Achieving the Impossible (FTB)

jon557

No, DEBT is dead money.

If you rent from the bank (aka mortgage), all that interest is money you will never see again. If you are happy about that then fine.

Yes debt is dead/bad money.

Yes there is interest on a mortgage. If you rent a house for £1000pa, you never see it again. If you buy the house for £1000pm, then perhaps £200 of that is stored in the house. So it is better than renting, you should know that!!

I thought you said you used it to buy furniture. I spent £13k on my current car, I probably wouldn't again, but when I was in debt my car cost £1k. I only spend money that I have.

Yup some of it forms furniture, not a lot of it.

People have on average £1783 of savings http://www.telegraph.co.uk/finance/p...0-to-1783.html

This certainly isn't anyone I know! It must be offset by a small few with LOTS of savings.

£50k in completely dead money had I bought that, and no capital appreciation at all; that £50k has instead gone into my ISA, tax sheltered for life. Ok, the £50k in the ISA hasn't appreciated much, but at least it hasn't gone to the government!

Sure, there are fees and interests but it depends how much you spend on rent, and then consider rent for the next 10? 20? 30 years? Thats a lot of money!

jon557

Perhaps if I summarise this in a different way..

Imagine this...

Person A:
Income: £39,800
Debt: £0
Money for deposit: £6,500

With a good credit history do you think that person would get a 95% mortgage?

I'm willing to bet so, they are some comfortable figures.

Well, those figures are me. My income (minus my monthly debt contribution).

jon557

I hope you've got some really supportive family and friends around you to pick up the pieces when you come crashing back down to earth with a BAM!

I sense you are petrified of loans because you don't know how they work. I've had a few loans before and moved when I find better rates. As long as you have income and spare cash they are not a problem, as long as you are happy with the costs of it. I always look at the cost-benefit of it.

thelawnet

jon557 wrote: »

Sure, there are fees and interests but it depends how much you spend on rent, and then consider rent for the next 10? 20? 30 years? Thats a lot of money!

I'm not considering the next 20, 30 years.

At the moment I'm considering that houses are expensive and rent is cheap. I don't see that changing in the near future.

Simples.

bodmil

jon557 wrote: »

You seem to be speaking but not listening. £12k is a small debt, it is the cost of a small car. Many people have cars on finance, so it's just like that. How can it be wrong? How can it be wrong when I got it for 9.4% in a recession? Because banks see my good credit history and consider me low risk.

Funny, I'd say the same for you. For many people, £12k would buy a huge car. Many people have cars on 0% finance and many more buy them outright. You might be blinkered into believing debts are a part of life but thankfully there are plenty of people who have learnt from the bust and don't live less than hand to mouth. You've displayed years of reckless money management just like the 'bankers' and there's a reason no one respects them!

bodmil

jon557 wrote: »

I sense you are petrified of loans because you don't know how they work. I've had a few loans before and moved when I find better rates. As long as you have income and spare cash they are not a problem, as long as you are happy with the costs of it. I always look at the cost-benefit of it.

What's to say you'll always have an income? You've got no savings buffer and next to no equity in your house, well done, you're only a step away from being one of those people you've never heard of trapped in their mortgage. Just look at the latest MSE news, house prices falling, and you're keen to jump on with no savings to your name and relying on someone living with you... hardly a sure sell judging by your approach here!

paulmapp8306

jon557 wrote: »

Perhaps if I summarise this in a different way..

Imagine this...

Person A:
Income: £39,800
Debt: £0
Money for deposit: £6,500

With a good credit history do you think that person would get a 95% mortgage?

I'm willing to bet so, they are some comfortable figures.

Well, those figures are me. My income (minus my monthly debt contribution).

Not at present. 95% LTV are practically impossible. And £12k is lots. ive never had that much - buy a car you can afford without finance.

paulmapp8306

thelawnet wrote: »

I'm not considering the next 20, 30 years.

At the moment I'm considering that houses are expensive and rent is cheap. I don't see that changing in the near future.

Simples.

Really !!!!! - i think rent is far to high.

Consider - Im in the process of buying BECAUSE its cheaper than renting. Thats been proved (in my eyes at least) as i have a mortgage AIP that will cost me £460/month. Rent on a similar property in the same area is £600-£700. Even with maintenance buying is cheaper.

The_Road_Warrior

jon557 wrote: »

Renting is dead money.

So is Interest, so how much Interest have you paid over the past few years eh?

bodmil

The_Road_Warrior wrote: »

So is Interest, so how much Interest have you paid over the past few years eh?

Surely the least of his worries if he's considering a 95% 35 year mortgage!