Young Home-Owner (18 years)

Larry365

I appreciate that brankruptcy and property repossession effects the financial market but you can be reassured that my house would be sold before repossessed if it ever came to that situatuion. I would give up and sell before i got close to brankruptcy. I do not wish to negitivly effect my credit rating and would be prepared to sell my house if only to pay the mortgage company back and make no financial gain. I feel that as long as i keep up with my repayments then no harm has been done and if i fail then it is my fault and only i shall be effected. Do you not think that if a person on 14000 a year can afford a mortgage meant for a person on a 40000 a year then there is something wrong with the system.

jaype

Good god, what if you become ill or injured on the job (not something that you think about at 18 as everyone believes they're invincible, but...)? You need to build up some savings and do something about this asap, especially as you don't have a partner or similar who could help out with the mortgage if the worst happened. Yes, you've committed fraud and the proportion of your income you are paying out is ridiculous. Also - are you aware of the credit crunch? Remember, you will have to remortgage at some point and self employed people aren't exactly desirable now, as far as lenders are concerned. Rates may be falling, but unless you have a steady job and monthly wage slips, in future you will be made to pay over the odds. You had better get saving and try to ride this one out - and it might last for years. Banks just aren't lending like they used to so there's not enough money for people to buy at ever increasing prices, hence the fear that prices will fall. How about a second job, and you'd better put up an ad for that lodger quickly. The first time buyer schemes you are thinking of apply BEFORE you make a purchase and are basically like shared ownership. But they're a bad deal and you're well out of it. Well done for saving so well but I hope it's not all in vain.

dmg24

This has got to be a troll.

Think it is a full moon tonight.

nick74

Larry365 wrote: »

Do you not think that if a person on 14000 a year can afford a mortgage meant for a person on a 40000 a year then there is something wrong with the system.

To have to take a 35 year interest only mortgage with no obvious means of ever repaying the capital tends to suggest that you can't actually afford it.

phlash

Larry....I'll read this thread again in 3/4 years time when you've updated it, I'm sure you may well have clued yourself up a bit. I think the authorities may have just enough information from this thread to chase you up, if not I will quite gladly oblige in helping them track you through your ISP.

Good luck.

PS. My car can accelerate pretty fast, but at about 8000 rpm it simply cannot accelerate further. Its reached its speed (ie acceleration = 0). Just because it got to top speed at an impressive rate in the last 20 seconds, it doesn't mean it simply keeps on going at that rate for the next 20 seconds. Think about your Nova for a while, and then you may see why your *reasoning* for further house price growth may just be flawed.....fundamentally!

HugoSP

I think the OPs got the message, or most of you have done your best trying to tell him.

Either way he is still in this situation, but a few spleens have been vented, and no doubt the owners of those spleens feel better for it

What he did was certainly wrong and may come back to bite him hard very soon.

Lets look at the situation:

1) He has a mortgage he can't afford - bad
2) He is on a low wage - bad. Could he increase his earnings?
3) He is single and without dependents - good.
4) He is young - good

My advice to the OP is.....

1) As Lavindyr has said, give up the fags. When I owned a house at 19 (my father stood as mortgage guarantor, so no fraud involved I promise), I worked with one smoker who spent more on fags per month than my mortgage cost me, and that included a with profits endowmant!

GIVE UP THE CIGARETTES, OR LOSE THE HOUSE AND HAVE A SH1T3 CRETID RATING!


2) Take in lodgers. I don't know how many bedrooms the house has but this is a great way to make ends meet. I predict a lot of rooms in houses being advertised in the coming months to help with increased mortgage payments. Lincoln is a university town is it not? Is student accomodation in short supply? University students make by far the best lodgers from the point of view of paying rent in my experience, but make sure you research and type up the best tenancy agreements you can. My lodgers basically paid the interest on my mortgage. What I would have paid in rent maintained my with profits endowment.

3) Get extra jobs. A great way to help towards both income and social life is to get bar work. Bar work really develops social skills, you may even meet a nice young lady willing to be your 'lodger':D. I met such a person via a friend and now I am married to her.

4) Be very critical of what you spend. Don't go applying for credit cards etc. I'm sorry to say this but I really don't think that you are up to managing more credit. I know it's tempting but please DON'T! I am now 40 but only started using credit cards about 6 years ago, because, quite frankly I didn't consider that they were right for me until then. I had my first mortgage at 19 but for the first 7 years or so that was the ONLY money I borrowed.

