Paying the mortgage

wymondham

Hi All

Just had a good read about and the price of houses is sinking in with me. There is a newbie who is quite casually talking about getting a 300k property for their very FIRST home (it's a 50% scheme, but never the less)!

How on earth are these people:

a. Going to pay for it
b. Hope to pay it off without going into their pension years?
c. Cope when rates rise, as they will.....

I'm pretty sure if I was buying now there is no way I could even imagine finishing the mortgage - I had enough of a struggle on our 30k house and I had a good wage!

How times have changed in quite a short space of time, and I fail to see how this can be considered good (house prices rise so fast)?

chewmylegoff

wymondham wrote: »

Hi All

Just had a good read about and the price of houses is sinking in with me. There is a newbie who is quite casually talking about getting a 300k property for their very FIRST home (it's a 50% scheme, but never the less)!

How on earth are these people:

a. Going to pay for it
b. Hope to pay it off without going into their pension years?
c. Cope when rates rise, as they will.....

I'm pretty sure if I was buying now there is no way I could even imagine finishing the mortgage - I had enough of a struggle on our 30k house and I had a good wage!

How times have changed in quite a short space of time, and I fail to see how this can be considered good (house prices rise so fast)?

without wishing to be a smart@rse i expect they will make their mortgage payment once a month for 25 years...

michaels

I sold my house to FTBs for something north of 300k, SE not London - I suspect it was less than twice joint income.

JencParker

michaels wrote: »

I sold my house to FTBs for something north of 300k, SE not London - I suspect it was less than twice joint income.

So you sold a fairly average house (300k doesn't get you a lot in the SE) to a couple who were in the top 5% of earners?
How can that be representative?

michaels

JencParker wrote: »

So you sold a fairly average house (300k doesn't get you a lot in the SE) to a couple who were in the top 5% of earners?
How can that be representative?

Umm the thread started with an anecdote about an FTB buying a 300k property. I added my anecdote about how for at least one youngish London couple that sort of purchase price is not unreasonable or in any way out of reach.

wymondham

chewmylegoff wrote: »

without wishing to be a smart@rse i expect they will make their mortgage payment once a month for 25 years...

Suppose I asked for that!.... but really, do people earn that much more that they can pay 10 times the mortgage amount I did only a few years ago? scary!

CLAPTON

people are 'buying' a 300,000 property on a 50% co-ownership deal?

so needs to fund 150,000
supposing they has 10% deposit then they need a morgage of 135,000

assuming 4 x salary then they need an income of under 36,000

why is this amazing for a couple?

JencParker

CLAPTON wrote: »

people are 'buying' a 300,000 property on a 50% co-ownership deal?

so needs to fund 150,000
supposing they has 10% deposit then they need a morgage of 135,000

assuming 4 x salary then they need an income of under 36,000

why is this amazing for a couple?

But they have to afford the rent on top of that, so it is not just the mortgage repayments they are paying. Rental charges in London, at least, can double the cost. And... it also assumes that anyone buying is a couple. The worst affected are single people. The rot set in when unmarried couples were given tax relief and could pool their salaries - this led to house prices increasing, and since then, apart from the highest earners, two salaries are required.

PS - Are banks lending x4 times salary now?

Goldiegirl

When I was working at a large lender dealing with mortgage applications on a regular basis, it was quite eye opening to see what some people earned.

I suppose I look at things from a different perspective as mortgages were something that I dealt with every day, but a FTB couple in London or parts of the south east buying at property for £300,000wouldn't raise any eyebrows with me.

We had customers applying for mortgages of over £1m ..... Even that figure was just considered all part of the days work. The only people that got excited about it were people very new to the job role.

CLAPTON

JencParker wrote: »

But they have to afford the rent on top of that, so it is not just the mortgage repayments they are paying. Rental charges in London, at least, can double the cost. And... it also assumes that anyone buying is a couple. The worst affected are single people. The rot set in when unmarried couples were given tax relief and could pool their salaries - this led to house prices increasing, and since then, apart from the highest earners, two salaries are required.

PS - Are banks lending x4 times salary now?

yes, there is a school of thought that women should stay at home and not count economically but I think that is somewhat of a minority view nowadays

JencParker

CLAPTON wrote: »

yes, there is a school of thought that women should stay at home and not count economically but I think that is somewhat of a minority view nowadays

I wasn't talking about women staying at home so you can - but how the repercussions of that now affects single people - could you be more patronising? Or are you suggesting that everyone should be in a long term relationship?