Martin's Blog - thank you!

angeldeelite

Have just read this week's blog entry, regarding martin's crazy mate taking on an interest only mortgage because it's about time he owned property.

Can i just say a huge thank you to Martin for writing this. I'm going demented right now with my boyfriend who is insistent that we HAVE to own our on home. Of course, he brushes over the small details such as he is a full time student and i only earn £16k a year, on top of having about £1500 in savings but around £4k of debt. Icing on the cake being we live in one of the most expensive cities in Scotland where a one bedroom flat would be at least £85-£90k.

I feel under so much pressure to own my home because as he says "renting is just throwing money away" and "we'll make money on the profit". Everything revolves around owning our own home and according to him is the biggest priority in our lives (of course it is being just 22 and 24 years old! :rolleyes: )

So MArtin, i have emailed him your blog (he has your book so is well aware of how knowledgable you are) in the hope that he can see some sense in what you say? I am also going to arrange an appointment with a mortgage advisor, invite partner along, just to prove how ridiculous our situation is and to prove once and for all we will never get a mortgage for £90k without a decent deposit or a ridiculous repayment scheme.

Today i am setting myself free from the pressures of buying a house and will concentrate on saving and paying off debt over the next 2 years. :T :T :T

sorry for the rant but this blog has made my day

lynzpower

you might also want to send your fella a few links to some of the more livlier threads over on the property board. If they dont put him off the idea- nothing will!

angeldeelite

unfortunately, he is doing estate management at university so his dream job is to make money by selling property therefore its always in his head.

hopefully one of his tutors will talk some sense into him when they get on to costs

climbgirl

Yes, I had a very similar conversation with my housemate before she jumped in and bought a house - 100% mortgage, interest only, repayments double what she was paying in rent. She just didn't get that she was effectively renting from the bank, that she didn't actually own her house. Or that even if house prices did rise (which isn't guaranteed), that all houses would go up, not just hers. So she'd need more than the equity she made to buy a new place.

There is a real need in the UK to own your own property, seemingly at any cost. It's not healthy!

lady_fuschia

Oh god tell me about it!
I've had so many people (supposedly older and wiser!) lecturing OH and me that we need to buy a home (despite being in debt, studying and earning very little) because renting is just throwing my money down the drain. I've given up trying to explain!

jak

I know what you mean. I have to say i'm desperate to own my own home and being 28 i'm getting a of of pressure about it. I looked into it recently and discovered i'd pay more than double what I pay in rent at interest only if I went down that route so what's the point. Makes more sense to save the difference I reckon. Or pay off my debts- which is the option i'm taking. I doesn't make financial sense to own at interest only!

angeldeelite

it's so frustrating. My friend has just been on holiday in Germany and she said hardly anyone owns homes over there unless they are older and married.

We are being tricked into thinking owning property is the only way to make any money, and that it is so easy. That's why i want to take him to an advisor to make him see all the hidden costs. When i said it would probably be around £1.5-2k in fees to buy a house he laughed at me and told me not to be ridiculous!

Seaxwyn

Angeldeelite, stand your ground!

I rented happily until I was 37. We were able to rent flats in places we could never afford to live. I buckled to pressure when my fourth child was born and have been struggling ever since with a huge mortgage (paying interest only), in a place we only moved to because it was cheap, not because we liked it, and have been getting ever deeper in debt since then.

Home owning is a huge con, I know it gives some people a sense of security but for me it feels like a millstone.

You are very young, you should be enjoying a few years of freedom before mortgaging yourself to a bank.

Good luck, Seaxwyn

whatatwit

angeldeelite wrote:

it's so frustrating. My friend has just been on holiday in Germany and she said hardly anyone owns homes over there unless they are older and married.

We are being tricked into thinking owning property is the only way to make any money, and that it is so easy. That's why i want to take him to an advisor to make him see all the hidden costs. When i said it would probably be around £1.5-2k in fees to buy a house he laughed at me and told me not to be ridiculous!

I completely agree with you, just be careful who you go to see about this, as they may well come up with some wonderful looking plan, that looks too good to be true.
Get them to calculate repayments based upon 10% interest rates, that may well scare your OH.

You could also suggest that he buys the house (if it's such a sure fire winner) and you will rent a room off him, reduced rent for you also.....:D

elona

Angel

bf sounds very niave!
Does he know about stamp duty, surveys, solicitor's fees ,removal expenses, repairs like having to replace a boiler or water tank at over £1000 etc. etc.?

Curtains for big windows can cost £100! Not even mentioning replacing carpets or buying nice new furniture!

Hope someone can bring him down to earth for your sake.

ZTD

Look at the house you want, take 20% off its price, and calculate how long you could rent for with that money.

Twenty percent is not an unreasonable amount for prices to fall. Some doomsayers are predicting 60% :eek: