Is it a good time to buy a house and fix the interest rate for as long as you can?

Crashy_Time

980233 said:

Crashy_Time said:

It is the subsequent hikes you have to worry about (if you borrowed too much for basic shelter) 

Even if you're fixed for 2, 5 or 10 years?

It is the fix that your potential future buyer can get that determines the price of your property, many people will be able to control the monthly payment for a while I agree, they won`t be able to control having paid/borrowed too much though as their property price drops.

RelievedSheff

What if you have no intention to sell therefore have no potential future buyer?

Does your house suddenly become worthless?

SpiderLegs

Crashy_Time said:

980233 said:

Crashy_Time said:

It is the subsequent hikes you have to worry about (if you borrowed too much for basic shelter) 

Even if you're fixed for 2, 5 or 10 years?

It is the fix that your potential future buyer can get that determines the price of your property, many people will be able to control the monthly payment for a while I agree, they won`t be able to control having paid/borrowed too much though as their property price drops.

The price won’t drop though will it.

the price is set when the house is sold. If there is a gap between what the buyer can raise and what the seller needs (e.g. to clear their existing mortgage) then erm… there is no sale.

If you think the pain of higher mortgage rates is  all going to fall on those that are already sat quite happily on their fixed rate, in their new build that they bought with a 95% mortgage in 2018 then you’re sadly mistaken.

it’s actually going to fall on all those that want to buy in 2022, but can’t because supply has been constrained even more. 

Bad news for renters, who find it even harder to buy. Even if the ‘price’ does fall, the financing goes up so they are just as stuck as before. In fact even more so since their LLs will be passing on their extra costs. 

Be careful what you wish for crashy or you might be stuck in that bedsit for a lot longer. 

Crashy_Time

SpiderLegs said:

Crashy_Time said:

980233 said:

Crashy_Time said:

It is the subsequent hikes you have to worry about (if you borrowed too much for basic shelter) 

Even if you're fixed for 2, 5 or 10 years?

It is the fix that your potential future buyer can get that determines the price of your property, many people will be able to control the monthly payment for a while I agree, they won`t be able to control having paid/borrowed too much though as their property price drops.

The price won’t drop though will it.

the price is set when the house is sold. If there is a gap between what the buyer can raise and what the seller needs (e.g. to clear their existing mortgage) then erm… there is no sale.

If you think the pain of higher mortgage rates is  all going to fall on those that are already sat quite happily on their fixed rate, in their new build that they bought with a 95% mortgage in 2018 then you’re sadly mistaken.

it’s actually going to fall on all those that want to buy in 2022, but can’t because supply has been constrained even more. 

Bad news for renters, who find it even harder to buy. Even if the ‘price’ does fall, the financing goes up so they are just as stuck as before. In fact even more so since their LLs will be passing on their extra costs. 

Be careful what you wish for crashy or you might be stuck in that bedsit for a lot longer. 

That isn`t how it works, the price is set by the houses that actually sell, and by the amount that lenders are willing to lend and the rate they lend at, if a similar house in your street or area sells for 50k less good luck holding out for the price you originally wanted! Have you never heard of neighbours getting agitated and trying to exert influence when someone undercuts the "price for the street"? The market is made by actual sales not people who think their house is somehow a store of value. The "value" is only there because of rock bottom rates. Most lenders will be "down-valuing" now because actually lending is more important than propping up a price bubble when sentiment takes a knock, the days of CB`s co-ordinating to prop up asset prices are over I think, this moment is more about propping up the whole economy!

SpiderLegs

Crashy_Time said:

SpiderLegs said:

Crashy_Time said:

980233 said:

Crashy_Time said:

It is the subsequent hikes you have to worry about (if you borrowed too much for basic shelter) 

Even if you're fixed for 2, 5 or 10 years?

It is the fix that your potential future buyer can get that determines the price of your property, many people will be able to control the monthly payment for a while I agree, they won`t be able to control having paid/borrowed too much though as their property price drops.