5) This is really important, but despite what you may believe from reading your posts...

YOU KNOW JACK SCHIT!

I make no apologies for saying that, you are young and naive. I was just as naive at your age, but sought the advice of people who knew more about what I was looking at than I did. Thinking you know everything without checking the facts will just make your situation worse, and that is what I think is antagonising some people here.

Good luck with your situation. If you play it well you will come out of it with a fantastic life lesson in a few years time, and will be a hell of a lot smarter than your peers.

Screw it up and you may learn the same life lesson - the hard way.

silvercar

I don't believe this thread for one minute.

If there was a dodgy mortgage broker out there prepared to say someone earned 3 times their actual income, why do it on an 18 year old client where the lender is more likely to do some checks on financial history (or lack of) and why do it to such an extent that the risk of it falling apart is so high.

I also can't see how any solicitor (who is also acting for the lender remember) is happy to go along with a mortgage offer based on such an inflated salary for an 18 year old. The solicitor would risk being struck off if caught.

nick74

...and I wouldn't have believed that a mortgage broker would arrange a £300k interest only mortgage for a couple with a combined income of £35k if I didn't know the couple personally and hadn't seen it all happen with my own eyes.

chriz1000

nick74 wrote: »

...and I wouldn't have believed that a mortgage broker would arrange a £300k interest only mortgage for a couple with a combined income of £35k if I didn't know the couple personally and hadn't seen it all happen with my own eyes.

How in the name of god did they pay that back?! Or didn’t they?

My girlfriend and I are on a combined income of over £100k, looking at things realistically I don’t want a mortgage for more than £200k.


Larry, I think some people are being a little harsh, you are in this mess now so there’s no point anyone being so over critical. Asking for free handouts is probably why some people feel the way they do.
I can see why you did what you did, and you obviously had your dads support too. You both obviously believed that property prices could only go one way, and that not getting your hands stuck in quickly would be a financial mistake later on in life.

Hugo had some good ideas. Can’t you move back in with your dad and rent out the property for now? Then in a few years when you can afford it move back in?

Lavendyr

Larry365 wrote: »

I appreciate that brankruptcy and property repossession effects the financial market but you can be reassured that my house would be sold before repossessed if it ever came to that situatuion.

Thing is...that's very easily said, but you can never assume that you will easily be able to sell a house. For many people, increasingly these days in the market's current state, being able to sell a house is not a given. Remember that by being on an interest-only mortgage, you are gaining no equity at all - you effectively own none of the house. So if you sell, you must sell for the same amount for which you bought, otherwise you will not be able to pay off your debt.

Larry365 wrote: »

I feel that as long as i keep up with my repayments then no harm has been done and if i fail then it is my fault and only i shall be effected.

But do you see that in what you are asking for (i.e. whether you could get such a thing as a young home-owners grant), other people are negatively affected by your actions, because if there were such a thing, it would be funded by tax-payers' money, meaning that every taxpayer in the country would be bailing you out. And you say that you are keeping up with your repayments, but at the same time you admit that your incomings and outgoings are nearly the same. I'm really sorry because I know it sounds harsh, but that does not equate to "keeping up with repayments" - because you are not putting anything towards the capital, and if your interest rate goes up on your mortgage, you'll be in an even tighter situation. Just because you can afford the repayments today, do not assume that you will always be able to afford them - it would be very wise to look into boosting your income so that you can put some funds aside in savings.

Larry365 wrote: »

Do you not think that if a person on 14000 a year can afford a mortgage meant for a person on a 40000 a year then there is something wrong with the system.

Well, I agree that house prices are too high at the moment and that property is generally overvalued. However, I still think that it has never been easy for a single person - never mind a single 18-year-old - to buy a house. And as said above, unfortunately, no matter how you try to convince yourself, you are not affording this mortgage. Sooner or later, something may come along - whether sickness, redundancy, increased interest rates or an unexpected cost such as a broken boiler - which will knock your carefully balanced finances for six, and suddenly repayments will creep beyond your reach. By playing things so very close, you are putting yourself and your finances at great risk. I really hope that you consider doing something to change your situation very soon because I cannot see how your position is tenable.