I have a simple question

firefilesuk · 6 Mar 2010 at 09:42

[TW]Fox;16099664 said:
They take 9% of earnings above £15k.

so for them to take £900 per annum you'd need to gross £25K (above national average) sweet!

mike66uk · 6 Mar 2010 at 10:25

twoblacklines said:
They take like 5% of monthly income, any more and you have to have specified it. Poster isnt happy so doubt hes specified it, so to take £200 a month he must earn £4k a month ? In which case hes rich enough to not worry about the £200 as hes paying it back quicker.

Something doesnt make sense there ?

You pay back 9% of earnings over £15k. Paying £200 per month would mean you earn about £40kpa, which certainly doesn't make you rich, unless you live a long way away from London.

That would leave you, after tax and student loan, with about £2200, minus pension, which for me is another 9.5%, so about another £200.

Minus mortgage payment, for me £1000, minus council tax £150, utilities £100, car payment £300.

So thats £450 left, and I havn't even started on food or petrol yet!

I'd say these outgoings are pretty average for living in even in satellite towns around London.

[TW]Fox · 6 Mar 2010 at 10:31

To be fair though isnt that a pretty huge mortgage you've chosen to take on?

mike66uk · 6 Mar 2010 at 10:42

[TW]Fox;16099870 said:
To be fair though isnt that a pretty huge mortgage you've chosen to take on?

It's only a two bedroom flat bought for £180k, with £149k of that borrowed.

firefilesuk · 6 Mar 2010 at 10:54

mike66uk said:
It's only a two bedroom flat bought for £180k, with £149k of that borrowed.

mortgage term?

£150 council tax?? is that with single person discount.

mike66uk · 6 Mar 2010 at 11:28

25 year repayment mortgage at 5.99%. Ok council tax is slightly less than that, annual amount is £1346.80.

Jez · 6 Mar 2010 at 11:30

mike66uk said:
It's only a two bedroom flat bought for £180k, with £149k of that borrowed.

A £1000pm repayment on a 149k mortgage? Thats clearly a decision you yourself have made, as that repayment is far higher than the figures could possibly add up to over a standard period.

mike66uk · 6 Mar 2010 at 12:10

Jez said:
A £1000pm repayment on a 149k mortgage? Thats clearly a decision you yourself have made, as that repayment is far higher than the figures could possibly add up to over a standard period.

That is the standard amount for a repayment mortgage on this amount at a 5.99% interest rate over 25 years. It's something like £969 per month.

Dogbreath · 6 Mar 2010 at 12:18

Jez said:
A £1000pm repayment on a 149k mortgage? Thats clearly a decision you yourself have made, as that repayment is far higher than the figures could possibly add up to over a standard period.

No it isn't, the interest alone is over £740pm

Kappa · 6 Mar 2010 at 12:23

twoblacklines said:
Poster isnt happy so doubt hes specified it, so to take £200 a month he must earn £4k a month ? In which case hes rich enough to not worry about the £200 as hes paying it back quicker.

Something doesnt make sense there ?

Far from it, £200 is a LOT. I know it's my student loan, and I'm happy it's being paid back. But I would never say that it's hardly anything being taken out. On top of 8% Pension, tax, NI. However we're going onto a pension salary sacrifice scheme (so my gross pay will look less), so the loan payment will reduce in april by quite a bit I think.

Thats £200 extra I could use on a lease!

edit - chap above is right, mortgage around £150k you're looking at ~£1000 payments per mont

Jez · 6 Mar 2010 at 12:27

mike66uk said:
That is the standard amount for a repayment mortgage on this amount at a 5.99% interest rate over 25 years. It's something like £969 per month.

Dogbreath said:
No it isn't, the interest alone is over £740pm

Forgot the mega interest rate on an 82%LTV, i pay around the same for a mortgage 3 times that size at a lower LTV. Ouch. Sucks to be him.

mike66uk · 6 Mar 2010 at 12:32

Jez said:
Forgot the mega interest rate on an 82%LTV, i pay around the same for a mortgage 3 times that size at a lower LTV. Ouch. Sucks to be him.

