Will they ever learn?

kingstreet

The problem is not the foreseen, it's the unseen or unconsidered.

In my experience, those who have problems with high loan to value mortgages on newbuild find;-

- a job loss
- an unexpected pregnancy
- relationship breakdown
- increased mortgage rates

are the things which tip the fine balance into a problem with negative equity and inability to sell, at an inconvenient time of life.

You must plan for such eventualities and avoid having to sell the property in the short-term at a lower price.

demontfort

You're actually quite wrong. - Afraid not I'm bang on the money after all I'm not one going to the governemnt with a begging bowl

A lot of people are ready to make a financial commitment but what they lack is capital which is not easy to come by in this day and age. In other words they are making a financial commitment for something they cannot afford and based on their risk profile the banks don't want to lend to them. I'd like to buy a Ferrari but can't afford one right now that's life.

I will use my example to show you what I mean. Me an my wife have a joint income of £50k with no dependents. We have been renting for a few years and have been paying in the range of £700-£800 per month on rent alone. We live a very fulfilling and enjoyable life. Maybe your lifestyle is why you haven't saved up enough cash and expect the government to bail you out. You are young, healthy adults with good jobs jointly earning far above the average national wage so why should you get a massive handout.

We feel it is the right time to buy a house and start a family however we lack capital required for a deposit. Your problem not the taxpayers, learn to manage your finances before starting a family and buying a house.


Using he HTB scheme we would be putting down 5/10% deposit plus 20% from the government (interest free for 5 years), and need a mortgage of 75%. Upon calculations with our mortgage advisor the monthly repayments for our mortgage would be £735. This is £15 cheaper then our current rent payment. Again your problem not the taxpayers

If we were to add a payment of around £60 after 5 years for the loan (we plan to save and pay 20% of it before the 5 years anyway) and taking into consideration the fact that we would have paid some of our mortgage in that time as well the repayment would not go over £800. Do you not think it is better that we own a home and pay the mortgage on it rather then pay it for someone else by renting (not to forget extortionate letting agency fees etc)? It depends sometimes renting makes more financial sense. Remember when you take out a mortage you are effectively paying to rent out the money you borrow, then factor in service charges, maintenance, decline in the value of new builds and the opportunity loss of not being able to invest your deposit money and it will not be so clearcut.

But whatever you choose it's a personal decision and one you should take full responsibility for and not rely on government subsidies. But if they are daft enough to offer you the money then you should take it.

opinions4u

Radiantsoul wrote: »

I think the debate board is probably a more appropriate place to post this sort of thing.

Possibly.

But it's totally relevant to the mortgage market.

The livelihood of those who sell mortgages.

The dreams of those who want to own their own homes.

The fears of those who have seen governments and others create a finance bubble that always ends in disaster!

So perhaps, with the exception of the last item, this is as good a place as any.

namiku

demontfort wrote: »

You're actually quite wrong. - Afraid not I'm bang on the money after all I'm not one going to the governemnt with a begging bowl

A lot of people are ready to make a financial commitment but what they lack is capital which is not easy to come by in this day and age. In other words they are making a financial commitment for something they cannot afford and based on their risk profile the banks don't want to lend to them. I'd like to buy a Ferrari but can't afford one right now that's life.

I will use my example to show you what I mean. Me an my wife have a joint income of £50k with no dependents. We have been renting for a few years and have been paying in the range of £700-£800 per month on rent alone. We live a very fulfilling and enjoyable life. Maybe your lifestyle is why you haven't saved up enough cash and expect the government to bail you out. You are young, healthy adults with good jobs jointly earning far above the average national wage so why should you get a massive handout.

We feel it is the right time to buy a house and start a family however we lack capital required for a deposit. Your problem not the taxpayers, learn to manage your finances before starting a family and buying a house.


