Northern Ireland Residential Property Price Index

saverbuyer

double (triple?) dip recession

N.I never exited the recession.

banks not lending at the level they should be

What does that even mean? Do you think banks should be forced to lend at silly multiples or to people without deposits?

Over time that will change. Economically speaking it always does.

In Japan prices have yet to recover after 15 years.

Once it starts to recover, house prices will creep up as confidence returns

What is with this confidence thing. Confidence does not pay the mortgage.

saverbuyer

marathonic wrote: »

By the way, I'm not saying that falling prices will have no impact to me.

I'm currently on a 65% LTV and a 2-year discounted mortgage. I intend to apply for a market leading 60% LTV product when the 2 years are up.

If rates were similar to today, which is unlikely, a 5-year fix would be available for 2.79% (I'm currently paying 2.9%).

If house prices fall, I'll have to save an extra £4,000 for every £10,000 drop just to get to the 60% LTV required.

When I get on the 60% LTV rate, price changes will have no impact to me.

Well done. I assume you paid down a further 10% since you bought. I thought you said you took out a 75% mortgage.

marathonic

saverbuyer wrote: »

Well done. I assume you paid down a further 10% since you bought. I thought you said you took out a 75% mortgage.

I took out a 75% LTV mortgage - the next drop with most banks is to 60% LTV which I couldn't get. First Direct do a 65% LTV product but my personal circumstances meant I was better going through Ulster Bank.

Some of my older posts refer to a 25% deposit. This is what I had prior to the renogiation of the price downwards.

The plan now is to build up an emergency fund in a cash ISA from April this year by contributing enough monthly to reach the max allowance for the tax year, i.e. £480 per month.

If, when I come to remortgage, those funds are needed to bring me to a 60% LTV, so be it.

motorguy

marathonic wrote: »

When I get on the 60% LTV rate, price changes will have no impact to me.

Surely if prices continue to drop, then you may at some point not qualify for a 60% LTV mortgage as the lowered value would rule it out?

saverbuyer

marathonic wrote: »

I took out a 75% LTV mortgage - the next drop with most banks is to 60% LTV which I couldn't get. First Direct do a 65% LTV product but my personal circumstances meant I was better going through Ulster Bank.

Some of my older posts refer to a 25% deposit. This is what I had prior to the renogiation of the price downwards.

The plan now is to build up an emergency fund in a cash ISA from April this year by contributing enough monthly to reach the max allowance for the tax year, i.e. £480 per month.

If, when I come to remortgage, those funds are needed to bring me to a 60% LTV, so be it.

But the bank sets LTV at your purchase price or valuation, whatever is lower.

Your LTV is 75% or it isn't.

marathonic

motorguy wrote: »

Surely if prices continue to drop, then you may at some point not qualify for a 60% LTV mortgage as the lowered value would rule it out?

It depends. If I take out a 60% LTV 5-year fixed rate mortgage over a 15 year term, prices would have to drop significantly over the next 5 years as I'd be paying off a signicant amount of capital.

Also, with a lower mortgage amount outstanding, the requirement for savings to make up any LTV shortfall reduces as well.

marathonic

saverbuyer wrote: »

But the bank sets LTV at your purchase price or valuation, whatever is lower.

Your LTV is 75% or it isn't.

I went for a product that allows a max LTV of 75%. My own, personal, LTV isn't 75% - it's lower.

Also, I based the 65% on valuation even though the purchase price was lower - because purchase price has nothing to do with it when remortgaging.

Obviously, the next valuation could come in lower - but you could say the same about any valuation, whether the price paid was lower, higher or the same.

marathonic

motorguy wrote: »

Surely if prices continue to drop, then you may at some point not qualify for a 60% LTV mortgage as the lowered value would rule it out?

Using a £125,000 valuation and a 60% LTV gives you a mortgage of £75,000.

That would cost £510 per month over a 15 year term on the 2.79% 5-year fixed rate mortgage.

After 5 years, the outstanding balance on the mortgage would be £53,391.

That means that prices would have to fall below £89,000 (or nearly 30%) from current levels for me to no longer qualify for 60% LTV products.

Even if this, pretty gloom, scenario were to transpire, by the time I'd no longer qualify for the 60% LTV, my mortgage would equate to about 1.7 times my own salary meaning that rate changes would have a less significant impact on my outgoings.

marathonic

A big hello to all you boys over on HPC who I see have linked to this thread.

I'd post there too but I was banned recently for suggesting that we may be nearing a bottom. Hence the reason everyone is so bearish there (BULLISH=BANNED)

qwert_yuiop

You may be right, I don't know. I suspect your belief is a rationalization and a justification for your decision, though. Surely having made your choice, all this is academic?
Meanwhile, the savers are watching prices slip.