House ownership - Selling yourself into a lifetime of servitude

JonnyBravo

debtistheft wrote: »

Do you think that return is adequate for the amount of money you have to invest?

The majority of the population presumably do. Doesn't really matter if you disagree with them.

FTBFun

JonnyBravo wrote: »

The majority of the population presumably do. Doesn't really matter if you disagree with them.

Based on this thread I'd say it reinforces them being correct.

debtistheft

JonnyBravo wrote: »

The majority of the population presumably do. Doesn't really matter if you disagree with them.

Lets close down all the debate forums then.

SandC

debtistheft wrote: »

It never fails to amaze me when I see this startement. People just seem to forget about the tes, perhaps hundreds of thousands of pounds of dead money they have invested in their homes.

Question: "Would it be cheaper to rent your home if you had a 100% interest only mortgage?"

Answer: "Well, no it would be the same I guess if you include the mantenance costs and buildings insurance".

Question: "If you own 50% of the house, would the mortgage be less than half of what you would pay in rent?"

Answer: "why yes! Thats my point, I am paying less than half in rent".

Question: "If you put that 50% house equity into shares that paid an income and you paid that income towards your rent, would it not reduce your rent by half?"

Answer: "Why yes, I hadn't thought about that!"

Question: "If the housing market crashes, will that 50% equity be worth less?"

Answer "Why yes, it would, but then the stock markets can crash too!"

Question "Did you realise that if you invest money you can diversify into different shares, some of which will actually rise in a recession"

Answer: "No I didn't, I thought the only way to invest was to put the bulk of my entire fortune into a single asset, such as a house".

Question: "Is it easy for you to access the money in your equity?"

Answer "Why no, I would have to remortgage to 'borrow' back my own money! Or I would have to sell up at great expense and inconvenience!

It's not a 'fortune'. It's my home. I would not want to 'borrow' back - the house can be sold to pay for nursing home fees if necessary, otherwise it will be part of my estate.

Did you know buildings insurance is about £100 per year? Maintenance costs have still not come to what I would have paid in rent over the past 5 years, on top of the mortgage.

What is this obsession with interest only that you have? I have a repayment mortgage. It will be fully paid for in 2020 at the latest.

Why would you put 50% of your equity into shares if it was a 'bad' idea to buy a house in the first place? You'd never have that equity if you rented like you are saying is the best idea.

debtistheft

ukcarper wrote: »

Well the answer is it would be cheaper because landlord is adding his profit. So if you add insurance and maintenance it’s the same. So where is the renter going to get this money to invest.

Well, thats your answer. It doesn't follow that you are right.

ukcarper

debtistheft wrote: »

Well, thats your answer. It doesn't follow that you are right.

More chance than you being right though.

CAN1976

debtistheft wrote: »

Do you think that return is adequate for the amount of money you have to invest?

If I owned my house right now

value of house = 100k
rent saved every month = 600 (7200 / yr)

return = 7.2 %, risk free and un taxed.

Yh I'd take that

debtistheft

CAN1976 wrote: »

If I owned my house right now

value of house = 100k
rent saved every month = 600 (7200 / yr)

return = 7.2 %, risk free and un taxed.

Yh I'd take that

Do £100k houses really rent for £600pm around your location? Could you please provide a rightmove link showing this comparison?

How long will it before you own your house? How much will you have invested in it when you have finally paid it off?

debtistheft

SandC wrote: »

It's not a 'fortune'. It's my home. I would not want to 'borrow' back - the house can be sold to pay for nursing home fees if necessary, otherwise it will be part of my estate.

Did you know buildings insurance is about £100 per year? Maintenance costs have still not come to what I would have paid in rent over the past 5 years, on top of the mortgage.

What is this obsession with interest only that you have? I have a repayment mortgage. It will be fully paid for in 2020 at the latest.

Why would you put 50% of your equity into shares if it was a 'bad' idea to buy a house in the first place? You'd never have that equity if you rented like you are saying is the best idea.

What if you need the money for some reason? You will have the greater part of your wealth invested in a manner that prevents you from easily accessing it.

Is building insurance just £100, really? For all types of housing, for all locations?

Paying Interest only mortgages is comparable to paying rent, the difference is that you are paying to a bank and I am paying to a landlord. The repayment part of your mortgage is comparable to me investing in the stock market, the difference is that you are reducing your debts and I am increasing my wealth.

Your last paragraoph makes no sense so I cant respond.

CAN1976

debtistheft wrote: »

Do £100k houses really rent for £600pm around your location? Could you please provide a rightmove link showing this comparison?

How long will it before you own your house? How much will you have invested in it when you have finally paid it off?

3 bed semi to rent

http://www.rightmove.co.uk/property-to-rent/property-29653252.html

3 bed semi to buy

http://www.rightmove.co.uk/property-for-sale/property-29181217.html

The value is a little higher than I thought (128000), so make the returns 5.6%, still risk free and tax free