and contracted policy can at least be replied upon for the duration of its term. What would happen if you were made redundant, claimed benefits and then had one/two/more of those benefits reduced or removed altogether?

For example, my OH claims several disability related benefits. They form a significant propertion of our income. We are always aware however, that they could be removed/reduced pretty much at the drop of a hat.

milliebear00001

citizen11 wrote: »

Absolutely agreed but just as sellers were greedy on the way up, buyers are greedy on the way down. If the amount of money I can spend stands still the quality & location house I can buy is improving every day which why timing is important.

Timing is always of the utmost importance - trouble is, nobody knows whether the timing is optimal until the moment has gone! That's why investment managers are paid a shedload of money to make just that decision on behalf of thousands of investors in shares!

I would say the difference here is that a house is not an investment, although clearly, not everyone would agree with that!

shirlgirl2004

citizen11 wrote: »

I am genuinely surprised at such an emotional response from everybody. How can a transactions that involves hundreds of thousands of pounds and loans which stretch out until forever be anything but business like?

In principle, I would do business with anyone who has finance. Not having finance though would disqualify you.

Would you sell a house to someone cheap because you liked them?

Yes we did and it was more than 10k as well. Money isn't everything. I'd rather be a good person than have cash in the bank.

milliebear00001

citizen11 wrote: »

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.

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.

An additional point - not sure what you do job-wise, but assuming you are a normal employee, pay normal NI and were made redundant, you would be expected to claim contributions based JSA. This would disbar you from claiming mortgage interest benefit which is reliant on you being in receipt of a 'gateway', means-tested benefit, such as income support. Contributions-based JSA means a delay of 6 months before you switch to income-based JSA, at which point, you become eligible for mortgage interest benefit (and other means-tested benefits) - subject to the 13 week delay of course.

citizen11

milliebear00001 wrote: »

An additional point - not sure what you do job-wise, but assuming you are a normal employee, pay normal NI and were made redundant, you would be expected to claim contributions based JSA. This would disbar you from claiming mortgage interest benefit which is reliant on you being in receipt of a 'gateway', means-tested benefit, such as income support. Contributions-based JSA means a delay of 6 months before you switch to income-based JSA, at which point, you become eligible for mortgage interest benefit (and other means-tested benefits) - subject to the 13 week delay of course.

Wow, that is quite a revelation to me, much appreciated.

citizen11

milliebear00001 wrote: »

An additional point - not sure what you do job-wise, but assuming you are a normal employee, pay normal NI and were made redundant, you would be expected to claim contributions based JSA. This would disbar you from claiming mortgage interest benefit which is reliant on you being in receipt of a 'gateway', means-tested benefit, such as income support. Contributions-based JSA means a delay of 6 months before you switch to income-based JSA, at which point, you become eligible for mortgage interest benefit (and other means-tested benefits) - subject to the 13 week delay of course.

If I became unemployed wouldn't my spouse have to claim income based JSA there by entitling us to claim SMI after 13 weeks?