# First Time Buyer



## Matt. (Aug 26, 2007)

Which type of mortgage did / would you choose? 

Fixed or Variable?

I have seen a Fixed for 3 years at 5.79% or Fixed for 5 years at 5.89% with a fee.

I am aware that it is a high percentage, but we are so desperate to get out of this renting rut.


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## Alzak (Aug 31, 2010)

Depends what kind of deposit do You have but for us best offer was from Nationwide


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## Crispo (Mar 23, 2011)

I've always had fixed, nice to know exactly what is going out every month. Normally at a higher rate than variable but you get the comfort of knowing it won't go up and possibly out of your budget.


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## kh904 (Dec 18, 2006)

Matt. said:


> Which type of mortgage did / would you choose?
> 
> Fixed or Variable?
> 
> ...


Why are you desperate not to rent?

Your average person believes owning/buying your home is better than renting (in many circumstances it is), but it isn't always!

Re: the fixed or variable rate, depends on how confident you feel about the state of the economy, your income etc, whether you feel here's is going to be more quantitative easing/inflation (good for debtors/bad for savers), or higher interest rates (bad for debtors/good for savers).

Can you afford to keep up your repayments (& still comfortably live) if BoE interest rates go up to say 5%-7% for eg? Historically iirc the average historical BoE rate is 7%, so these low rates/cheap credit is below average!!!


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## Natalie (Jan 19, 2011)

Alzak said:


> You have but for us best offer was from Nationwide


Us too, we initially went for a 3 year fixed deal, when it ended it went to 2% above base rate which we have just stayed on for the 3 years since our fix ended.

Have a read of MSE if you haven't already
http://www.moneysavingexpert.com/mortgages/

http://forums.moneysavingexpert.com/forumdisplay.php?f=15


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## The Cueball (Feb 8, 2007)

I always just fix it and forget it... 

:thumb:


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## Matt. (Aug 26, 2007)

kh904 said:


> Why are you desperate not to rent?
> 
> Your average person believes owning/buying your home is better than renting (in many circumstances it is), but it isn't always!
> 
> ...


We have rented for four years now. I have a 3 year old daughter that hasn't had a garden. We live in a apartment.

I refuse to pay anymore rent on a house, otherwise we would of moved into a house 3 years ago.

I have a 5% deposit, for a nice house, in the right area that has been refurbished. Before you all start saying, the more deposit the better, I know this, but we have had enough of renting and enough of living here!


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## kh904 (Dec 18, 2006)

Could you not rent a bigger house with a garden?

I'm not saying you shouldn't buy, but really really be honest with yourself & go through if you can afford not just the repayments (especially if & when rates go up), but any repairs that you landlord is currently liable to pay if needed (ie if your boiler packs in, leaks etc).


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## Roswell (Aug 11, 2008)

Not as easy a question as it may seem, when my peers were getting fix rates I got a variable not long after that interest rates started falling. Based on they can't really fall go for a fixed, but I don't think interest rates are going to go up anytime soon so which is cheaper over the life of the mortgage ?


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## Matt. (Aug 26, 2007)

kh904 said:


> Could you not rent a bigger house with a garden?
> 
> I'm not saying you shouldn't buy, but really really be honest with yourself & go through if you can afford not just the repayments (especially if & when rates go up), but any repairs that you landlord is currently liable to pay if needed (ie if your boiler packs in, leaks etc).


I could rent a bigger house yes. But I don't want to pay anymore when I could be paying a mortgage for a bit more than the rent for a house.


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## ottostein (Sep 11, 2012)

Going to throw a curve ball but why not try and move in with friends whilst purchasing a house, but not a refurbed one. An old clapped out house. there easily 30k+ cheaper, do it up over a year or so then move into your ideal home.


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## Bero (Mar 9, 2008)

Depends on your circumstances - think of it as insurance, but if you will be nice and comfortable with the payments I'd be tempted to go variable.

