Any other home buyers in NI?

motorguy

qwert_yuiop wrote: »

As I said before, all you can be sure of is that it's a better time than before. Any statement that "prices can only rise" and all that estate agent talk is only speculation.

No, noone is saying "prices can only rise", we are saying there are clear indications, based on market trends, market analysis and economic changes that prices "may" rise.

tara747

motorguy wrote: »

No, thats not what i was saying. I was saying that every penny in mortgage payments came off the amount owed. Amount owed = amount borrowed plus interest due, as opposed to rental payments over the same time, which relatively speaking is dead money.

The amount owed is usually more than 2x the capital. Ouch. :eek:


Interest is also dead money, by your definition.


It's strange that some people call rent 'dead money'. As I see it, it's a payment for a roof over my head, same as mortgage interest.

To take that rationale to its (il)logical conclusion...

Food is also dead money - you have nothing to show for it after it's eaten.

Petrol/diesel is dead money - you have nothing to show for it after you've used it up.

Going to the cinema is dead money - once you've watched the film that's it.

Perfume is dead money - you spray it on and the smell disappears after a few hours.

A haircut is the ultimate dead money - you come out of the salon with less hair than you went in with! :rotfl:

marathonic

It looks like 600 less Northern Ireland based people on unemployment benefits based on todays report:

http://www.bbc.co.uk/news/uk-northern-ireland-26256293

I imagine a large proportion of these are 'potential house purchasers who would have previously stood no chance in qualifying for a mortgage'.

Add to this the fact that it's the 12th consecutive drop and you'll still get people say that they see no fundamental reason why house prices should rise.

marathonic

tara747 wrote: »

The amount owed is usually more than 2x the capital. Ouch. :eek:

In some cases, if you are on an interest rate of 6.5% over the term - who on earth do you expect to fall into this category?

Also, how much would you expect a £100,000 house today to be worth at the end of the 25-30 year term during which you've paid "2x the capital" initially borrowed?

Most people who fear interest rates will go for a 5-year fixed rate at 3%. After this, a lot of capital is paid down and they can fix for a further 5 years - at a rate that I'm willing to bet will be significantly below 6.5%.

qwert_yuiop

Anyone who hasn't lost the will to live could check out the bbc report today showing no rise in the fourth quarter. I could provide a link if I had sufficient interest.

tara747

marathonic wrote: »

In some cases, if you are on an interest rate of 6.5% over the term - who on earth do you expect to fall into this category?

Also, how much would you expect a £100,000 house today to be worth at the end of the 25-30 year term during which you've paid "2x the capital" initially borrowed?

Most people who fear interest rates will go for a 5-year fixed rate at 3%. After this, a lot of capital is paid down and they can fix for a further 5 years - at a rate that I'm willing to bet will be significantly below 6.5%.

6.5%?

According to the BBC mortgage calculator, if you borrow £100,000 at 5% over 30 years, you'll pay back £195,000.

Also, you won't pay back much of the capital in the first 5 years of a 30-year mortgage, I'm afraid.

And what of the poor souls who fixed for 5 years in 2007, bet their remortgaging options weren't too good in 2012. :eek:

As for how much will the £100,000 house be worth after 25 years - it depends on when it was bought. Many of the boom purchasers here won't see their houses worth what they paid for a couple of decades.

qwert_yuiop

marathonic wrote: »

In some cases, if you are on an interest rate of 6.5% over the term - who on earth do you expect to fall into this category?

Also, how much would you expect a £100,000 house today to be worth at the end of the 25-30 year term during which you've paid "2x the capital" initially borrowed?

Most people who fear interest rates will go for a 5-year fixed rate at 3%. After this, a lot of capital is paid down and they can fix for a further 5 years - at a rate that I'm willing to bet will be significantly below 6.5%.

Only God knows this sort of stuff. Got any tips for Leopardstown or the lotto? Mystic Marathonic

marathonic

tara747 wrote: »

6.5%?

According to the BBC mortgage calculator, if you borrow £100,000 at 5% over 30 years, you'll pay back £195,000.

I worked off a 25-year mortgage - and probably should have worked it over a 20 year term to make your outgoings more comparable to the cost of renting.

You do realise that it's not a choice between a cash buy or a 30-year term. The bank will happily lend you money over 25, 20 or 15 year terms too?

Also, you won't pay back much of the capital in the first 5 years of a 30-year mortgage, I'm afraid.

In a 25-year term mortgage fixed for 5-years at 3%, you'll have less outgoings than a renter AND have paid off 15% of the capital. Those figures don't strike too much fear into me.

And what of the poor souls who fixed for 5 years in 2007, bet their options weren't too good in 2012. :eek:

Ah, you shouldn't buy now because prices were higher in 2007. If a brand new BMW 3 Series comes on the market now for £5,000, would you avoid buying it just because people were paying £30,000 for it 7 years ago? We're not in 2007 anymore. You'd do well to avoid comparisons to then.

As for how much will the £100,000 house be worth after 25 years - it depends on when it was bought. Many of the boom purchasers here won't see their houses worth what they paid for a couple of decades.

It seriously never ceases to amaze me how difficult a time people are having when trying to understand that it's now 2014, not 2007.

I think we'll agree to disagree. As stated previously, people should do their own numbers - most people who follow this excercise will come to the same conclusions as I have.

motorguy

tara747 wrote: »

The amount owed is usually more than 2x the capital. Ouch. :eek:

Yes. it is. However its money paid towards owning an asset.

Clearly buying with cash is everyones preference, however not yet having the cash gathered up to buy is a very different reason for not purchasing than "market conditions are not good".

As i said, i'm very glad you've cleared that up for us in the last couple of pages, as there did seem to be an intimation that your reasons for not buying were because you were reading the market in a particular way, not just because you didnt have the money yet.

tara747 wrote: »

Interest is also dead money, by your definition.

Not by that definition no. Interest paid towards owning an asset is not the same as paying rent on something you'll never own.

tara747 wrote: »

It's strange that some people call rent 'dead money'. As I see it, it's a payment for a roof over my head, same as mortgage interest.

Its dead money because at no time will you ever own the house. Its not yours. It never will be.

tara747 wrote: »

To take that rationale to its (il)logical conclusion...

Food is also dead money - you have nothing to show for it after it's eaten.

Petrol/diesel is dead money - you have nothing to show for it after you've used it up.

Going to the cinema is dead money - once you've watched the film that's it.

Perfume is dead money - you spray it on and the smell disappears after a few hours.

A haircut is the ultimate dead money - you come out of the salon with less hair than you went in with! :rotfl:

All of these are examples of spending money to achieve a goal. Rental payments, relative to the goal of owning a property is dead money. Why pay £600 to rent something long term when you can use that £600 a month to own it?

You dont "rent" food, or perfume or fuel, or a haircut, so clearly your analogy is very wrong - or your grasp of basic concepts.

motorguy

marathonic wrote: »

most people who follow this excercise will come to the same conclusions as I have.

Clearly not though.

Theres very clear indications that more people are buying, the economy is recovering and there is movement in the housing market.

Your "exercise" that has led you to conclude you're not buying "today" is because the right house isnt yet available. Thats a very different "exercise" from examining the market conditions and deciding if the market has bottomed out.

As i said, i am glad the Bears on this thread have actually admitted that they have personal reasons not to buy, rather than that market conditions arent right.