The price won’t drop though will it.

the price is set when the house is sold. If there is a gap between what the buyer can raise and what the seller needs (e.g. to clear their existing mortgage) then erm… there is no sale.

If you think the pain of higher mortgage rates is  all going to fall on those that are already sat quite happily on their fixed rate, in their new build that they bought with a 95% mortgage in 2018 then you’re sadly mistaken.

it’s actually going to fall on all those that want to buy in 2022, but can’t because supply has been constrained even more. 

Bad news for renters, who find it even harder to buy. Even if the ‘price’ does fall, the financing goes up so they are just as stuck as before. In fact even more so since their LLs will be passing on their extra costs. 

Be careful what you wish for crashy or you might be stuck in that bedsit for a lot longer. 

That isn`t how it works, the price is set by the houses that actually sell, and by the amount that lenders are willing to lend and the rate they lend at, if a similar house in your street or area sells for 50k less good luck holding out for the price you originally wanted! Have you never heard of neighbours getting agitated and trying to exert influence when someone undercuts the "price for the street"? The market is made by actual sales not people who think their house is somehow a store of value. The "value" is only there because of rock bottom rates. Most lenders will be "down-valuing" now because actually lending is more important than propping up a price bubble when sentiment takes a knock, the days of CB`s co-ordinating to prop up asset prices are over I think, this moment is more about propping up the whole economy!

Congratulations crashy. You have successfully argued against your own argument.

jimbog

SpiderLegs said:

Crashy_Time said:

SpiderLegs said:

Crashy_Time said:

980233 said:

Crashy_Time said:

It is the subsequent hikes you have to worry about (if you borrowed too much for basic shelter) 

Even if you're fixed for 2, 5 or 10 years?

It is the fix that your potential future buyer can get that determines the price of your property, many people will be able to control the monthly payment for a while I agree, they won`t be able to control having paid/borrowed too much though as their property price drops.

The price won’t drop though will it.

the price is set when the house is sold. If there is a gap between what the buyer can raise and what the seller needs (e.g. to clear their existing mortgage) then erm… there is no sale.

If you think the pain of higher mortgage rates is  all going to fall on those that are already sat quite happily on their fixed rate, in their new build that they bought with a 95% mortgage in 2018 then you’re sadly mistaken.

it’s actually going to fall on all those that want to buy in 2022, but can’t because supply has been constrained even more. 

Bad news for renters, who find it even harder to buy. Even if the ‘price’ does fall, the financing goes up so they are just as stuck as before. In fact even more so since their LLs will be passing on their extra costs. 

Be careful what you wish for crashy or you might be stuck in that bedsit for a lot longer. 

That isn`t how it works, the price is set by the houses that actually sell, and by the amount that lenders are willing to lend and the rate they lend at, if a similar house in your street or area sells for 50k less good luck holding out for the price you originally wanted! Have you never heard of neighbours getting agitated and trying to exert influence when someone undercuts the "price for the street"? The market is made by actual sales not people who think their house is somehow a store of value. The "value" is only there because of rock bottom rates. Most lenders will be "down-valuing" now because actually lending is more important than propping up a price bubble when sentiment takes a knock, the days of CB`s co-ordinating to prop up asset prices are over I think, this moment is more about propping up the whole economy!

Congratulations crashy. You have successfully argued against your own argument.

Have you never heard of neighbours getting agitated and trying to exert influence when someone undercuts the "price for the street"? 

Crashy_Time

SpiderLegs said:

Crashy_Time said:

SpiderLegs said:

Crashy_Time said:

980233 said:

Crashy_Time said:

It is the subsequent hikes you have to worry about (if you borrowed too much for basic shelter) 

Even if you're fixed for 2, 5 or 10 years?

It is the fix that your potential future buyer can get that determines the price of your property, many people will be able to control the monthly payment for a while I agree, they won`t be able to control having paid/borrowed too much though as their property price drops.