I have always been of the opinion: -

"the banks take a risk offering a fixed rate, but they know better than me the likely future interest rates and will price it so the vast majority of the time they end up better off"

So, I've always taken the risk myself and it's always (to date at least, I fully expect this to work against me at times too!) worked to my benefit. Before I took this on I worked out what the payments would be in the rates increased 5%+ in a short period of time - and accept that as a risk.

On the other hand if things will be tight when you move in it's not expensive insurance!



ottostein said:


> Going to throw a curve ball but why not try and move in with friends whilst purchasing a house, but not a refurbed one. An old clapped out house. there easily 30k+ cheaper, do it up over a year or so then move into your ideal home.


You may have missed it further down the thread, but not very practical with a 3yr old.


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## Matt. (Aug 26, 2007)

There is two houses on the same road. This one has been refurbished and is on sale for a bit cheaper than the other one.

The guy that bought it last, bought it last year to refurbish.


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## WopaDoBop (Nov 9, 2009)

I prefer the security of the fixed, but Bero makes a very valid point I'd never considered.


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## TooFunny (Sep 18, 2012)

Have you spoken to any banks or building societies regarding how much they would lend you or even lend to you at all with only a 5% deposit?

I'm renting, and have been for a fair few years now, but having bought 16 years ago at the end of the drop back in the 90's and seen how much these over inflated kept high prices are in comparison allowing for wage increases in those years, there is no way on earth I would be buying at the moment.

With a 5% deposit you could very quickly and easily end up in negative equity and be stuck there for a very long time.

PLus why would anyone pay a 20% deposit to the banks so that the risk of the price fall is all yours while the banks makes more than 100% profit over the 25 years you rent the house from the bank anyway?!??

Just my opinion mind.


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## S63 (Jan 5, 2007)

5.79% a high rate?

Some of us are old enough to have paid a whopping 15%


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## Bero (Mar 9, 2008)

TooFunny said:


> Have you spoken to any banks or building societies regarding how much they would lend you or even lend to you at all with only a 5% deposit?
> 
> I'm renting, and have been for a fair few years now, but having bought 16 years ago at the end of the drop back in the 90's and seen how much these over inflated kept high prices are in comparison allowing for wage increases in those years, there is no way on earth I would be buying at the moment.
> 
> ...


There are always good and bad reasons for renting and for buying, but this is not my point.

Forget house prices for a moment and focus on costs, specifically the % of income spent on mortgage each month in the 90s and the same for now, I'm *guessing* there is not much difference....and why is that?

A fifth of the 90s had an interest rate >10%, it was just under 15% at the start of the 90s!!! Of course house prices were low, no one could afford 10+% interest on a lot of money, so despite the low price of houses the repayments were large, now interest rates as 0.5%, so repayments are low and people can afford to borrow more (read pay more for the same house) so house price increase. If you believe interest rates will surge back up then yes wait for prices to come down/collapse, but I think interest rates will be used to mostly temper the market as (if?!) we move out of recession to keep house prices at current levels to marginal growth until we're back at 4-6% interest rates.

edit - obviously took me a while to write that. I see S63 reference 15% in my time to reply.


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## dobbo99 (Aug 12, 2011)

we've just bought, but the minimum we could put down was 10% on a pre-owned house. I couldnt find a lender to actually give us a 5% deal, although they are advertised.

i already own a flat which we live in, but the mortgages available were crazy in terms of value, we couldnt actually pay bank some of what was on offer. so the irresponsible side is still in full force.
as an example, the lender is quite happy to lend on top of the existing mortgage, so we arent actually selling the flat, going to rent it out.
so dispite this period of down turn, there are still positives to be had ie Ive now got 2 mortgages??

the arrival of a little one in March has forced our hand a little early, but we havent bargined hard and got a decent deal.

theres various incentives on new builds at 5%, but very few are actually genuine, and the houses are overpriced to compensate.


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## B17BLG (Jun 26, 2012)

Well i just bought for the first time, got it fixed for 5 years at 3.99% with natiowide! Got an awesome package really!

Paying under £500 PCM for a 145K property!!

I'd be paying much much much more per month if i was renting my house probably 7-800.


