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Should we stretch ourselves now fo long term gain?
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Crashy_Time wrote: »I would say you are a few years out on "1990", no one thought property was a great bet again until at least the late 90`s in my recollection, and the problem arises if you need to sell during crashes, and if you over-borrowed and interest rates spike (happening now) The "house for life at a low fixed rate" is not going to work for everyone.
Perhaps you can tell us how well you've done so the OP can judge your advice in that context?
I own a very nice house, have no mortgage at 50 and hope to retire at 55. Not being smug but think the OP should know as some of those who catastrpophise and take no risks have nothing at all.
My strategy was simply repayment mortgage (maybe a little stretch at the beginning), pension from day 1, sensible amounts of insurance for the situation (which actually means not everything but pick and choose), savings contingency and diversified assets.
Crashy will say I was "born at the right time" but in fact the first property that we bought in 1991 dropped in value which wasn't aan issue (as it isn't in most cases), and I would say "time not timing" and fortune generally favours those who take risks rather than those who aren't willing to take any.0 -
Perhaps you can tell us how well you've done so the OP can judge your advice in that context?
I own a very nice house, have no mortgage at 50 and hope to retire at 55. Not being smug but think the OP should know as some of those who catastrpophise and take no risks have nothing at all.
My strategy was simply repayment mortgage (maybe a little stretch at the beginning), pension from day 1, sensible amounts of insurance for the situation (which actually means not everything but pick and choose), savings contingency and diversified assets.
Crashy will say I was "born at the right time" but in fact the first property that we bought in 1991 dropped in value which wasn't aan issue (as it isn't in most cases), and I would say "time not timing" and fortune generally favours those who take risks rather than those who aren't willing to take any.
Not sure how your individual circumstances relate to todays property market and economic/political climate, or make your views on those areas any more valid than mine, OR make you seem very keen on shooting down viewpoints that say the market is heading for a correction (you are after all very satisfied with your property buying record?) Maybe you can tell us? Buying into a property bubble without haggling for significant discounts with rates rising and the government of the country heading for breakdown isn`t "risk taking" it is just silly. The good news is that most people will need some kind of mortgage, and the banks are not going to allow them to take the risk at present price levels0 -
Not sure how your individual circumstances relate to todays property market and economic/political climate, or make your views on those areas any more valid than mine,
I disagree. I would much rather ask advice from someone who'd done well especially if they came with no advantages rather than someone who'd done very badly.OR make you seem very keen on shooting down viewpoints that say the market is heading for a correction (you are after all very satisfied with your property buying record?)
I am very happy that I now own a nice property and can live rent free for 40 years and easily downsize to release cash (and whatever happens to the market there is a guarantee of equity).without haggling for significant discounts
Where did I say don't get a good deal?
Of course people should get the best deal they can.with rates rising and the government of the country heading for breakdown isn`t "risk taking" it is just silly
No I don't think were heading for a breakdown.The good news is that most people will need some kind of mortgage, and the banks are not going to allow them to take the risk at present price levels
So you're not going to tell us how badly you've done then?0 -
I disagree. I would much rather ask advice from someone who'd done well especially if they came with no advantages rather than someone who'd done very badly.
We don't know whether there is going to be a correction (no-one does) but I am saying short term movements are not that important and that doing nothing through fear can be a really bad move.
I am very happy that I now own a nice property and can live rent free for 40 years and easily downsize to release cash (and whatever happens to the market there is a guarantee of equity).
Where did I say don't get a good deal?
Of course people should get the best deal they can.
If really stretched get a fixed rate.
No I don't think were heading for a breakdown.
Good. I am a strong propenent of sensible financial planning and I said stretch a little not a load.
So you're not going to tell us how badly you've done then?
So obviously you have many eggs in the house price basket and don`t want to see a correction in prices, that comes across in all your posts actually. Would you say someone in a mortgaged house, or even a bought and paid for one, who can`t afford to fix the roof has done "well", or "badly", would you say someone in a rented property who has many years living expenses saved/invested and who gets the landlord to fix the roof has done "well" or "badly"? There are many levels in between, but most media, most sensible people agree that houses are due a price correction by any sensible economic measure, and that certainly seems to annoy certain posters on here!0 -
So obviously you have many eggs in the house price basketand don`t want to see a correction in prices
Actually I would like things to be better for younger generations but I'd prefer a levelling off than a crash to prevent hardship.Would you say someone in a mortgaged house, or even a bought and paid for one, who can`t afford to fix the roof has done "well", or "badly"would you say someone in a rented property who has many years living expenses saved/invested and who gets the landlord to fix the roof has done "well" or "badly"?