The price won’t drop though will it.

the price is set when the house is sold. If there is a gap between what the buyer can raise and what the seller needs (e.g. to clear their existing mortgage) then erm… there is no sale.

If you think the pain of higher mortgage rates is  all going to fall on those that are already sat quite happily on their fixed rate, in their new build that they bought with a 95% mortgage in 2018 then you’re sadly mistaken.

it’s actually going to fall on all those that want to buy in 2022, but can’t because supply has been constrained even more. 

Bad news for renters, who find it even harder to buy. Even if the ‘price’ does fall, the financing goes up so they are just as stuck as before. In fact even more so since their LLs will be passing on their extra costs. 

Be careful what you wish for crashy or you might be stuck in that bedsit for a lot longer. 

That isn`t how it works, the price is set by the houses that actually sell, and by the amount that lenders are willing to lend and the rate they lend at, if a similar house in your street or area sells for 50k less good luck holding out for the price you originally wanted! Have you never heard of neighbours getting agitated and trying to exert influence when someone undercuts the "price for the street"? The market is made by actual sales not people who think their house is somehow a store of value. The "value" is only there because of rock bottom rates. Most lenders will be "down-valuing" now because actually lending is more important than propping up a price bubble when sentiment takes a knock, the days of CB`s co-ordinating to prop up asset prices are over I think, this moment is more about propping up the whole economy!

Congratulations crashy. You have successfully argued against your own argument.

No, people will still sell, even if prices drop and rates rise.

ian1246

We brought in June 2021 - fixed for 10years. We did that since the house we brought will hopefully be our forever home - we wanted certainty of what we'd be paying over the next decade, plus we planned to start a family shortly after buying our house, so wouldn't want the hassle of remortgaging at an inconvenient moment I.e. wife on maternity leave, childcare costs all which could effect our future ability to remortgage.

With regards to house price - we brought our house for the same price our seller did in 2007 - he was going through a divorce and had let the property deteriorate in terms of blown windows, new doors needed, ensuite needing replacing, cleaning throughout, new carpets & decorating throughout etc... Zoopla's lowest market estimate is £62,000 more than we paid, mid-estimate £104,000 and top end estimate £145,000 more - so hopefully even if there is a drop in prices we should be OK.

Crashy_Time

ian1246 said:

We brought in June 2021 - fixed for 10years. We did that since the house we brought will hopefully be our forever home - we wanted certainty of what we'd be paying over the next decade, plus we planned to start a family shortly after buying our house, so wouldn't want the hassle of remortgaging at an inconvenient moment I.e. wife on maternity leave, childcare costs all which could effect our future ability to remortgage.

With regards to house price - we brought our house for the same price our seller did in 2007 - he was going through a divorce and had let the property deteriorate in terms of blown windows, new doors needed, ensuite needing replacing, cleaning throughout, new carpets & decorating throughout etc... Zoopla's lowest market estimate is £62,000 more than we paid, mid-estimate £104,000 and top end estimate £145,000 more - so hopefully even if there is a drop in prices we should be OK.

Good deal, well done!

lookstraightahead

ian1246 said:

We brought in June 2021 - fixed for 10years. We did that since the house we brought will hopefully be our forever home - we wanted certainty of what we'd be paying over the next decade, plus we planned to start a family shortly after buying our house, so wouldn't want the hassle of remortgaging at an inconvenient moment I.e. wife on maternity leave, childcare costs all which could effect our future ability to remortgage.

With regards to house price - we brought our house for the same price our seller did in 2007 - he was going through a divorce and had let the property deteriorate in terms of blown windows, new doors needed, ensuite needing replacing, cleaning throughout, new carpets & decorating throughout etc... Zoopla's lowest market estimate is £62,000 more than we paid, mid-estimate £104,000 and top end estimate £145,000 more - so hopefully even if there is a drop in prices we should be OK.

Exactly how it should be done in my opinion. 

There are good deals out there but people want to pay over asking fir some reason.