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## NickCW (Dec 29, 2007)

There are a lot of options and its best to way up carefully, I purchased back in June of this year and put down a 10% deposit. I was able to get a 4.69% fixed for 5 years, although I had to pay a fee for the priviledge.
Having a high LTV of 90% meant even trackers were limited, and it worked out to be no more than about a 1-2% difference at most, that worked out at around £50/£100. I would rather pay the £50pm for 5 years than risk it going up, IMO of course.

Once I have built up more equity I won't be as worried, but first houses are always a bit tight.

I full agree in buying not renting as you get something back, think of it as a piggybank with a few holes in it 

I would look at all your options if your a first time buyer, there are government incentive schemes which scrap stamp duty, and add other benefits.
A friend of mine has just bought a house on one of these, its shared ownership but the rents quite low, and you are able to buy out all of the shares in time so you can fully take control in the future.

My advice would be to save as much as you can, really skimp and save and don't overstretch yourself. Obviously the better your LTV the better your mortgage, just work out some scenarios based on your finances if 'X' and 'Y' happen etc, above all you want security for your family.

HTH.


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## Matt. (Aug 26, 2007)

B17BLG said:


> Well i just bought for the first time, got it fixed for 5 years at 3.99% with natiowide! Got an awesome package really!
> 
> Paying under £500 PCM for a 145K property!!
> 
> I'd be paying much much much more per month if i was renting my house probably 7-800.


You must of put a hefty deposit down on that then?


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## B17BLG (Jun 26, 2012)

Matt. said:


> You must of put a hefty deposit down on that then?


6% with nationwide


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## Matt. (Aug 26, 2007)

6% deposit on a £145k house with repayments under £500 PCM? Surely not? 

Is that specific deal on their website?


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## B17BLG (Jun 26, 2012)

Matt. said:


> 6% deposit on a £145k house with repayments under £500 PCM? Surely not?
> 
> Is that specific deal on their website?


Nope our financial advisor found the package, there are a few T's and C's where we have to exchange contracts in a certain time scale and a few other bits and pieces!

Which financial advisor do you use? I would always suggest going down the private route. If a estate agent or building company recommend one, they normally dont search as hard as they need to exchange contracts with in conjunction with what the estate agent wants for targets


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## Matt. (Aug 26, 2007)

I don't have a specific one. I have gone to one bank so far, but I do plan to use a independant one.

Is there a title for that deal? Something I could mention to the advisor as that seems a good deal.

Was there a fee?


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## S63 (Jan 5, 2007)

B17BLG said:


> there are a few T's and C's where we have to exchange contracts in a certain time scale and a few other bits and pieces!


Hope your property purchase is chain free, otherwise that's a big T and C


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## TooFunny (Sep 18, 2012)

B17BLG said:


> Nope our financial advisor found the package, there are a few T's and C's where we have to exchange contracts in a certain time scale and a few other bits and pieces!
> 
> Which financial advisor do you use? I would always suggest going down the private route. If a estate agent or building company recommend one, they normally dont search as hard as they need to exchange contracts with in conjunction with what the estate agent wants for targets


6% of 145,000 is £8,700, leaving you £136,300 to pay back, at £500 a month you'd be paying that back over what 50 years??? Or are you paying interest only?!?!


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## bigslippy (Sep 19, 2010)

B17BLG said:


> Well i just bought for the first time, got it fixed for 5 years at 3.99% with natiowide! Got an awesome package really!
> 
> Paying under £500 PCM for a 145K property!!
> 
> I'd be paying much much much more per month if i was renting my house probably 7-800.


Don't think so , 3.99% is their standard variable rate after any fixed/tracker rate is finished, 5 years fixed at that loan to value is 5.99% with a £499 fee


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## Matt. (Aug 26, 2007)

bigslippy said:


> Don't think so , 3.99% is their standard variable rate after any fixed/tracker rate is finished, 5 years fixed at that loan to value is 5.99% with a £499 fee


So is it not possible then?


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## kh904 (Dec 18, 2006)

TooFunny said:


> 6% of 145,000 is £8,700, leaving you £136,300 to pay back, at £500 a month you'd be paying that back over what 50 years??? Or are you paying interest only?!?!


