House Price Crash Discussion Thread

J_i_m

There is that...

However, I feel that sometimes people focus too much on the amount they ultimately pay, sometimes people have" £££ signs" in their eyes and for what? Now... I suppose if you're on a comfortable wage and are able to have a shorter term mortgage (and also over pay etc) then you have scope for savings whether that's for your personal enjoyment or if you want to leave behind some kind of inheritance for your children, all that is ok if you can get it.

It's not the same for everyone though, most people (like myself) it had to be said aren't blessed with high earning and hence aren't able to afford the higher monthly outgoings of a shorter term mortgage.

In my position I'd have to balance desire for a lower ultimate cost of my home with what I can actually afford to pay each month today. After all a saving of £x realisable sometime in x years time, isn't paying my bills of today is it?

So yeah, sure it's a tad depressing looking at a loan statement and realising that in-spite of having already been paying it off for some years, you've barley even paid the interest and still have most of the original balance left to settle.. but ultimately that's not important. What is important to me is that I'm able to pay all my bills (including the mortgage/loan repayments) and live comfortably without being constantly overdrawn.

Ultimately I'd be far more comfortable ending up paying £200'000 for a house even though I only bought it for £100'000 (figures randomly made by the way) if it meant that in the meantime I could afford to actually live.

I want to be able to do the things I like doing now, I want to indulge in hobbies, I want to go on holidays, I want cash for nice things. I don't want to put these things on hold for 10/15 years simply to pay off a mortgage faster, though for obvious reason's I would want to have paid it off by the time I retire, which the way government keeps on increasing the retirement age, will probably be never

geraint85

I'd never consider more than 25 years for a mortgage. Ideally i'd like 15 or even 10 years.

but what if you couldn't afford the monthly bill at the 25 year repayment period.. personally, i'd never consider taking any mortage out for under 25 years.. if you want to pay it back quicker, then why not just over pay on your mortage? at least then you're not obligated to pay a high amount each month, and so if one day you find yourself in financial hardship, you can just pay the minimum payments, which would be considerably cheaper than the 10 year mortage...

Stovin

How long do you think it will be before house prices might start increasing again?

IveSeenTheLight

Stovin wrote: »

How long do you think it will be before house prices might start increasing again?

It will be largely dependant on your area and the factors that surround that area.

Don't get too caught up with the UK average and lose sight of your local area.

J_i_m

I must say that having played around with this tool I may well be dreaming in cuckoo land if I think I'd get a mortgage on a property of 130k any time soon.

Working on my current income it tells me I'd be lucky to get between 60-80k, and then there's the fact that my income is likely to drop somewhat

I may well have to review my hopes & expectations, maybe be forced to drop the having a garage idea, and even consider a slightly less appealing area.

Still, that's no reason to not aim for what I want, if just to be wary that it might actually be out of my range of affordability and either increase the deposit saving plan or settle for a far cheaper property.

Thrugelmir

J_i_m wrote: »

I must say that having played around with this tool I may well be dreaming in cuckoo land if I think I'd get a mortgage on a property of 130k any time soon.

Working on my current income it tells me I'd be lucky to get between 60-80k, and then there's the fact that my income is likely to drop somewhat

Then its a matter of personal choice. As you said previously.

I want to be able to do the things I like doing now, I want to indulge in hobbies, I want to go on holidays, I want cash for nice things.

debtistheft

geraint85 wrote: »

but what if you couldn't afford the monthly bill at the 25 year repayment period.. personally, i'd never consider taking any mortage out for under 25 years.. if you want to pay it back quicker, then why not just over pay on your mortage? at least then you're not obligated to pay a high amount each month, and so if one day you find yourself in financial hardship, you can just pay the minimum payments, which would be considerably cheaper than the 10 year mortage...

If your struggling to pay your repayment mortgage over a 25 year period then maybe you need to buy a cheaper house, or wait until house prices fall enough. If you are desperate to own at any cost, then get an interest only mortgage. Lots of people who cant really afford a house go down that route. Lots of people also get repo'd tho.

calrest

The Canadian Real Estate Association (CREA)says about positive forecasts for the following period. According to the update, sales activity in Canada is expected to reach 441,100 units this year. Although this represents a 1.3 per cent decrease from 2010, it is still a slight improvement from the 1.6 per cent decline forecast in February, as activity in British Columbia was stronger than expected in the first quarter of 2011. CREA also expects national sales activity to rise by 2.6 per cent to 452,500 units in 2012.

“Home buyers expect mortgage interest rates to rise and are mindful of their current and future debt levels. They’re doing their homework to better understand how their mortgage payments and family budget might change down the road before they make an offer,” Gary Morse, the President of CREA explained.

Thrugelmir

calrest wrote: »

The Canadian Real Estate Association (CREA)says about positive forecasts for the following period. According to the update, sales activity in Canada is expected to reach 441,100 units this year. Although this represents a 1.3 per cent decrease from 2010, it is still a slight improvement from the 1.6 per cent decline forecast in February, as activity in British Columbia was stronger than expected in the first quarter of 2011. CREA also expects national sales activity to rise by 2.6 per cent to 452,500 units in 2012.

“Home buyers expect mortgage interest rates to rise and are mindful of their current and future debt levels. They’re doing their homework to better understand how their mortgage payments and family budget might change down the road before they make an offer,” Gary Morse, the President of CREA explained.

Fascinating post. Though of little relevance to the UK property market.

cosmica76

Definitely I agree with your view.

J_i_m wrote: »

There is that...

However, I feel that sometimes people focus too much on the amount they ultimately pay, sometimes people have" £££ signs" in their eyes and for what? Now... I suppose if you're on a comfortable wage and are able to have a shorter term mortgage (and also over pay etc) then you have scope for savings whether that's for your personal enjoyment or if you want to leave behind some kind of inheritance for your children, all that is ok if you can get it.

It's not the same for everyone though, most people (like myself) it had to be said aren't blessed with high earning and hence aren't able to afford the higher monthly outgoings of a shorter term mortgage.

In my position I'd have to balance desire for a lower ultimate cost of my home with what I can actually afford to pay each month today. After all a saving of £x realisable sometime in x years time, isn't paying my bills of today is it?

So yeah, sure it's a tad depressing looking at a loan statement and realising that in-spite of having already been paying it off for some years, you've barley even paid the interest and still have most of the original balance left to settle.. but ultimately that's not important. What is important to me is that I'm able to pay all my bills (including the mortgage/loan repayments) and live comfortably without being constantly overdrawn.

Ultimately I'd be far more comfortable ending up paying £200'000 for a house even though I only bought it for £100'000 (figures randomly made by the way) if it meant that in the meantime I could afford to actually live.

I want to be able to do the things I like doing now, I want to indulge in hobbies, I want to go on holidays, I want cash for nice things. I don't want to put these things on hold for 10/15 years simply to pay off a mortgage faster, though for obvious reason's I would want to have paid it off by the time I retire, which the way government keeps on increasing the retirement age, will probably be never