House buying risks

Getting_greyer

MobileSaver said:

Getting_greyer said:

I guess the main risk to having a house is being unable to pay the mortgage, getting kicked out and applying for bankruptcy. 

The risk is absolutely tiny though; in the last fifty years the worst it has ever been is 0.26% of homeowners being repossessed.

Of course, if you cannot afford to pay a mortgage then you probably cannot afford to pay rent either so you'd still be kicked out of your home regardless of whether owning or renting.

Getting_greyer said:

The lesser risk is that at some point the mortgage payment becomes relatively more expensive so you have less disposable cash for other things. 

Again, if mortgages goes up then rents will too so you will have less disposable cash regardless of whether owning or renting.

The bottom line is that if things go pear-shaped a typical homeowner will generally have many more options than a renter to stay in their own home.

I don't really disagree with you. 
I'm just saying there is risk. Such as the so called mortgage prisoners have.  But if you're like me, you put head in the sand and crack on.

Sunsaru

Getting_greyer said:

MobileSaver said:

Getting_greyer said:

I guess the main risk to having a house is being unable to pay the mortgage, getting kicked out and applying for bankruptcy. 

The risk is absolutely tiny though; in the last fifty years the worst it has ever been is 0.26% of homeowners being repossessed.

Of course, if you cannot afford to pay a mortgage then you probably cannot afford to pay rent either so you'd still be kicked out of your home regardless of whether owning or renting.

Getting_greyer said:

The lesser risk is that at some point the mortgage payment becomes relatively more expensive so you have less disposable cash for other things. 

Again, if mortgages goes up then rents will too so you will have less disposable cash regardless of whether owning or renting.

The bottom line is that if things go pear-shaped a typical homeowner will generally have many more options than a renter to stay in their own home.

I don't really disagree with you. 
I'm just saying there is risk. Such as the so called mortgage prisoners have.  But if you're like me, you put head in the sand and crack on.

I wouldn't call it putting you head in the sand.
I think most people are aware of the risks and go forwards with fingers crossed hoping they are in the majority (everything works out) rather that the minority (brown stuff hits the fan).
Gotta be in it to win it.

MobileSaver

Getting_greyer said:

MobileSaver said:

Getting_greyer said:

I guess the main risk to having a house is being unable to pay the mortgage, getting kicked out and applying for bankruptcy. 

The risk is absolutely tiny though; in the last fifty years the worst it has ever been is 0.26% of homeowners being repossessed.

Of course, if you cannot afford to pay a mortgage then you probably cannot afford to pay rent either so you'd still be kicked out of your home regardless of whether owning or renting.

Getting_greyer said:

The lesser risk is that at some point the mortgage payment becomes relatively more expensive so you have less disposable cash for other things. 

Again, if mortgages goes up then rents will too so you will have less disposable cash regardless of whether owning or renting.

The bottom line is that if things go pear-shaped a typical homeowner will generally have many more options than a renter to stay in their own home.

I'm just saying there is risk. ...  But if you're like me, you put head in the sand and crack on.

Well, yes, but there's "risk" with everything you do in life; from crossing the road to starting a new relationship to renting a house to buying a house. Should you not do these things because of the risk? Are you putting your head in the sand if you do all those things knowing "the risk"?

At the end of the day, having your home repossessed is an incredibly tiny risk. Over the last 50 years it has happened to less than 0.01% of homeowners each year on average and the worst year ever was only 0.26%. In the grand scheme of things it's a real non-issue.

I guess I'm not really sure what point you are trying to make; everyone has to live somewhere and the risks are similar whether you rent or buy so it is what it is.

Getting_greyer

MobileSaver said:

Getting_greyer said:

MobileSaver said:

Getting_greyer said:

I guess the main risk to having a house is being unable to pay the mortgage, getting kicked out and applying for bankruptcy. 

The risk is absolutely tiny though; in the last fifty years the worst it has ever been is 0.26% of homeowners being repossessed.

Of course, if you cannot afford to pay a mortgage then you probably cannot afford to pay rent either so you'd still be kicked out of your home regardless of whether owning or renting.

Getting_greyer said:

The lesser risk is that at some point the mortgage payment becomes relatively more expensive so you have less disposable cash for other things. 

Again, if mortgages goes up then rents will too so you will have less disposable cash regardless of whether owning or renting.

The bottom line is that if things go pear-shaped a typical homeowner will generally have many more options than a renter to stay in their own home.

I'm just saying there is risk. ...  But if you're like me, you put head in the sand and crack on.

Well, yes, but there's "risk" with everything you do in life; from crossing the road to starting a new relationship to renting a house to buying a house. Should you not do these things because of the risk? Are you putting your head in the sand if you do all those things knowing "the risk"?

At the end of the day, having your home repossessed is an incredibly tiny risk. Over the last 50 years it has happened to less than 0.01% of homeowners each year on average and the worst year ever was only 0.26%. In the grand scheme of things it's a real non-issue.

I guess I'm not really sure what point you are trying to make; everyone has to live somewhere and the risks are similar whether you rent or buy so it is what it is.

Yes, I think what I'm saying is being lost in translation. 
 There is risk with everything just get on with your life as best suits you without handwringing about hypothetical values & rates in the future is what I'm saying.

Mickey666

Getting_greyer said:

MobileSaver said:

Getting_greyer said:

I guess the main risk to having a house is being unable to pay the mortgage, getting kicked out and applying for bankruptcy. 