I agree something isn't correct, it would take nearly 23 years at 0% (paying £500 p/m)!!!


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## mattsbmw (Jul 20, 2008)

Matt. Most financial advisors will charge a fee for their work but they can usually get access to deals that you or i cant directly.

If you want the number of the one i used then please PM me (he is over in heanor, derbyshire)

Also have you considered the area that you are looking in, as house prices can fluctuate with only a few miles apart.

We moved house a few months ago so if you need any help or advice feel free to PM me.

Matt


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## bigslippy (Sep 19, 2010)

mattsbmw said:


> Matt. Most financial advisors will charge a fee for their work but they can usually get access to deals that you or i cant directly.
> 
> If you want the number of the one i used then please PM me (he is over in heanor, derbyshire)
> 
> ...


:doublesho I don't charge a fee and I can access direct deals:thumb:


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## mattsbmw (Jul 20, 2008)

bigslippy said:


> :doublesho I don't charge a fee and I can access direct deals:thumb:


OK, let me qualify that, the ones i spoke to all charged a fee.


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## bigslippy (Sep 19, 2010)

mattsbmw said:


> OK, let me qualify that, the ones i spoke to all charged a fee.


Ok, you're back on me xmas card list:lol:


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## Matt. (Aug 26, 2007)

mattsbmw said:


> Matt. Most financial advisors will charge a fee for their work but they can usually get access to deals that you or i cant directly.
> 
> If you want the number of the one i used then please PM me (he is over in heanor, derbyshire)
> 
> ...


Thanks Matt. So the guy charges a fee, then there may be a fee on the mortgage? Did you get a better deal going through an Independant than the bank?


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## Matt. (Aug 26, 2007)

bigslippy said:


> :doublesho I don't charge a fee and I can access direct deals:thumb:


Come on then sort me a few deals out


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## mattsbmw (Jul 20, 2008)

Matt. said:


> Thanks Matt. So the guy charges a fee, then there may be a fee on the mortgage? Did you get a better deal going through an Independant than the bank?


Yes he charged a fee and there was a product fee but the fixed rate of interest more than outweighed both fees over the term of the mortgage based on the rates i could get by going direct.

Also the advisor i used offered free advice with his fee only payable on completion of the mortgage.


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## bigslippy (Sep 19, 2010)

Matt. said:


> Come on then sort me a few deals out


No worries Matt , pm me some details, value/purchase price you're considering , deposit and term you want to take this over and I'll give you some comparisons to look at if you want:thumb:


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## Matt. (Aug 26, 2007)

Cool.

That's what I'm after, someone that offers free advice with a fee on completion.

Is that place still on the corner on the big hill where the speed cameras are? Or is that Ilkeston?


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## mattsbmw (Jul 20, 2008)

Matt. said:


> Cool.
> 
> That's what I'm after, someone that offers free advice with a fee on completion.
> 
> Is that place still on the corner on the big hill where the speed cameras are? Or is that Ilkeston?


thats the one  was within walking distance of our previous house.


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## Matt. (Aug 26, 2007)

Wow that's weird!

My parents have used them in the past and have recommended them to us.


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## Matt. (Aug 26, 2007)

What's the place called? Do they have a website?


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## mattsbmw (Jul 20, 2008)

Matt. said:


> Wow that's weird!
> 
> My parents have used them in the past and have recommended them to us.





Matt. said:


> What's the place called? Do they have a website?


Very spooky.

Its called Paul Simms. not sure they have a website though.


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## 182_Blue (Oct 25, 2005)

We got a 3.39% fixed for 5 years with Yorkshire BS.


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## Matt. (Aug 26, 2007)

Who did you use Shaun?


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## 182_Blue (Oct 25, 2005)

Matt. said:


> Who did you use Shaun?


Yorkshire building society as above


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## Matt. (Aug 26, 2007)

So it was.

That was a remortgage though not FTB?


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## 182_Blue (Oct 25, 2005)

Matt. said:


> So it was.
> 
> That was a remortgage though not FTB?


Yes but i though FTB got a better deal ?, we had a very low loan to value though.


