Any other home buyers in NI?

saverbuyer

motorguy wrote: »

Have to say, i'm quite surprised by the negativity i'm getting from a couple of individuals.

We took evasive action to protect our primary asset - our new home - by pulling together a holding pattern for our previous home, until such times as the decreasing mortgage meets the market value.

I almost feel they would feel better if I was here describing how we suffered a crippling loss and perhaps lost both homes as it "prove their point" in some way.

It is what it is, and we're out the other side of it to tell the tale. A lot of others werent so lucky.

Oh well. Nothing as queer as folk.

Again, it's not an asset. It's a lettings business. It's a liability.

The diamond example doesn't work. If I leave it in a box and put the box in a safe I have no further outgoings.

If you leave the house empty you still have to pay property tax, maintenance and insurance. There's an on-going cost that makes it a liability. You have zero ability to influence many of the costs.

But I get your reasoning and see why you kept the place. I wouldn't have because as I say, I don't need the hassle and commitment. I also couldn't be bother with the ongoing tax implications and capital gains tax to sell. It’s also an easy target for future governments and the banks.

Knowing I had 40k of negative equity, I would probably have stayed living there until I could get rid of the place or until I could afford to pay it off.

Looking at some of the best buy BTL, and 100% LTV, you would need to be getting £600 just to break even on interest only. Not worth it in my opinion.

saverbuyer

motorguy wrote: »

I almost feel they would feel better if I was here describing how we suffered a crippling loss and perhaps lost both homes as it "prove their point" in some way.

It is what it is, and we're out the other side of it to tell the tale. A lot of others werent so lucky.

Oh well. Nothing as queer as folk.

No one said that, or even implied it. I wouldn't/nor anyone else (i hope) would wish that situation one anyone.

tara747

motorguy wrote: »

Oh aye it was. It probably peaked at around £250,000 in 2007 / 2008, and dropped back sharply and quickly.

As i've said I've just checked the RV on it and it is £125,000 so i've removed the line where i said we hoped to break even in five years time, as i'd say we're there now. Mortgage is probably £105K - £110K and even if we were to get slightly under RV then we'd be in pocket.

Its a moot point though as its not for sale. Very pleased we're moving into +VE though. :beer:

RV is not a reliable guide to the value of your house. Most houses, even in 'in-demand' areas like South Belfast, are selling for less than RV, sometimes quite a bit less.

motorguy wrote: »

Have to say, i'm quite surprised by the negativity i'm getting from a couple of individuals.

We took evasive action to protect our primary asset - our new home - by pulling together a holding pattern for our previous home, until such times as the decreasing mortgage meets the market value.

I almost feel they would feel better if I was here describing how we suffered a crippling loss and perhaps lost both homes as it "prove their point" in some way.

It is what it is, and we're out the other side of it to tell the tale. A lot of others werent so lucky.

Oh well. Nothing as queer as folk.

If you're including me in that, I don't mean to come across as negative. Realistic is the tone I'm aiming for. Like I said, I wish you luck - you seem like a sensible chap.

If I'd been in your shoes, much as I'd hate to be an accidental LL, I probably would have done the same as you and rented out the first house - crystallising a £40,000 loss would be horrendous, and I've worked hard to build up my savings (see sig), so I'd hate to lose that much. I certainly won't criticise your choices.

I take no pleasure in seeing people in pain. The housing boom in NI has been hugely damaging for so many, and a tragedy for some.

saverbuyer

motorguy wrote: »

Look up the definition of Asset. A house is an asset. It is something that has value. It always has value, it cant be a negative amount. It may only be worth £1 some day if some people on here have their way - and even then they'd be waiting until it was worth 50p before they'd take the plunge - but its still an asset. It has a value. Having ongoing costs does not make it a liabilty.

A mortgage is a liability.

Of course it can have a negative value.

Yours clearly does.

(Before you jump in I know what you are saying, negative equity isn’t necessarily negative value. An asset by definition has value but yes this can be negative. Think disposal costs.)

Well of course everyone on here has endless cash flow and can pull £40,000 from their back pocket, but given that we DIDNT, as we'd just put £170,000 in cash into the cost of building our new house, what would you have done? Declared yourself bankrupt? Let them repossess it and have them take you down financially? Taken out a £40,000 loan?

No Paul. I wouldn't have put all my eggs in one property basket.

The new house took two years to build. It was started before the market crash and finished after the market crash.

The naive 'internet forum' view of well i would just have sat there wasnt an option.

I actually thought you started building after 2007. Sorry my mistake.

Yes it is worth it. Very clearly it is. We had £40,000 negative equity!!!! That wasnt going anywhere.

Now we have our rent paying out mortgage. We're a long long way towards reducing our mortgage and there are signs that house values are increasing.

Even by your 'worst case' scenario of a house being worth 30% less than RV, we've turned a £40,000 black hole into a £20,000 one.

