Am i crazy? - rolling the dice?

shaunhouse

Thanks scotbot, think I just had abit of a wobble last night reading various things.

I'm at 90% going ahead, there's just a small element of doubt.

chappers

shaunhouse wrote: »

Yes agreed, I might be over thinking this one, just worried if rates go up and house prices go down we will struggle to keep the roof over our heads and it will lead to stress.

Are you serious, you have a 50% LTV money in the bank and by the sounds of it a half decent business.
House prices going down will have no bearing on a house you already own, with regards to your security of tenure
Interest rates are going to rise and in my opinion pretty imminently, but I cant see more than very modest rises and very slowly and cautiously at that.
You have I would say more than covered that with the fix you have taken on, the rate the bank have offered you should give you some indication of what they think will happen to rates over the next 5 years, i.e. they don't think rates are likely to get above the one they have offered you, barring serious changes in the economy.
Most people would give their eye teeth to be in as secure a position as you are.

Crashy_Time

shaunhouse wrote: »

And do you predict the same again crashy? Or do you think in my case where I have a 50% deposit and funds to spare that I could perhaps ride the storm as I plan to live in the house for a very long time?

Depends where interest rates go, or whether we get deflation and a recession that impairs your earning ability. Your previous over-payment rate puts you way ahead of the majority of the mortgaged population in terms of your ability to service debt anyway, so you would have plenty of company if you did become homeless! You could just start over-paying again straight away if you wanted to hedge your bets a bit that way? The discount implies to me though that there is something wrong with the house, or that the seller is a major kite flyer who now believes a big crash is coming.

Dorian1958

You are going to spend a lot of money so you are right to reflect upon this very important decision which will have a major impact on your life. You are in A very strong position, and as you are not planning to move, providing you get a long term fix you are reducing your risks. The only time you lose money is when you sell, paper losses are irrelevant.

gycraig_2

House prices are only a problem when you come to sell a house. If you don't plan to move within 5 years I can't really see any issue

Crashy_Time

Dorian1958 wrote: »

You are going to spend a lot of money so you are right to reflect upon this very important decision which will have a major impact on your life. You are in A very strong position, and as you are not planning to move, providing you get a long term fix you are reducing your risks. The only time you lose money is when you sell, paper losses are irrelevant.

That could be the new Mantra that replaces "Buy Buy Buy, Houses only go up"!

ThePants999

With a 50% LTV, the only circumstances under which you lose your house are circumstances in which most of the country joins you.

chappers

Crashy_Time wrote: »

it would have been better if they had just let the correction happen IMO.

We wouldn't have been the economy is faltering we would have been kicked over the edge, our fairly buoyant housing market and hoiuse building programme is a major part of the economy keeping it's head above water.

The housing market was what was sacrificed in the 1990s. the economy was relatively strong prior to that and the housing market was over heated due to interest rate cuts which were being used to keep the pound lower against the big currency in Europe at the time, which was the Deutsch Mark, when we joined the ERM we were tied to Germany's high interest rates which in turn killed the housing market. The slump was further exaggerated by high unemployment.
When we were kicked out of the ERM the housing situation stabilised

We now have better mechanisms to control all of our markets including the housing market. Mainly the independent power the BoE has to respond to changing conditions and whilst unemployment is low there is no need to squeeze the housing market.

shaunhouse

Nothing wrong with the house, survey came back great. Owners husband has died, she is in her 70s. Wants a quick sale and I had approached them months ago about the house to buy privately and she contacted me and I've got in there before estate agents.

She purchased for 410k in 2012. Prior to that is sold for 365k in 2007.

Debtslayer

If you can comfortably afford the repayments and you still have a healthy amount in savings then go for it. You are getting a good mortgage rate for your 5 year fix and during that time save as much as you can so when the 5 years is up you can pay a good chunk of it off if you needed to