About to buy a house...

Davesnave

evansc1 wrote: »

In fairness, no one expected anything other than a remain victory.

A large number of Brexit campaigners didn't really think this would happen.

And you went round, door to door, to ascertain this personally?

I think a large number of Brexit campaigners in and around London may have felt it was a lost cause, but if they were in other regions of England, the feedback from friends and colleagues would have been quite different.

Clutterfree

kez84 wrote: »

I guess we will just have to sit tight and see what happens! We are not planning to reduce our offer on the property we want to buy so I suppose I just have to hope our buyer has the same morals as us! Scary times.

Same here.
We also hope those below us in the chain feel the same because we are 7 weeks in now. There are 4 below us and it only takes the first to reduce and then we will have the domino effect.

mrtickle

Clutterfree wrote: »

Same here.
We also hope those below us in the chain feel the same because we are 7 weeks in now. There are 4 below us and it only takes the first to reduce and then we will have the domino effect.

Let me get this right. This is a money SAVING forum, and you're upset that you will very likely now save a lot of money?

Wow.

Bossworld

mrtickle wrote: »

Let me get this right. This is a money SAVING forum, and you're upset that you will very likely now save a lot of money?

Wow.

Is it that simple? I tried to do the worst case scenario maths earlier and when you take LTV bands into account, taking a 10k cut on a 135k sale seems to hit higher up the chain much harder. Could be completely wrong but based on:

Sell at 135, buy at 250. Assume you have 35k of of equity, some savings and want 75% LTV.

Your mortgage is for 187,500, you have to find £27,500 out of your savings.

If you drop your sale price to 125, and the vendor agrees to drop to 240k.

Your mortgage is 180,000, you then have to find 35,000 worth of savings, a 7.5k increase in cold hard cash unless you're willing to take a higher LTV.

I know you'd probably expect a bigger chunk off the higher priced house but it really doesn't seem as simple as bumping the problem further up the chain?

Hopefully I'm missing something fundamental here (and not just the fees etc.).

jimbog

david171 wrote: »

We are buying at the moment and although not in a chain either side, we have decided we are not going to agree to proceed without a price reduction. Although this isn't our forever home

How close are you to exchanging?

ixwood

Be careful about listening to "advice" or comments on here.

The HPC (House Price Crash) losers are amazingly even more desperate than usual and are making stuff up on here and elsewhere, hoping they can panic people and might finally get the economic disaster they've been wanting after 15 years of being wrong and paying a BTLer's mortgage for him:-

http://www.housepricecrash.co.uk/forum/index.php?/topic/210288-game-changer-brexit-house-prices-merged/?p=1102973274

mrtickle

Bossworld wrote: »

Is it that simple? I tried to do the worst case scenario maths earlier and when you take LTV bands into account, taking a 10k cut on a 135k sale seems to hit higher up the chain much harder. Could be completely wrong but based on:

Sell at 135, buy at 250. Assume you have 35k of of equity, some savings and want 75% LTV.

Your mortgage is for 187,500, you have to find £27,500 out of your savings.

If you drop your sale price to 125, and the vendor agrees to drop to 240k.

Your mortgage is 180,000, you then have to find 35,000 worth of savings, a 7.5k increase in cold hard cash unless you're willing to take a higher LTV.

I know you'd probably expect a bigger chunk off the higher priced house but it really doesn't seem as simple as bumping the problem further up the chain?

Hopefully I'm missing something fundamental here (and not just the fees etc.).

What you are missing - yes, fundamental! - is that both prices will drop by the same proportion. Re-do your calculations with the same percentage discount off both houses, not a flat 10k off your house yet still only the same flat 10k off your next house. If you are trading up, the "rungs" of the so-called ladder get closer together and you borrow less and you save money.

HTH

ps. I don't understand your phrase "bumping the problem". It's not a problem for you. You have saved a huge chunk of money. This is a money saving forum. You have to take your own purchase in isolation. You are not responsible for the hypothetical millionaire at the top of the chain who owns outright, is downsizing and not borrowing anything, after keeping unearned gains in his house bought 20 years ago, losing a tiny proportion of his unearned gains. It should not be part of your decision. He's still raked in a fortune either way. Save your money.

The "domino effect" - your words - is a good thing. It means that every single transaction in the chain saves money, which remember means double that in total mortgage payments over many years to a bank, except the single one at the very top who is not your problem. It's called a market. You're talking about thousands and thousands of pounds back in homeowner's pockets to spend in the wider economy to benefit all of you and local businesses - money that would have otherwise gone to the banks.

Clutterfree

mrtickle wrote: »

Let me get this right. This is a money SAVING forum, and you're upset that you will very likely now save a lot of money?

Wow.

It wouldn't save me any money.
The house we are buying is only £5k more than we are selling for (it's larger but needs lots of work) so any reductions would cancel each other out but cause lots more paperwork this far into the process.

The house we are buying is still worth the same to us that it was 2 days ago.

However, if I was a FTB I would feel differently but then I would have waited until after the referendum before offering because things were uncertain.

Bossworld

mrtickle wrote: »

What you are missing - yes, fundamental! - is that both prices will drop by the same proportion. Re-do your calculations with the same percentage discount off both houses, not a flat 10k off your house yet still only the same flat 10k off your next house. If you are trading up, the "rungs" of the so-called ladder get closer together and you borrow less and you save money.

HTH

ps. I don't understand your phrase "bumping the problem". It's not a problem for you. You have saved a huge chunk of money. This is a money saving forum. You have to take your own purchase in isolation. You are not responsible for the hypothetical millionaire at the top of the chain who owns outright, is downsizing and not borrowing anything, after keeping unearned gains in his house bought 20 years ago, losing a tiny proportion of his unearned gains. It should not be part of your decision. He's still raked in a fortune either way. Save your money.

The "domino effect" - your words - is a good thing. It means that every single transaction in the chain saves money, which remember means double that in total mortgage payments over many years to a bank, except the single one at the very top who is not your problem. It's called a market. You're talking about thousands and thousands of pounds back in homeowner's pockets to spend in the wider economy to benefit all of you and local businesses - money that would have otherwise gone to the banks.

By saying 'bumping the problem further up the chain', I mean that a reduction at the bottom end of the chain is (in your explanation) turning into a higher priced impact further up it, and I don't know how the vendors higher up the chain would react to something they may not see as their problem? Sorry in this example I've given, it's selling to FTB, and buying from someone who is either moving in with family or going into care, rather than escalating all the way to a £1m property in a multi-part chain.

I've redone the maths based on percentages, speaking of which I think I'm getting hung up on LTV more than the mortgage amount which probably explains it. :beer:

So your 250k purchase becomes 231,481. If you want to keep 75% LTV for a better rate than 80%, your mortgage decreases to 173,611, originally 187,500. So the mortgage total is for less.

But, in the example I've given, your equity has fallen by 10,000, and therefore you've got to find an additional £5370 cash towards your deposit, to maintain that 75% LTV?

I guess the higher LTV is nullified with the monthly saving on the mortgage, but as above I don't know how realistic asking for 20k off an agreed price is - no one will know for the foreseeable future.

bugbyte_2

Busted!

The OP is deliberately ramping down market sentiment.

Clicky to House price crash where the OP discusses the idea then links to their post here.