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## White-r26 (Dec 14, 2010)

B17BLG said:


> 6% with nationwide


How many years is that over though??


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## robertdon777 (Nov 3, 2005)

Their (YBS)Mortgage calculator is very very good. and their rates seem very good too.

I'm with The Cheshire (who got taken over by Nationwide) they have some good deals too for FTB.


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## TooFunny (Sep 18, 2012)

kh904 said:


> I agree something isn't correct, it would take nearly 23 years at 0% (paying £500 p/m)!!!


I'm still waiting to hear which magic mortgage this is????


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## kh904 (Dec 18, 2006)

TooFunny said:


> I'm still waiting to hear which magic mortgage this is????


Me too!

OP: so what was the mortgage repayments, amount borrowed & the rate?


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## White-r26 (Dec 14, 2010)

It can only be interest only.. It's impossible to get a mortage for £136k at under £500 a month


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## White-r26 (Dec 14, 2010)

Only way possible


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## TooFunny (Sep 18, 2012)

This is what I said, interest only, but didn't get an answer, I guessed 50 years though. So basically instead of renting its renting from the bank for 40 years unless you come up with the capital its all theirs. Gulp if it crashes....


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## TooFunny (Sep 18, 2012)

And Jesus Christ 1300 a month interest only at 12%, anyone remember the 80's.......


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## bigslippy (Sep 19, 2010)

White-r26 said:


> It can only be interest only.. It's impossible to get a mortage for £136k at under £500 a month


Depends on loan to value ( which will dictate interest rates applicable ) and mortgage term:thumb:


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## robertdon777 (Nov 3, 2005)

TooFunny said:


> And Jesus Christ 1300 a month interest only at 12%, anyone remember the 80's.......


Yeah but 12-15% on 136000 would of purchased a house in Chelsea (nearly haha) in the 80's

or 7, 3 bed semis (where my parets used to live)


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## Rob_Quads (Jul 17, 2006)

TooFunny said:


> This is what I said, interest only, but didn't get an answer, I guessed 50 years though. So basically instead of renting its renting from the bank for 40 years unless you come up with the capital its all theirs. Gulp if it crashes....


In 40 years one would hope that it would put on significant value over the period so its not the same as renting. Yes there is the risk of it loosing but if it has lost over 40 years then this country will be in complete collapse.

IMO interest only is a good way to get started. You get on the lader, get your property, when your not earning quite so much. As you earn more money you can then shorten the term and go repayment.


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## TooFunny (Sep 18, 2012)

Rob_Quads said:


> In 40 years one would hope that it would put on significant value over the period so its not the same as renting. Yes there is the risk of it loosing but if it has lost over 40 years then this country will be in complete collapse.
> 
> IMO interest only is a good way to get started. You get on the lader, get your property, when your not earning quite so much. As you earn more money you can then shorten the term and go repayment.


I understand what you're saying but this is 2012, not 1995, people are generally not getting big pay increases and house prices are the highest they have ever been, so it's not a case that if you buy now in 40 years time they will be worth double of the like, they may well be worth more on the value of objects increasing and the pound being worth less accordingly but generally speaking IMO it is nowhere near a good time to sign up to a 40 year interest only mortgage, renting saves you a considerable amount of money in fixed outgoings, being anything that could could go wrong with the core elements of the house, electrics, gas, water, and all attached to that are covered by the landlord, so this money can be used to save for a bigger deposit whilst waiting to see what happens with the market.

I personally think as do many many others that what we will see once we climb and crawl out of this tripple dip recession is the BOE increasing interest rates substantially, the one and only reason it is being kept at record lows for so long is that unfortunately the UK economy is directly tied to its housing markets....

