Danny_Boy Posted September 23, 2013 Share Posted September 23, 2013 It's just the deposit that's the problem! How is anyone supposed to magic up the 10-12k for a deposit on a reasonable house? The repayments would be affordable just not deposit! There are 95% schemes available I don't think a £6k deposit is an unreasonable request from a bank to ask. Having savings shows you are good with money and probably more likely to be able to manage mortgage payments. Lending at 100% is silly risky to lenders and to borrows and even as a broker who would make a lot more money if 100% mortgages were available I hope they never are. The people that struggle the most are ones that choose to rent earlier on as it's harder to save a deposit whilst paying rent but to be honest and please take this the right way, a couple with a household income of £50k pa should be able to save a small deposit for a home. (Obviously I no nothing of your circumstances so I could be way out). ---------- Post added 23-09-2013 at 19:50 ---------- Renting all the way. I cannot understand for the life of me, WHY anyone would wish to buy a house nowadays. I'm with the poster who mentioned its the 'British' mentality in owning their own home. Far be it from me to choose which of Sheffield's areas have let's be honest - gotten worse over time especially the areas which have the highest crime rate/anti social behaviour and who are trapped in that house. With renting, I can easily give my landlord the couple of months notice whilst finding somewhere else to live in I live in Walkley which I am delighted to say, is one - if not - the best place I've ever had the joy and pleasure to live. I also don't pay that much per month for a 4 bed house which in effect, caters to every need, whim and facility we require. I'd also point out that you are trapped into working until death to pay off your mortgage, something which banks of the UK, will gladly deprive you of should you fail to cough up per month. I know which eventuality gets you homeless quicker - and it's certainly not renting. Good for you, but do you not worry about what you will do when you retire? Will you still be able to afford the rent? Link to comment Share on other sites More sharing options...
RutlandFlyer Posted September 23, 2013 Share Posted September 23, 2013 The rates are so high on 95% mortgages that you're better off continuing to rent until you've got 10% (or 10.5% - the rates drop quite sharply when you go above that). Link to comment Share on other sites More sharing options...
angos Posted September 23, 2013 Share Posted September 23, 2013 Yes I mean if a young person has a well paid job and not planning on further or higher education; is in the fortunate position to live with parents; doesn't pay much board; and knows at 16 that they'll have to forgo smoking, drinking and generally frittering their money on enjoying themselves with their mates just to get on the property ladder then I suppose they could do it. Assuming that at 16 a kid has the foresight to know exactly what they want! My kids have an house because they had the foresight to realise the world didn't owe them a living, they started work at 16, paid board and continued to study, instead of smoking, drinking and generally frittering their money away. Its a matter of choice, some want their cake and eat it. Link to comment Share on other sites More sharing options...
poppet2 Posted September 23, 2013 Author Share Posted September 23, 2013 Good for you, but do you not worry about what you will do when you retire? Will you still be able to afford the rent? Well the advantage here is that if you retire with just your pension to live on, you get housing benefit. If you own your own property and fall ill, you may have to sell your house to pay for the care home you end up in. Link to comment Share on other sites More sharing options...
Robbie Loving Posted September 23, 2013 Share Posted September 23, 2013 To all the people whose stock response to someone saying they can't afford to get a deposit together is "don't drink, don't smoke, don't go out, don't buy anything". You do realise that if they all did that our economy would collapse overnight, right? Economy collapse? Overnight hey? Maybe over time.... Collapse altogether, unlikely too. Surely in practice the single biggest factor affecting the rent of a property is the cost of the landlord's mortgage, so therefore whenever interests rate go up, rents will follow suit? Every buy-to-let landlord sets the rent at their mortgage payment plus a bit extra to cover maintenance, so won't renting always be more expensive? You'd be surprised how many landlords have mortgage payments higher than they would yield as a rental income. Some are happy to pay extra so the mortgage is paid quicker. Some have payments more than half of what rental income they will receive. Each landlord is different. Interest rates will have a baring on the rental that would be looked to be held, but it's not the main factor. The rates are so high on 95% mortgages that you're better off continuing to rent until you've got 10% (or 10.5% - the rates drop quite sharply when you go above that). 5% schemes can have interest rates in their 3%'s. Which I believe the poster as referring to. 5% mortgages on the other hand are another matter. There is a difference between the 2, which I can explain if you need me to. Link to comment Share on other sites More sharing options...
avidcameron Posted September 23, 2013 Share Posted September 23, 2013 You can have security as a tenant, simply ask to sign a longer term fixed contract. It gives the landlord some security as well. Most rental agencies only permit six-month tenancies.Moreover some BTL landlords are insolvent and houses are repossessed.Have you ever been a tenant ? Link to comment Share on other sites More sharing options...
Bruno Posted September 23, 2013 Share Posted September 23, 2013 I thought an interest only mortgage is one where you only pay off the interest, you don't pay off any of the money you borrowed. So after 25 years you'll still owe tens or hundreds of thousands of pounds??? It's the cheapest way of renting Link to comment Share on other sites More sharing options...
Danny_Boy Posted September 23, 2013 Share Posted September 23, 2013 Well the advantage here is that if you retire with just your pension to live on, you get housing benefit. If you own your own property and fall ill, you may have to sell your house to pay for the care home you end up in. The way things are going I doubt they'll be any housing benefit when I retire haha. Link to comment Share on other sites More sharing options...
Bruno Posted September 23, 2013 Share Posted September 23, 2013 Another benefit of owning your own home is you maybe more inclined to look after it. Link to comment Share on other sites More sharing options...
poppet2 Posted September 23, 2013 Author Share Posted September 23, 2013 How come is because they don't put enough aside to pay it off. It's not magic, the full value will be due when the mortgage ends, there's 25 years to prepare for it, no surprises or tricks involved. At some interest rate, renting becomes cheaper in the long term. The idea if an 'interest only' mortgage is frightening. Imagine people taking this type of mortgage out in their mid 30s, then in their 60s, discover after paying all the interest, they can't find the re-payments for the property. If the bank repossesses, would they even get anything back? I suppose not if they've only been paying the interest for 25 years, unlike if they took out a 'Repayment mortgage'. They would have been no better of renting for 25 years. Link to comment Share on other sites More sharing options...
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