Hope is not an Effective Financial Strategy

greent

shangaijimmy said:

 We moved into this house in 2006 taking advantage of all those lax money lending protocols that ultimately led to lots of people getting into trouble 3 years later. There is no way in the current mortgage climate that we would have gotten the money. Reminding ourselves of that figure makes us both feel sick, and ultimately has been our major motivating factor. Its certainly a statistic that resonates with Mrs SJ.

We bought this house in Oct 2005 (so a similar time to you) with a mortgage of £130k - I remember doing the lending interview (with the member of the bank staff who is now our literal next door neighbour ) and them saying that the 'computer said yes' to up to £297k - at that point we had 2 children and I was working p/t and was going on maternity leave (and not returning to my job) for child #3 - how they thought we'd afford 297k mtge payments is beyond me!!! I was horrified even at the time!

badmemory

At least you had an income.  Back in 1990 (so 30yrs) I got a mortgage on this house with no income at all, no job about to start, no benefits, no guarantor, nothing.  Thank you Lancastrian.  The reason I got it was I had just over 60% deposit.  I only had a total of 8 months where I didn't overpay, but they didn't know that that was going to happen.  My parents came with me because they were sure they were going to have to act as guarantors.  It shows how things change over the years.  I remember back in the 60s my father having to act as guarantor for my aunt.  The big joke - she was earning more than him & had no dependants & he had my mother & 2 kids.  But hey she was a woman, just because she was holding down a good long term job meant nothing!  Then people wonder why I get stroppy about women's rights.

Suffolk_lass

badmemory said:

At least you had an income.  Back in 1990 (so 30yrs) I got a mortgage on this house with no income at all, no job about to start, no benefits, no guarantor, nothing.  Thank you Lancastrian.  The reason I got it was I had just over 60% deposit.  I only had a total of 8 months where I didn't overpay, but they didn't know that that was going to happen.  My parents came with me because they were sure they were going to have to act as guarantors.  It shows how things change over the years.  I remember back in the 60s my father having to act as guarantor for my aunt.  The big joke - she was earning more than him & had no dependants & he had my mother & 2 kids.  But hey she was a woman, just because she was holding down a good long term job meant nothing!  Then people wonder why I get stroppy about women's rights.

At that time no woman could get a mortgage without a guarantor - and it was still legal for a man to beat his wife(!!!) I still feel mildly indignant when young women today patronise me about feminism. They mostly have no idea how far we have come in the last 100 years. I remember reclaim the night marches in the 1970s (some triggered by the Yorkshire Ripper, some tied in with the Erin Pizzey refuge in Richmond). Of course I was very young then...

I also recall how slack and lax financial controls became, but also how much we struggled to get money together. So much debt - at one time, we owed more on credit cards than DH's mortgage. What did we do? we bought the upstairs flat (!) and trebled the mortgage and then doubled it again after seven years, then added half as much again - up to £230k two months before DH lost his contract. Nightmare. All gone now. There is light Jimmy - and those little plate-scrapings are crucial.

Loving the £70k and £60k in-sight way-markers

turtlemoose

Ha, another one here who lied to get their first mortgage...glad it's not just me! 2007, and it was a 100% mortgage as well. I cringe now when I think how badly it could have gone wrong!

Karmacat

turtlemoose said:

Ha, another one here who lied to get their first mortgage...glad it's not just me! 2007, and it was a 100% mortgage as well. I cringe now when I think how badly it could have gone wrong!

Of course its not just you though I have to tell you it was my second mortgage: I had a normal office job in London, and bought a little flat in Waltham Forest (for £15250!!!).  As a young single woman, it was difficult to get the mortgage, but I was working with figures in those days, and showed them what was what, that one was all above board. 

The one I lied to get, I had a £10k deposit because of the flat, which I'd sold a year previously; I was temping as a typist while I  retrained, and then after a few months I could get the lodgers in - this was in Brighton, where that arrangement is really common.  The house cost £52k, it went "up in value" to £70k within a year, and when the big crash came in the late 80s, it never crashed below the value at which I'd bought it.  That *was* luck, actually!

Jimmy, sorry for the hijack  

shangaijimmy

Loving where this has veered to!

We bought this house in Oct 2005 (so a similar time to you) with a mortgage of £130k - I remember doing the lending interview (with the member of the bank staff who is now our literal next door neighbour ) and them saying that the 'computer said yes' to up to £297k - at that point we had 2 children and I was working p/t and was going on maternity leave (and not returning to my job) for child #3 - how they thought we'd afford 297k mtge payments is beyond me!!! I was horrified even at the time!

We never got to the stage of asking how much we could get thankfully, or Mrs SJ may have said lets go bigger then!!! Our interest situation never got to the 16% levels that my parents regale, but I do remember that first year of being in the house and the rate went up every quarter! We were young and blissfully unaware of consequence then, but looking back now and listenning to all our fellow 'truth benders' you can certainly see why it all went wrong for so many.

We're on the path of the righteous now .... 

greent

I was only asking for 130k so there was no need for them to tell me I could have more than double that - thankfully I was super sensible and horrified enough at 130k (to buy a house then costing 278k) - my kids will start off needing a mortgage bigger than that just for a starter home, most likely! (2 bed terrace here like our first house (bought for 42k in 1991) is about 180k)

shangaijimmy

greent said:

I was only asking for 130k so there was no need for them to tell me I could have more than double that - thankfully I was super sensible and horrified enough at 130k (to buy a house then costing 278k) - my kids will start off needing a mortgage bigger than that just for a starter home, most likely! (2 bed terrace here like our first house (bought for 42k in 1991) is about 180k)

'Super sensible' - wise move!!
I shudder to think of what our kids will have to pay for a house in another 15yrs, and I can't even imagine if they end up moving down South!

Little happening financially till this week. Mrs SJ gets paid on Friday so we're in a holding pattern till then. That will be our last payday before Christmas. Although it makes little difference as thanks to budgeting Christmas is all accounted for anyway. Mrs SJ car goes for MOT on Friday. so the familiar annual car anxieties start to build!

Suffolk_lass

"Although it makes little difference as thanks to budgeting Christmas is all accounted for anyway." Essence of money saving, sprinkled liberally over little treats and surprises (as Nigella might say, if she were not making the next million from her book...)

shangaijimmy

You know Christmas is nearing in our house when I walk in and Mrs SJ is drinking a snowball and watching Nigella!!!

Final payday before Christmas lands tomorrow perfectly in time for Mrs SJs MOT. We think the brakes will need doing, so I'm resigned to a repair bill! I can honestly say that cars are least favourite thing! I'm so glad that I was never one for cars. My current car was 9yrs old when I got it. 42k miles on the clock, back seats never sat in! I only paid £2k for it and have had it approaching 4yrs now. I reckon I'll get another 6yrs at least out of it!