Using he HTB scheme we would be putting down 5/10% deposit plus 20% from the government (interest free for 5 years), and need a mortgage of 75%. Upon calculations with our mortgage advisor the monthly repayments for our mortgage would be £735. This is £15 cheaper then our current rent payment. Again your problem not the taxpayers

If we were to add a payment of around £60 after 5 years for the loan (we plan to save and pay 20% of it before the 5 years anyway) and taking into consideration the fact that we would have paid some of our mortgage in that time as well the repayment would not go over £800. Do you not think it is better that we own a home and pay the mortgage on it rather then pay it for someone else by renting (not to forget extortionate letting agency fees etc)? It depends sometimes renting makes more financial sense. Remember when you take out a mortage you are effectively paying to rent out the money you borrow, then factor in service charges, maintenance, decline in the value of new builds and the opportunity loss of not being able to invest your deposit money and it will not be so clearcut.

But whatever you choose it's a personal decision and one you should take full responsibility for and not rely on government subsidies. But if they are daft enough to offer you the money then you should take it.

I can see that your problem biggest problem is selfishness.

You're saying the government is not helping me so why should it help anyone else?

SavingPennies_2

There are some irritatingly smug and patronising posts here.

Edit: Also in response to above £25k each is not "far above the national wage". I believe the average is £26k..

demontfort

Selfish = Honest and Fair. Why should the government waste money helping out people who are in a position to manage by themselves but too impatient to save up for a deposit. There are far more deserving cause than FTBs.

Patronising and Smug = Direct and Blunt. Don't even know what this fella is going on about, I think he needs a dictionary.

saverbuyer

SavingPennies wrote: »

There are some irritatingly smug and patronising posts here.

Edit: Also in response to above £25k each is not "far above the national wage". I believe the average is £26k..

That's median earnings - not household income.

Two people in a house don't necessarily have jobs with median earnings. Household earnings are much less than 2 times median single earnings.

SavingPennies_2

I'm not a "fella". I think your post came across as patronising and smug.

hamster2013

namiku, i think what he is saying that he disagree's with the goverments policy and not that its helping him v/s someone else.

Obviously, the OP is in a good financial position today - he is not in the asking situation, so it allows him to pass judgement easier.

Eventhough I agree that the current situation is going back to preparing a next subprime type crisis, there have been some major changes in the banking system:

1. increase in capital requirements of the bank - they can no longer lend as much as they want. Direct impact is that they are lending to those who they feel will be able to afford it.

2. supression, and rightfully, or self assessment - gone are the days where you could say you earn £100k a year and yet be only on £10! if you cant back it up - it is worth as much as nothing.

The stupid mistakes the goverment is making which will only cause grief to those at 95% mortgages:

1. the buy to let is mortgage free for.... 5y, then the fee increases drastically - I would ask anyone serious to do the maths at how much they would have paid in fee's over 25y, and they will understand that it is not much different then a mortgage at 3%-4%.

2. the buyers at 95% are not assessing the responsibility that comes with buying a house: all the extra costs involved.
- insurances
- maintenance (boiler, white goods, house...etc)

I just got my front door changed - cost? £1000
Had the outside repainted - cost? £1500
Got the garage roof changed because it was leaking - cost? £2000
.... boiler will probably need changing in a few years - cost? another few grands.....
so someone who has not managed to save more than 5% of a deposit in a span of 5 years, and says that the mortgage repayment is as much as the rent.... is not responsible enough to commit to a home purchase.

hamster2013

demontfort wrote: »

Why should the government waste money helping out people who are in a position to manage by themselves but too impatient to save up for a deposit. There are far more deserving cause than FTBs.

That is only your opinion.
Unless its backed by knowledge and facts that the government is trying to help FTB's and not help a whole industry - and figures that show that without the governments involvements the housing and banking industry in relation to mortgage lending would be better off - it will always remain your 'uninformed' opinion.
Obviously - my opinion is similar to your's - and i accept and agree it is uninformed as I would not be able to assess the impacts of not having the HTB... as i'm no actuary.