Yep, I saved up £35k whilst living with parents to make a deposit on my place. I could have saved for longer but I'm 24 now, earning decent money, it was time to leave the nest. I've done that with no handouts from parents ever. But it doesn't suck to be me, it sucks to be about 90% of other people my age who can't afford even what I have.

Moeks · 6 Mar 2010 at 12:32

82% isn't unusually high though really, well not massively anyway.

Jez · 6 Mar 2010 at 12:34

mike66uk said:
Yep, I saved up £35k whilst living with parents to make a deposit on my place. I could have saved for longer but I'm 24 now, earning decent money, it was time to leave the nest. I've done that with no handouts from parents ever. But it doesn't suck to be me, it sucks to be about 90% of other people my age who can't afford even what I have.

It sucks that at higher LTV's rates skyrocket as they do though. Thats a mega repayment given the current situation we are in

Moeks · 6 Mar 2010 at 12:36

At what point do you get a jump to that sort of level anyway? ...I take it the goal posts have been shifted a bit, few years ago it wasn't unusual to hear about people taking on a 90% or even 95% mortage. Albeit probably ill conceived though.

mike66uk · 6 Mar 2010 at 12:37

Jez said:
Forgot the mega interest rate on an 82%LTV, i pay around the same for a mortgage 3 times that size at a lower LTV. Ouch. Sucks to be him.

So you have a mortgage for £450k and say that is 50% LTV? Your house is worth £900k?

I am in the 85% LTV bracket, as I didn't have enough to get under the 80% LTV bracket by a couple grand, which would have reduced it by about 1% or something.

Pretty depressing you're living in a place like that for the same as what I'm paying in a place like this!

Kappa · 6 Mar 2010 at 12:37

Jez said:
It sucks that at higher LTV's rates skyrocket as they do though. Thats a mega repayment given the current situation we are in

That's the issue

I could keep on justifying staying at home, saving up, to get that cheaper mortgage. But I could end up doing it forever!
Then when I have a big deposit, I might think hmmm I can get a better house.... LTV increase... BANG back where I started!

Jez · 6 Mar 2010 at 12:39

Moeks said:
At what point do you get a jump to that sort of level anyway? ...I take it the goal posts have been shifted a bit, few years ago it wasn't unusual to hear about people taking on a 90% or even 95% mortage. Albeit probably ill conceived though.

A quick glance around reveals the the goalposts have become fairly ridiculous, 70% seems to be the threshold for some of the better deals, with 60% being ideal. I guess this allows the banks to advertise attractive rates while keeping most customers stitched up with excessive rates.

Jez · 6 Mar 2010 at 12:42

mike66uk said:
So you have a mortgage for £450k and say that is 50% LTV? Your house is worth £900k?

I am in the 85% LTV bracket, as I didn't have enough to get under the 80% LTV bracket by a couple grand, which would have reduced it by about 1% or something.

Pretty depressing you're living in a place like that for the same as what I'm paying in a place like this!

My situation is complicated, unfortunately for me it is not as simple as a single 900k house

As time passes and lending becomes more available i am sure we will start to see better higher LTV rates becoming available, so just bide your time i guess..

mike66uk · 6 Mar 2010 at 12:45

Kappa said:
That's the issue I could keep on justifying staying at home, saving up, to get that cheaper mortgage. But I could end up doing it forever!
Then when I have a big deposit, I might think hmmm I can get a better house.... LTV increase... BANG back where I started!

This is exactly the position I found myself in. Got myself a decent job, saved for ages, banks screw up and now need us to dig them out of it, cue me paying £1000 per month to live in a 2 bed flat!

I couldn't stay at home any longer tho. These first years are the hardest ones tho, my pay will increase and my LTV will go down, so if I get through this rough period ok then things will get better as my income goes up and expenses go down.