it doesn't. i honestly don't understand what he is saying, unless i'm missing the point and once i've paid my mortgage off, i wont own the home outright?
Your chances of owning your own home?
- Thread starter PiKe
- Start date
it doesn't. i honestly don't understand what he is saying, unless i'm missing the point and once i've paid my mortgage off, i wont own the home outright?
really? what about 60 or 50 years?
Soldato
- Joined
- 18 Mar 2010
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It depends where you buy and how good a deal you strike. We bought in central London in 2008, and judging by recent valuation and how much our neighbours properties are going for, it has gone up in value by about 20%. I know our share portfolio and bank savings haven't done that well!
Caporegime
I don't think he realises that an 80% mortgage needs the other 20% up front as a deposit...
Man of Honour
I don't either, unless he's under the misunderstanding that 90%/95% mortgages et al mean that the bank owns the other bit - rather than the deposit making that up.
Can't see anyone making that mistake, mind.
Caporegime
Our house is on a leasehold. It's about 30 years into a 999 year lease or something silly. We pay £10 a month ground rent and there are no onerous restrictions that anyone could find. For the sake of £10 a year it's not worth the trouble of buying out the freehold.
People have been making the mistake of buying houses when they don't have the money and never will.
Which caused a nasty crash, so its hardly like people are as smart as you think.
You'd start having more problems with leases of that length.
i have no reason to not believe you when you say a mortgage company will mortgage on a 70 yr lease but it's a heck of a risk for them and surely they will make some sort of financial add-on because of this?
Caporegime
Well, as far as I remember if you have an 80% mortgage for instance, you never 'completely' own the house, you only own '80%' of it.
Yes, you ca pay off your 80%, but unless the builders for instance offer you the other 20%, it will never be yours 100%
good grief. go and see a mortgage adviser.
i think you may be getting confused with a shared ownership scheme?
No, I do have gold and some silver and have been buying steadily since Lehman bros went up (scared to keep too much money in banks etc basically so spread it about - not in property though)
I have more than enough for a 20% on the average house (something like £161,000 now I believe) I just refuse to pay that amount on something I don't think is worth it.
Sorry if I come across as a nutter saying 'Home buying is wrong!' but I do feel that years of property ownership and ramping by the media, parents friends and family needs a counter to try and bring some sense back! I mean when you step back and think how much the average house is and what the average salary is (£26,000 depending on how you define average) then you can see a big disconnection. At some point it will have to sort itself out and I feel sorry for anyone getting on board now as I think it is a bad point in time.
Man of Honour
No, you couldn't be more wrong. For an 80% mortgage you have to put up 20% as deposit.
Soldato
Like I said its very hard to find the true facts about the position.
But trust me people are not finding it easy to service the debt, some are, but so many have wage reductions/no pay rises/lost jobs/reduced hours etc that a significant portion are struggling.
Best I could turn up with a quick google.
http://www.mirror.co.uk/advice/mone...e-fall-into-mortgage-arrears-115875-22992314/
Repossessions are low due to the last Labour goverment engaging the banks to not make it worse, and look for every possible way to not seek to take possession of the property.
The banks actually saw some benefit in this, so many properties would have had no equity, they would have had to sell them for less than the market value, crystalising the loss at that point. Yes they may have been able to go after the previous owner, but who having just been reposessed would probably just then go bankrupt. So for now they avoid a loss, and they get to keep adding interest to a RISING debt. They can't lose.
I bet you will see soaring reposessions in years to come when the banks start squeezing for bank payments once they start to get a feel that they can actually get their money back.
Not really - because if you think about it, assuming it's a 25yr mortgage and you you start it with a lease life of 70yrs, there may be 50 years left when you're 20yrs into the repayments - but the amount you have to pay will still be a lot less than the impared market value of the house.
Man of Honour
This isn't how it works.
The reason the term "100% mortgage" was popular when things were "good" and is now a very scary thought isn't because you owned the entire property, it was because you could get it with no deposit whatsoever.
For some reason, i am disappointed you even mention that parasitical party.
Soldato
This is basically exactly where I am, looking to maybe dip my toe next year but saving saving for now. I wont buy in London so I dont care about the prices in the loony city, but elsewhere the majority are seeing a slow return to realistic multiplier. Saying that at this rate its still probably 10 years off, but progress is progress.
We really do not know if we are going to see a return to the longer term average multiplier from averag wage to average house or not. I hope so as a healthy economy needs all sectors to be contributing and at the moment a lot of house/building are not.
My view remains short term apart from maybe London your unlikely to see any significant house price inflation, your much more likely to see some deflation. So for me the smart approach is to rent and save hard and just be ready to react to the market, its stagnant right now with as far as I can see only immigration working towards house price inflation, where as you have increasing interest rates to come, increasing mortgage arrears, continued squeeze on peoples pockets with RPI vs wage increases...
Soldato
Well they did everything they could to "soften the bounce" which to my mind was always going to have to happen and imo all they did was delay it.
But never the less that was an action they specifically took to the banks to not make the situation worse.
but say you come to sell and there is only 50 yrs left on the lease. you will get stung because no one will buy with 50 yrs left and no one would get a mortgage with 50 yrs left and the price the lease will cost to get to 99yrs could be high and will have to come off the resale value. if you don't want to sell, you are faced with getting the lease back to ideally 125 years which could cost you an arm and a leg or be faced with the lease running to 0 and you politely being asked to leave.