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30 year mortgage - much worse than 25 year?
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If it makes you feel better... I'm 38 and took a 35 yr mortgage to make sure we got the location we wanted and stretched to a 4 bed to grow into and avoid moving house... and we knew We'd be trying for kids....
2 yrs later what has happened.... baby is now 10weeks old and over paid by £500 for about 8 mths. For the rest of the time the extra cash went into savings and making lots of very necessary repairs and changes.....
New roof over front room and porch due to leak
New oven
New fridge freezer
Most doors rehung so they close properly plus new doors on some
Then redecorate door and frames due to paint chipped
Put a radiator in office
New king size bed ( put on 18 mth interest free credit)
New soffits and gutters (came up on survey)
Doors and windows all readjusted to stop drafts
Some windows replaced due to moisture trapped inside double glazing
Invested in wood burning stove in front room (best investment ever!)
Front room decorated
Nursery decorate
Sofas re stuffed
Then all the baby stuff, much of which we got second hand from step sister, plus second hand sales....
OMG I didn't realise how much we'd done!
So... be aware esp if you buy an older property like mine 1950's there will be things you don't notice when you view it. Unless you let parents or unbiased pair of eyes look at it
Once you have a mortgage for a few yrs you get used to it.... if interest rates go mental, the banks will have no choice but to change the rules, they won't be able to evict all of us on mortgages! They will just temporarily increase the term to allow us to afford it... What happened in the late 1980's?
You can do what I'm doing a put more of your long term saving I.e. Pension provision into paying off the mortgage... with the housing market as it is .... it will work out to be good if it keeps going up more than inflation and savings interest rates, plus it's tax efficient over paying a mortgage.Peace.0 -
[QUOTE
Once you have a mortgage for a few yrs you get used to it.... if interest rates go mental, the banks will have no choice but to change the rules, they won't be able to evict all of us on mortgages! They will just temporarily increase the term to allow us to afford it... What happened in the late 1980's?
.[/QUOTE]
Now that's a scary approach to financial planning..."Have nothing in your houses that you do not know to be useful, or believe to be beautiful." William Morris0 -
TickersPlaysPop wrote: ».... if interest rates go mental, the banks will have no choice but to change the rules, they won't be able to evict all of us on mortgages! They will just temporarily increase the term to allow us to afford it... What happened in the late 1980's?catshark88 wrote: »Now that's a scary approach to financial planning...
Indeed. I seem to remember a lot of repossessions, people stuck in negative equity, and so on in the early 1990s.
Spitting Image song from (I think) 1992.Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.
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Thirty years or more or interest only are all fine. The short term risks are more significant and first priority is to ensure that you have as much safety margin as you can reasonably get.
You'll also need to be doing serious pension planning at this point if you haven't been already and will need to allow for that as well.0 -
I seem to remember a lot of repossessions, people stuck in negative equity, and so on in the early 1990s.
But far fewer this time around as the banks learned their lesson.
Enlightened self interest.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »But far fewer this time around as the banks learned their lesson.
Enlightened self interest.....
Well, yes. I'm still not convinced that it's wise to take on mortgage debt that you wouldn't be able to pay in the event of rising IRs on the basis that "they will have to make it all right for me".Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.0 -
Graham_Devon wrote: »Can't you get around this by taking on a 5 year fix?
I read somewhere, think it was the telegraph, that the stress test does not count on mortgages which are fixed for 5 years.
So in effect, they only stress test 2,3 and 4 year fixes?
no under the MMR rules all mortgages are stress tested even if 10yr+ fixed come back0 -
Jack_Johnson_the_acorn wrote: »Do you have firm evidence? I don't think anyone can predict the economic future with any certainty, that's why we speculate, and make plans for all possibilities.. .
I agree regarding the economic future. As this is a totally different era to the boom years of 1991-2007. The world is a different place. With Western influence slowly waning.0 -
I didn't want to read and run. I felt similar to you, upon seeing our mortgage advisor when we bought 18 months ago he asked what sort of term we were after and I said 25 years. He then gave me the best bit of advise, make it 35 years and just overpay. That way if one of us looses our job we can reduce the payments. It's just much more flexible!0
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freeman3030 wrote: »That way if one of us looses our job we can reduce the payments. It's just much more flexible!
That's ok with those with the financial discipline. Unfortunately these days many people don't. With money simply dripping away.0
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