But hey, what do I know :thumb:


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## TooFunny (Sep 18, 2012)

robertdon777 said:


> Yeah but 12-15% on 136000 would of purchased a house in Chelsea (nearly haha) in the 80's
> 
> or 7, 3 bed semis (where my parets used to live)


Precisely my point fella! :thumb:


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## Rob_Quads (Jul 17, 2006)

I think the difference between renting and owning is less now. Rental prices are much much higher in the last couple years than they have been previously. Taking that 40 year mortgage. There is no way you would get rental on a property for under £500 on a 150K house. It will be more like £700+ maybe £800+

I agree house prices are not going to go up like they did previously but IMO over 40 years they will still go up - yes double. To put it in perspective over the last 25 years they have gone up by 2000%+? so a 200% over 40 years is not exactly pushing the boat out. Over the previous 40 years even if you ignore the last 10 I bet its still way more than a 200% increase.


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## TooFunny (Sep 18, 2012)

My point being though is that they will firstly come down dramatically, and finding yourself on an interest only mortgage payment amount that means it will take 40 years to pay off, will also mean that you will be paying nothing off the net value of the property....what happens when moving house is factored in, there will be no equity in the house whatsoever, only a negative amount....

Personally as always, IMO I think with the climate as it is, and the way it will go over the next 5-7 years, purchasing a house should only be done if you can afford to take the loss, which predominantly means 1st time buyers should steer clear, unless of course they've been gifted £20k+ that they can afford to see disappear!


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## Cambelt (Jul 4, 2012)

If it helps, I am on a full repayment mortgage over 35 years on a property worth over £200k and I am paying £200 less pcm than I was whilst renting a similar property.


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## Rob_Quads (Jul 17, 2006)

I don't think house prices will drop much more. IMO The goverment will artificailly keep the market where it is because of the number of people who would loose thier homes (and cost the government even more) .

I expect the house market to stay fairly stable for the next 3/4 years, with interest rates staying around the same. I don't see any change until the recession really starts to change which we are still a distance away from IMO, specially when other countries in the EU are also ballsing it up so much. Each time it happens it knocks us back a few months


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## alan hanson (May 21, 2008)

for me renting is ideal if you dont want the repair hassle and want to be tied down to one location job etc (appreciate you can move which costs) or family life means its ideal.

I was lucky enough to make on our first house we bought back in 2006 i dont think many other people did (that incuded having a 101% mortgage)

buying is the way to go if you have a steady income and want commitment throughout your life though this doesnt mean you cant change. Its yours cant be asked to leave or rent put up etc... and above all its nice coming back to somewhere that is your home and its not dead money


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## kh904 (Dec 18, 2006)

TooFunny said:


> My point being though is that they will firstly come down dramatically, and finding yourself on an interest only mortgage payment amount that means it will take 40 years to pay off, will also mean that you will be paying nothing off the net value of the property....what happens when moving house is factored in, there will be no equity in the house whatsoever, only a negative amount....
> 
> Personally as always, IMO I think with the climate as it is, and the way it will go over the next 5-7 years, purchasing a house should only be done if you can afford to take the loss, which predominantly means 1st time buyers should steer clear, unless of course they've been gifted £20k+ that they can afford to see disappear!


Pretty much how I see things!
I'm a first time buyer looking around for the last couple of years & property is still waaay overpriced so i've stayed away.

I do believe property VALUES (not necessarily prices) will go down more, I don't believe we've seen real inflation hit the economy just yet. either
The cost of living (ie food & fuel & other commodities) i believe will rise dramatically, meaning people will have less disposable income & less available to save & pay a mortgage.

Taxes overall are also going one way!!!!


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## Ratchet (Dec 30, 2011)

Fixed for 3 years, then when it went variable stayed with that until now, where we have now gone with the Britannia on a fixed 3 year deal again, with a rate of around 4.5% (without checking) @ 75% LTV, no set up fees, no solicitor fees as they use their own and suck up the cost and they even paid for survey.

Haven't had to pay them a penny. :thumb:


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## bigslippy (Sep 19, 2010)

Ratchet said:


> Fixed for 3 years, then when it went variable stayed with that until now, where we have now gone with the Britannia on a fixed 3 year deal again, with a rate of around 4.5% (without checking) @ 75% LTV, no set up fees, no solicitor fees as they use their own and suck up the cost and they even paid for survey.
> 
> Haven't had to pay them a penny. :thumb:


3 yr fixed at 4.5% for 75% ltv sounds a bit high:doublesho


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