I'm currently buying, but getting cold feet...!

franklee

want2beMF wrote: »

I know someone else has mentioned abt counting interest on deposit, mortgage etc before buying and we didn't do tat much detailed calculation but we roughly did the sums and renting would cost us 1200 per month while mortgage on interest only (800) so it did seem worthwhile for us to go ahead and buy.

want2beMF wrote: »

Just to answer your question, purchase price is £305k and we took a 90% offset mortgage. The rental property we were looking at was abt the same value at abt £330k (based on asking prices) so I think they would be going for abt the same price as the asking price on my property was £345k.

So

Purchase price: 305k
90% offset mortgage, so amount borrowed: 274500
Monthly interest only mortgage payments: 800

How did you manage to get that monthly payment?

Using http://www.fool.co.uk/mortgages/CalculatorRepay.aspx I get:

How much do you want to borrow? 274500
For how many years? 25
What is the rate of interest on the mortgage? 6

The monthly payment for an interest only mortgage will be £1,373
The monthly payment for a repayment mortgage will be £1,769

To get a monthly payment of 800 I have to put in an interest rate of 3.5% !!!

Or perhaps you've loads of savings offset? At 6% a loan of 160000 produces an interest only payment of 800. That would mean you've offset 114500 of savings and didn't mention it

So either you have an interest rate of 3.5% or you've offset loads of savings :huh:

want2beMF

franklee wrote: »

So either you have an interest rate of 3.5% or you've offset loads of savings :huh:

Yes, we do have a fair bit of savings offset and we took out all our ISAs (not sure if tat was the right thing to do but oh well...) and we managed to get a good mortgage rate. Didn't want to mention this as it didn't seem relevant to the issue of the OP as just wanted to tell him tat different pple had different issues as to why we wanted to buy now. As higher rate taxpayers, we didn't see a rationale of paying higher rent and being taxed on our savings and so decided to buy and offset. Sorry to have confused you.... :rolleyes:

Bishop87

Hi,

I also like the security of your own home, my rent is going up next month, it's a 1bed flat at 500 a month, it's so small! Although has a tiny view of the sea...

I'm thinking, I have been offered a 5 year fixed rate, hopefully by then, this will all be history, 2 yrs to slump, 1 yr to stabalise, and 2 yrs to slowly grow! I'm hoping!

A gamble really, but then, as mentioned once all the hosue prices are rock bottom, the arrangement fees are v high, interest rates likely higher, and I'll need a much larger deposit, and I was lucky to get this honestly!!

So when prices have slumped - I wouldnt be able to buy then, I have NO credit rating, as I've never had loans/credit cards etc, as I always wanted to stay away, so no rating, so I feel lucky at the moment to have this 95% mortgage at a good ish fixed rate for 5 yrs which will hopefully get me through the downs and ups oif the market.

ALot of ppl have questioned the rent I gave, 650, to be honest that's just normal for a 2bed terrace with no parking here, I'm not even sure if you think that's too high or low! It's mostly flats for 450 ish (no kids/pets), or 750/850 for a massive 4 bed detached (too much!) or the inbetweens - 2bed terraces scattered about(not always in the best of areas and not always allowing for kids/pets..

Compared to the mortgage payments that's high! The palce I have secured currently I believe at this very poitn in time is a bargain, it may not be in a year or two when things have changed, but I've knocked them down 12k really.

Thanks a lot for your responses , they are great and have really made me think, last night I gave instructions to my solicitor to halt everything before the deposit is used, but now to be honest , looking at my circumstances -I think it's the right thing to do.

Not that I'm still not wary, but I dont know what's ahead, they'll go down more I'm sure, but I'm hoping/gambling that in those 5yrs, things won't be too messed up and I could perhaps look at changing to another place with a larger yard perhaps, but not any less then 5yr.

Bishop87

clobber wrote: »

Does anyone else wonder how they got the pool table into the attic room?

Maybe build it up there, soudns like a fun idea tho!

poppy10_2

Bishop87 wrote: »

It's in Scarborough, YO12 area, prices have come down a little, the terrace I'm buying came down from 120k to 110k, they I got them to 103k with fridge/freezer/washer/table and other bits.

I used to live in that area! Prices on that street were around £30-40k a few years ago
http://www.houseprices.co.uk/e.php?q=spring+bank%2C+scarborough&s=71&n=10

While they may not fall back to those levels, I can see current prices easily falling by 40-50% - Scaborough has no real employers other than the council, the tourist industry and the McCains plant. Very weak fundamentals, I can see it getting hit hard when the speculators up sticks and leave the market.

Bishop87

Wow, then again that was 8 years ago! Almost a decade, you still in Scar now?

I dunno, they have the MOD, woodheads, cooplands, pindar, mccains, and they're building a new industrial estate where the tip used to be.

On the flip side, and as bad as it sounds, people seem to come here to die. As in there are lots of elderly cash buyers buying in at Scarborough, with families in toe.

mr.broderick

brit1234 wrote: »

Your right it is going to fall 20% this year alone and down 40-50% in the next couple of years.


Makes sense to rent and see how the market will go to save you making the biggest financial mistake of your life.:exclamati

Brit shut up, people have stopped thanking your posts as you are making outrageous predictions that have no substance, are these to replace your images?

brit1234

mr.broderick wrote: »

Brit shut up, people have stopped thanking your posts as you are making outrageous predictions that have no substance, are these to replace your images?

Oh Mr Broderick are you jealous that I've got hundreds more thanks than actual posts unlike you? :rotfl:


On a serious note 50% falls are viable and becoming a closer reality each day. Just look at the changes to Nationwide, Woolich and HSBC all today. The fact is that the big banks tightening there belts daily basis. Houses can be purchased realistically at what the banks will lend. Conditions are getting tighter, deposits bigger, interest rates higher with the strong likelihood that BOE interest going up multiple times this year.


Prices can't stay at X if banks will only lend Y. Eventually prices will revert to Y and at this time Y is closing in on 50% drops. You may call this outrageous but I say to you that my argument is based on pure logic and your argument has no substance. Access to cheap money is simply gone, just look at the high interest rates you can get for your savings now. Banks are cash strapped and need money now with all the big losses and rights issues.


If you want to argue this we can start highlighting our workings complete with internet links to the current mortgage products from lenders and token Rightmove properties.


50% falls are extremely likely and getting closer each day.

zippygeorgeandben

I would love to live in Loughton... if it's good enough for Premier League footballers, then it's good enough for me!

PasturesNew

Alan_M wrote: »

Your assumption is that the million or more notional people wishing to buy property actually have the ability to borrow these sums or the availability of the money to start with.

In the last couple of weeks a lot of lenders have pulled what they call "jumbo mortgages" off the marketplace. These are the sort of mortgages very wealthy people were using to buy £1million houses.

Banks don't want the extra risk of losing huge amounts in single transactions.

If a house of £3million drops by £1million, the bank's risked a lot more to lend to that one borrower.

By restricting money at the top, this will have a trickle down effect. So far most price drops have been seen in the FTB arena - distressed sellers. And in the 2nd-home-owner group. The next lot up have tended to not reduce a lot and the huge price tags stayed put. Now people can't borrow £millions it's pushing down the prices of more expensive houses, so when the FTB crunch meets the millionaire crunch, the shape of the market will change.

Here's a link to a house that's gone down by £1.4 million:

http://www.rightmove.co.uk/viewdetails-19930427.rsp?pa_n=1&tr_t=buy
28/04/07 £2,395,000
02/06/08 £1,999,995