Paying the mortgage

Prothet_of_Doom

Interesting.

In 1989, my mother advised me thus:

1) Buy the nicest house you can in the nicest area you can afford.
2) Your Salary will always go up, whilst the amount you owe will go down.
3) Borrow the maximum you can afford now.

If we had listened to her, we might have spent £75K and when we came to have kids, wouldn't have been able to afford it, or when the interest rate went to 15.5% we would have defaulted, but had we survived that we might now be living in a bigger house in a more expensive area, but still be paying for it.

CLAPTON

JencParker wrote: »

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?

obviously women working affects men
obviously couples affect singles
obviously couples with children affect other groups
obviously their spending patterns are different

what point are you trying to make?

are you saying it's unfair and the state should step in?

is it also unfair that people with children 'need' larger properties but can't always afford them

JencParker

Goldiegirl wrote: »

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.

Very true, but London (and G London) also has people on very average to low incomes too. The discrepancy between those on high incomes and low is not reflected in the cost of housing. Of course, there will be those that say if you can't afford it move elsewhere and London should only be for the wealthy high earners, but then who is going to supply the essential services where salaries are not high?

CLAPTON

JencParker wrote: »

Very true, but London (and G London) also has people on very average to low incomes too. The discrepancy between those on high incomes and low is not reflected in the cost of housing. Of course, there will be those that say if you can't afford it move elsewhere and London should only be for the wealthy high owners, but then who is going to supply the essential services where salaries are not high?

let the market correct the situation

if there are acute shortgage of nurses / police / teachers / clearners / shop workers / utility workers etc that can afford London prices then the wages (or equivalents ) of those workers will rise and/or rich people will flock out of London because of the lack of basic security or facilities.

HAMISH_MCTAVISH

JencParker wrote: »

Very true, but London (and G London) also has people on very average to low incomes too. The discrepancy between those on high incomes and low is not reflected in the cost of housing. Of course, there will be those that say if you can't afford it move elsewhere and London should only be for the wealthy high earners, but then who is going to supply the essential services where salaries are not high?

How do you propose housing in short supply be rationed if not through price?

Would you prefer waiting lists, or a lottery?

michaels

JencParker wrote: »

...
PS - Are banks lending x4 times salary now?

I am in process of remortgaging at 5x from a mainstream lender, standard mortgage (IO and no official repayment vehicle beyond the 'plan to downsize on retirement' and MEWing but that will probably frighten you even more), no broker involved. So yes 4x income is not difficult.

JencParker

michaels wrote: »

I am in process of remortgaging at 5x from a mainstream lender, standard mortgage (IO and no official repayment vehicle beyond the 'plan to downsize on retirement' and MEWing but that will probably frighten you even more), no broker involved. So yes 4x income is not difficult.

Not frighten me, just illustrates even more that lending increasing amounts fuels house price increases as more money is available to buy.

Out of interest, why are you opting for an IO mortgage rather than a repayment one? (also thought those had been stopped for homebuyers too).

HAMISH_MCTAVISH

JencParker wrote: »

Not frighten me, just illustrates even more that lending increasing amounts fuels house price increases as more money is available to buy.

How do you propose housing in short supply be rationed if not through price?

Would you prefer waiting lists, or a lottery?

michaels

JencParker wrote: »

Not frighten me, just illustrates even more that lending increasing amounts fuels house price increases as more money is available to buy.

Out of interest, why are you opting for an IO mortgage rather than a repayment one? (also thought those had been stopped for homebuyers too).

Two reasons, I can earn more interest on the borrowed money than it is costing me to borrow it so maxuimising the amount outstanding maximises my profit and also having a pool of liquid funds available will let me take advantage of any potential profit making opportunities that might arise.

wotsthat

michaels wrote: »

Two reasons, I can earn more interest on the borrowed money than it is costing me to borrow it so maxuimising the amount outstanding maximises my profit and also having a pool of liquid funds available will let me take advantage of any potential profit making opportunities that might arise.

If you're on IO without a repayment plan you must be a debt junkie living in fear of the time the ticking time bomb goes off. The usual suspects will blow a gasket if they find out that some people actually think before making financial decisions.

I'm finding the margin between my overpayment savings and mortgage is so low that I'm seriously considering...gulp...paying off some debt!