I actually decided NOT to buy recently a my salary sacrifice scheme at work allows me 45.8% tax and NI relief so it make more sense to fund my pension, so you have to compare with the LOST opportunity cost i.e. the alternatives.
I rent myself (as you might know) because it makes sense for my circumstances.
So it isn't as black and white as ownership=good, rent=bad.
I am a renter too.There are many levels in between, but most media, most sensible people agree that houses are due a price correction by any sensible economic measure
I challenge you put up how well you've done and if you don't we'll all draw our own conclusions (as many have already).
I challenge you to put up SENSIBLE evidence of your statement i.e. not articles from the daily hate, shelter, london banking bonus territtory etc.
Sensibly argued and different views from mine don't annoy me.
Scaremongering and lack of evidence and unwillingness to state credentials is a little bit boring but people will draw their own conclusions.0 -
As above, I would be tempted to make as few house purchases as possible. If the small house will be inadequate in 5 years, then get the bigger alternative.
Long-term the house prices are not likely to fall in popular areas; short term may or may not be an issue if you and your partner fall out during a slump. Even if your house value did drop, it wouldn't be much of an issue if you're not needing to move.
We bought our place for 340 - if it was valued tomorrow at 160 I would not be bothered.0 -
OP: I'd stretch yourself as far as you're comfortable.
Your salaries are going to rise, you can over-pay the mortgage to get it down if necessary, and if you are planning on staying put for a while, you don't have to care about house prices going up or down or sideways.
The only thing I would say is that I wouldn't stretch myself for a larger property in a worse area. If I had to give away a bedroom, say, to get a nicer area for the same price, that's a calculation I'd consider long and hard.
The old "buy the worst house on the best street" thing certainly rings true.0 -
Personally I would just buy what you need for your current and near future situation. House prices have started to fall nationally and a higher value house will fall more than a low value one.0
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As above, I would be tempted to make as few house purchases as possible. If the small house will be inadequate in 5 years, then get the bigger alternative.
Long-term the house prices are not likely to fall in popular areas; short term may or may not be an issue if you and your partner fall out during a slump. Even if your house value did drop, it wouldn't be much of an issue if you're not needing to move.
We bought our place for 340 - if it was valued tomorrow at 160 I would not be bothered.
A large number of people would be, they would be very bothered, but many still wouldn`t understand how it could happen.0 -
Incorrect, I have a diversified global portfolio so I am not highly invested in any particular asset class or region.
It doesn't matter long term for people buying a home and I don't think they should try to time the market, call a bubble or try to catch a falling knife.
Actually I would like things to be better for younger generations but I'd prefer a levelling off than a crash to prevent hardship.
As a strong propenent of sensible financial planinng I would say that's bad because forseeable expenses like houshold maintenance should be budgetted for. Indeed unforseeable expenses should be budgetted for. It's called contingency.
It depends really on how expensive the rent is compared with ownership and whether they have a need to be economically mobile and what else they are doing with the money.
I actually decided NOT to buy recently a my salary sacrifice scheme at work allows me 45.8% tax and NI relief so it make more sense to fund my pension, so you have to compare with the LOST opportunity cost i.e. the alternatives.
I rent myself (as you might know) because it makes sense for my circumstances.
So it isn't as black and white as ownership=good, rent=bad.
I am a renter too.
I disagree with that statement.
I challenge you put up how well you've done and if you don't we'll all draw our own conclusions (as many have already).
I challenge you to put up SENSIBLE evidence of your statement i.e. not articles from the daily hate, shelter, london banking bonus territtory etc.
Sensibly argued and different views from mine don't annoy me.
Scaremongering and lack of evidence and unwillingness to state credentials is a little bit boring but people will draw their own conclusions.
IMO you spend far too much time on the property forums here not to be heavily emotionally invested in property, and dare I say it, high property prices. Most people will draw their conclusions from what they see around them (Transactions falling, interest rates rising globally) and on what they hear from the media (BOE projecting 30% house price falls after a poor exit from the EZ etc.) not from the conclusions of a few people on the internet who want/need high prices about another person on the internet who thinks that house prices are due a good crash0
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