MSE News: Home ownership dream dwindles for young renters

[Deleted User]

Gorgeous_George wrote: »

A validated rent book should be accepted as proof of budgetability when lenders consider making a mortgage offer. If you can prove that you have paid £650 per month in rent there is little excuse for not allowing a 100% mortgage with a £500 repayment over 35 years or to the age of 65.

See, this makes sense to me. Me and Mrs B are paying £575 in rent quite comfortably, so a 25-year £100k 100% mortgage should be fine for us... but Mr Bank he say no

franklee

billbennett wrote: »

See, this makes sense to me. Me and Mrs B are paying £575 in rent quite comfortably, so a 25-year £100k 100% mortgage should be fine for us... but Mr Bank he say no

Have you had a play with the mortgage calculator:
http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#result

A 100000 repayment mortgage over 25 years at 4.8% gives you a monthly repayment of £573 per month. Now 4.8% is pretty low. Yet with that you still want a 100% mortgage? It's just not a viable risk. If you had a decent deposit of at least 20% it'd may well be different but even then you'd need to budget interest rates of at least 6% in future IMO, a 6% bank base rate being a fairly average rate and not even really high. The bank is being sensible

The_K_Man

iwannabeonthebeach wrote: »

I get cross with statistics like this. Me and my partner bought our first house 18 months ago, I was 23, just, and he was 25. We saved our !!!!!! off for years. We made a conscious decision not to drink/go out excessively/buy the latest gadgets etc and that is how we managed it. People want it all and then moan when they can't have it.

Oh, get over yourself. Just because you were in a situation where you were able to save at a reasonable rate for a number of years doesn't mean it is that easy for anyone else. Consider a typical person my age (I'm 25). They will probably have student loan repayments, a difficult job market, not be able to live cheaply with parents and probably no inheritance on the way. It is pretty much impossible to save for a deposit in these circumstances. What better alternative is there to renting as cheap as they can manage under these circumstances?

tara747

billbennett wrote: »

See, this makes sense to me. Me and Mrs B are paying £575 in rent quite comfortably, so a 25-year £100k 100% mortgage should be fine for us... but Mr Bank he say no

Hmm. If you can pay your rent comfortably, why haven't you got any savings between you?? Seriously? Is your financial situation not as 'comfortable' as you say, or can you just not be bothered to save?

It baffles me that people are unable to save and yet think that they can cope with a mortgage and all the associated outgoings of owning a house.

HAMISH_MCTAVISH

tara747 wrote: »

It baffles me that people are unable to save and yet think that they can cope with a mortgage and all the associated outgoings of owning a house.

It's been pointed out to you on many occasions that buying is cheaper than renting for many people.

Why you still fail to understand this is beyond me.

HAMISH_MCTAVISH

franklee wrote: »

A 100000 repayment mortgage over 25 years at 4.8% gives you a monthly repayment of £573 per month. Now 4.8% is pretty low. Yet with that you still want a 100% mortgage? It's just not a viable risk. If you had a decent deposit of at least 20% it'd may well be different but even then you'd need to budget interest rates of at least 6% in future IMO, a 6% bank base rate being a fairly average rate and not even really high. The bank is being sensible

Is there oxygen on the planet you come from?

doire_2

Take no notice of Hamish. He pretends to care about FTB while at he sametime wants house prices to rise

Percy1983

doire wrote: »

Take no notice of Hamish. He pretends to care about FTB while at he sametime wants house prices to rise

He cares in the sense he wants the bank to throw money at us so we all get in over our heads and ramp prices up again.

J_i_m

I don't think there's any need to get too heated about this There's going to be a billion and one different views on this, and many will be very different, yet still often equally as valid.

My current situation is that I'm paying £650 a month rent, which on a basic month (i.e no overtime / extras) is actually over 50% of my take home pay. In addition I'm paying £114 a month council tax (I pay this, not the LL), then there's the contents insurance: £16.50, phoneline & internet: £27, Gas & electric: £56, Water: £25, then there's the stuff that's not strictly related, i.e loan repayments, car insurance, car tax, fuel, trade-union membership etc.

I have never, not even once defaulted on a payment, everything gets paid even if it means using my overdraft, which eventually gets paid back as well

Now I know that I never strictly needed to take out any loan, buy any car, take a holiday etc but that's very much a personal choice, seeing as how I always met my instalments on my loans on top of living costs, I see no reason why I shouldn't be able to survive with a mortgage of between £450-650, which what a comparable property to what I rent would cost on a mortgage assuming I would get that one is.

Yet on my basic pre tax income I can expect a mortgage of £55'000? I'm sorry but what on earth am I'm going to buy with that? A tiny bedsit in the midst of a low down estate with thugs and druggies on every corner. Well with the greatest amount of respect, no thanks.

And it shouldn't mean I have to give up all my comforts for a decade in order to be able to buy a house either

5 or 10 years living without generic treats or holidays is a actually a long time, and it's also wasting some of the prime years of your life.

woogadee2

I think people need to start awakening to the fact that regardless of whether or not they can afford to own, by submitting an application for a mortgage, the "money" (credit) is created for you, in your name, once you sign that application. That money is now lawfully yours! Of course, you're not told this by the mortgage lender. They're more than happy to keep your "credit" you just created with your signature (they can legally transfer this money to their accounts, but only after 90 days, and only if you don't claim it! - Of course we don't realise we can claim it and are never told this) And then they charge you again for this sum over a period of years.....with interest!! Interesting how mortgages can take 2 to 3 months (90 days) to come through/be accepted?! Don't take my word for it. Research it for yourselves in detail...away from the mainstream media...Interesting stuff.