The risk is absolutely tiny though; in the last fifty years the worst it has ever been is 0.26% of homeowners being repossessed.

Of course, if you cannot afford to pay a mortgage then you probably cannot afford to pay rent either so you'd still be kicked out of your home regardless of whether owning or renting.

Getting_greyer said:

The lesser risk is that at some point the mortgage payment becomes relatively more expensive so you have less disposable cash for other things. 

Again, if mortgages goes up then rents will too so you will have less disposable cash regardless of whether owning or renting.

The bottom line is that if things go pear-shaped a typical homeowner will generally have many more options than a renter to stay in their own home.

I don't really disagree with you. 
I'm just saying there is risk. Such as the so called mortgage prisoners have.  But if you're like me, you put head in the sand and crack on.

I'd far rather risk being a 'mortgage prisoner' for 25 years than being a 'rent prisoner' for my entire life and have nothing to show for it.

Crashy_Time

Getting_greyer said:

Crashy_Time said:

Salemicus said:

> The Black Swan that bursts the bubble will be a stock market/credit market event IMO

Yes, something sort of financial crisis would probably hurt house prices.

Of course, we already had one of those. Tell me, if you'd bought at the peak, just prior to the 2007-8 financial crisis, and held until now, would you have made money, or lost money?

Time in the market >> timing the market.

You shouldn`t try to "make money" from a highly illiquid asset IMO, especially one that is designed for living in and not as an investment vehicle because you would have to downsize AND time the market to actually make any money. Most recent buyers are hoping to UPSIZE not downsize. The 2007 bubble was pumped back up with zero interest rates and massive money printing, but they can`t drop interest rates again and the amount of money printing required now, after a never in living memory deflationary event, is actually threatening to RAISE mortgage rates. The mistake you are making is in thinking that the next "Black Swan" will be the same as the last one.

Are you mixing up deflation and decreasing inflation again?

Are you mixing up stimulus and actual demand again?

Crashy_Time

Keswick1uk said:

Crashy_Time said:

How are things progressing OP, what has your son decided to do?

He's looking at the market and the villages close by to work out his next step. Deciding areas he'd like to live and those with kerb appeal for resale. Plus areas where you can navigate without it being like a dodgems at the weekends. And where the buses run close ish too.

Apparantly, many more instructions are appearing daily on his rightmove searches - were 2 or 3 a day and now up to 10, so he's watching what is happening generally too. He's started to look at sold prices as well, as they get released on net prices (something like that). 

He's secured another years rent with no increase, so that's a temporary win too. He's found out he's likely to be able to borrow circa 162k.

So not much further on but he's content doing his thing.

Is he using PropertyLog to keep an eye on seller psychology?

Getting_greyer

Crashy_Time said:

Getting_greyer said:

Crashy_Time said:

Salemicus said:

> The Black Swan that bursts the bubble will be a stock market/credit market event IMO

Yes, something sort of financial crisis would probably hurt house prices.

Of course, we already had one of those. Tell me, if you'd bought at the peak, just prior to the 2007-8 financial crisis, and held until now, would you have made money, or lost money?

Time in the market >> timing the market.

You shouldn`t try to "make money" from a highly illiquid asset IMO, especially one that is designed for living in and not as an investment vehicle because you would have to downsize AND time the market to actually make any money. Most recent buyers are hoping to UPSIZE not downsize. The 2007 bubble was pumped back up with zero interest rates and massive money printing, but they can`t drop interest rates again and the amount of money printing required now, after a never in living memory deflationary event, is actually threatening to RAISE mortgage rates. The mistake you are making is in thinking that the next "Black Swan" will be the same as the last one.

Are you mixing up deflation and decreasing inflation again?

Are you mixing up stimulus and actual demand again?

No I am not and never have....? 

strawb_shortcake

My Brother is a ham fisted baboon when it comes to anything financial or administrative. If he's managed to keep his mortgaged home for 17 years then I'm not sure repossession really needs to register as a risk for the vast majority of the population.

Crashy_Time

Getting_greyer said:

Crashy_Time said:

Getting_greyer said:

Crashy_Time said:

Salemicus said:

> The Black Swan that bursts the bubble will be a stock market/credit market event IMO

Yes, something sort of financial crisis would probably hurt house prices.

Of course, we already had one of those. Tell me, if you'd bought at the peak, just prior to the 2007-8 financial crisis, and held until now, would you have made money, or lost money?

Time in the market >> timing the market.

You shouldn`t try to "make money" from a highly illiquid asset IMO, especially one that is designed for living in and not as an investment vehicle because you would have to downsize AND time the market to actually make any money. Most recent buyers are hoping to UPSIZE not downsize. The 2007 bubble was pumped back up with zero interest rates and massive money printing, but they can`t drop interest rates again and the amount of money printing required now, after a never in living memory deflationary event, is actually threatening to RAISE mortgage rates. The mistake you are making is in thinking that the next "Black Swan" will be the same as the last one.

Are you mixing up deflation and decreasing inflation again?

Are you mixing up stimulus and actual demand again?

No I am not and never have....? 

You can consider the CB`s and their stimulus packages as "part of the economy" or even as "the economy" if you want, that is a sensible investing approach, but they don`t do the level of stimulus we have seen over the past few years in reaction to "inflation" or even "declining inflation", their main enemy is deflation and that is the enemy they are fighting.