That is a good thing. The miniscule amount of effort it takes me to be a landlord is well worth the £5,000 a year it has save me having to pay off.

Another few years and that will be a ZERO and once the mortgage is cleared we've all the value of the ASSET.

25 years is a long time. 30% isn't worst case for Craigavon, it's best case.

I imagine you "miniscule amount of effort" is alot less miniscule than other investment options.

Obviously you've done what you thought you had to do. I can see why you did it especially after having put your money into another property falling in value. It makes sense for you not to sell.

As I said, I'm not cut out for property letting.

I'd have to see your sums on the rent v's mortgage. After tax, rates and insurance you'd struggle to pay 5,000 a year. In fact I'd say it's impossible.

GlynD

motorguy wrote: »

Have to say, i'm quite surprised by the negativity i'm getting from a couple of individuals.

We took evasive action to protect our primary asset - our new home - by pulling together a holding pattern for our previous home, until such times as the decreasing mortgage meets the market value.

I almost feel they would feel better if I was here describing how we suffered a crippling loss and perhaps lost both homes as it "prove their point" in some way.

It is what it is, and we're out the other side of it to tell the tale. A lot of others werent so lucky.

Oh well. Nothing as queer as folk.

I have to agree. I think you've made the best out of a bad situation and I'm impressed by your intelligence and fortitude.

bingobangobongo

Sounds a pretty sensible solution to me motorguy.

I will soon be in a similar situation - one which I am dreading. We bought our house 7 years ago and we are probably looking at £60,000 in negative equity.

Due to an expanding family, schools, daycare and other reasons we will no doubt have to move house in the next few months.

Mortgage payments being so low has meant we have managed to save like mad the past few years and could wipe out the negative equity with some left over for a deposit for a new house.

But I would be hoping to rent our current house out (assuming we get consent to let). What other option do I have? Try and sell it and take the 60 grand hit? Would it not be worth even trying to let it out just to see how we cope as landlords?

What would you do saverbuyer? I'm genuinely interested.

saverbuyer

bingobangobongo wrote: »

Sounds a pretty sensible solution to me motorguy.

I will soon be in a similar situation - one which I am dreading. We bought our house 7 years ago and we are probably looking at £60,000 in negative equity.

Due to an expanding family, schools, daycare and other reasons we will no doubt have to move house in the next few months.

Mortgage payments being so low has meant we have managed to save like mad the past few years and could wipe out the negative equity with some left over for a deposit for a new house.

But I would be hoping to rent our current house out (assuming we get consent to let). What other option do I have? Try and sell it and take the 60 grand hit? Would it not be worth even trying to let it out just to see how we cope as landlords?

What would you do saverbuyer? I'm genuinely interested.

Put it this way. You'll need to be under 75% LTV and expected rent at 130% of mortgage payments at 7% to get a BTL mortgage to rent the place out.

Do you meet those criteria? If not it’s going to be a nonstarter if you can’t get consent to let.

Paul do you meet them or do you have consent to let?

bingobangobongo

saverbuyer wrote: »

Put it this way. You'll need to be under 75% LTV and expected rent at 130% of mortgage payments at 7% to get a BTL mortgage to rent the place out.

Do you meet those criteria? If not it’s going to be a nonstarter if you can’t get consent to let.

Paul do you meet them or do you have consent to let?

Nope - we do not meet those criteria at all. Nationwide however do not mention this criteria anywhere I can see on the Letting application section of their website. Perhaps different providers have different criteria.

They do however, add 1.5% to the cost of your current mortgage (after 6 months) - but 'exclusions apply'. I'd be interested to know how to be excluded from this 1.5% addition...

saverbuyer

bingobangobongo wrote: »

Nope - we do not meet those criteria at all. Nationwide however do not mention this criteria anywhere I can see on the Letting application section of their website. Perhaps different providers have different criteria.

They do however, add 1.5% to the cost of your current mortgage (after 6 months) - but 'exclusions apply'. I'd be interested to know how to be excluded from this 1.5% addition...

That's for temporary consent to let within the remaining period of the product. It can be removed at any time. The figures I quoted are for BTL.

Can you cover the mortgage payments of this place and the new place you want to buy at say 7% interest?

Will your earnings cover it?

bingobangobongo

saverbuyer wrote: »

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That's for temporary consent to let within the remaining period of the product. It can be removed at any time. The figures I quoted are for BTL.

Can you cover the mortgage payments of this place and the new place you want to buy at say 7% interest?

Will your earnings cover it?

Interesting...we are not in a 'product', our mortgage product ended 4 years ago and we have been tracking the base rate paying 2.5%.

I'm not sure what they would do in our situation, might be best to talk to them. Sounds like they would try and force us onto a BTL mortgage but yet we wouldn't meet the criteria to get one.

Rock and a hard place.