How can I quickest get into a £150,000 house?

Pal

While I am not condoning it, the credit card idea was not entirely without merit, depending on how desperate you are to move and your level of spare income.

You can get the mortgage approved before taking out the credit card debt, then use a 0% balance transfer into a bank account to get the deposit. Then transfer the debt regularly to new 0% deals while you pay it off as quickly as possible using your spare income.

High risk - yes, but it might be something you are willing to try if the circumstances are right. For example, your parents might have savings that they would be willing to use to pay off the credit card(s) if it all went pear shaped so that you don't end up in a 29% interest trap.

Not a recommendation, but perhaps worth a second thought if you are desperate to move.

michaels

I thought this was a money saves site not an old womans site.
1) You are more likely to get a lower rate mortgage / no higher lending fee if you put down 5%+ deposit
2) If you pay a lower rate on 95% of your mortgage it is worth paying a higher rate to get hold of the other 5%.

With respect to the original poster - he quotes a free income figure of over 1500pcm - if he wants to put that towards an investment in housing it is his choice - if he gets a fixed rate then he is not even at risk of interest rate rises. Please explain to me how it would be irresponsible for him to spend his money in this way rather than on booze, holidays or whatever else he might spend it on if he wasn't investing it in property.

Arguements on the future course of house prices are relevant to any buying decison but houses have allegedly been 'over-priced' for a couple of years now. Rather like stocks and shares unless you are specualting you should look at this as a long term investment and not try to play the peaks and troughs - I assume all those who are advising otherwise have put their money where their mouth is and have sold to rent?!

Pal

michaels wrote:

I assume all those who are advising otherwise have put their money where their mouth is and have sold to rent?!

Yes, actually.

Squidgy

They reckon prices are going to drop over the next 5 years. I say stay with your parents for a bit longer and save up. The less you have to borrow the better.

Squidgy
x

Kenny4315

Quote:
Originally Posted by michaels
I assume all those who are advising otherwise have put their money where their mouth is and have sold to rent?!

Sold all properties but my main residence, which is mortgage free, have a substantial amount in cash or near cash equiavalents (generating a reasonable level of income), I never gamble, and it's an odds on certainty that prices will come down.

meanmachine_2

Kenny4315 wrote:

Sold all properties but my main residence, which is mortgage free, have a substantial amount in cash or near cash equiavalents (generating a reasonable level of income), I never gamble, and it's an odds on certainty that prices will come down.

I hope you're right, and it does *seem* as if this property madness can't continue, but never underestimate the public's desire to overstretch themselves.

The one stat that always frightens me (greed and fear, fear and greed) is that, in parts of Ireland (republic), houses are now ten times the average wage. So we could, potentially, have a long way to go yet, particularly if int rates come down.

Until all these stupid property shows lose their audiences, I don't think anyone can confidently predict a crash. That will be my personal sign that the speculative mania is over.

Kenny4315

Trust me meanmachine, I am semi-retired at 35 (in fact since I was 32, if I want to work again I can if i don't I won't), House paid off, substantial sums in near cash equivalents, straight A qualified management accountant, qualified strategic management consultant, have degree in business, etc.

I never bet on anything unless I am going to win. I learned my lesson from my dad who has always been a gambler (horses, etc), you have to play the odds-on horses to win overtime and this is odds on. Only a financial muppet would spend the most amount of cash there ever going to spend at the peak of the market (unless they have got substantial amounts of the asking price to take some of the falls into account). It's alright saying a house is a 25 year investment that's nonsense, how many folk live in the same house for 25 years these days, not that many, you need the equity base to move on when you have family, change jobs, location, etc. Banks ain't to friendly if you have negative equity, no payment equals repossession, hence, repo's are steadily going through the roof.

Folk don't like it, in fact they detest the fact they they will be worth less shortly than they are today, but it will happen, as sure as night follows day. At the end of the day there no such thing as a free lunch, people have been happily spending cash that's not real cash, by releasing equity to buy rubbish. No one now seems to know what hard cash is, sooner or later they will have to pay with this mysterious substance and then they may find some difficulty in remembering what it actually looks like.

The banks also hate the thought of a crash because there lending has been beyond stupid, especially in the area of self-certification, which is a licence for folk to over-stretch themselves, they are up for some hard bottom line hits when it does go bang. Especially the likes of Northern Rock who have massive mortgage lending, in the self-certification area.

I am not so sure interest rates are going to come down substantially with the oil situation forcing up manufacturing and distribution costs, sooner or later these costs are going to filter down into inflationary drivers. Mr Brown can't control china's appetite for oil, nor can he control the middle-east situation, nor can he control the worldwide global economy which at some point will start going forward with some degree of certainty.

michaels

I am happy to call a bubble a bubble. However I can not agree that the housing market can only go down because values should be related to a multiple of incomes. I would contend that values should be related to 'long term' affordability. Lets take an extreme example (like the US so not outside the realms of possibility) where mortgages are fixed for 20 or 25 years. In this case surely it makes more sense for house prices to be at the level where mortgage interest payments are some percentage (say 25% - one third) of incomes. Long term interest rates are volatile but may be determined by peoples desire as a whole to defer consumption from the present to the future, the main driver of which is propably saving for retirement. With aging population profiles in most developed countries it is likely that an increased demand for savings will tend to keep long term interest rates fairly low, thus reducing the likelihood that the proportion of income required to service a mortgage of a given size will increase - which is the factor that in my 'model' would push down house prices.

Kenny4315

michaels quote

However I can not agree that the housing market can only go down because values should be related to a multiple of incomes. I would contend that values should be related to 'long term' affordability.

What you earn in 20 years time bear no relation to your need to pay the mortgage and other outgopings now on a month by month basis. You can argue with the bank all you like if your in arrears, saying well in 10 years time I'll be on 5 times my salary, they'll still repossess your house.

meanmachine_2

And you can be sure that over the course of a 25 year mortgage this country WILL have at least one recession. So if the mortgage is taking up 50% of someone's income, even during a time of employment, lord knows how they'll afford this during any downturn.

You can also be sure, just as night follows day, that interest rates will return, at some point to their historical average. I know of recent FTBers who would have nothing to live on if int rates even went up to just 7%.

Scary and completely unsustainable.

And what would happen to companies like Northern Rock, with their 100% and 125% mortgages? I shudder to think.