Why do people think they are entitled to home ownership?

[Danny_Boy]

There used to be people filling out their application forms that were self employed, I understand they could write what they wanted.

I have one child that is 16 and very little contact, not a clue how to declare this.

 

I think you're referring to what used to be called self cert mortgages which are now no longer available.

 

Lenders ask for bank statements and payslips as do brokers. Bank statements are very revealing and brokers are actively expected to ask questions regarding their clients spending and income. If a client tells me they don't have children but I can see child benefit paid into their account it does not look good.

 

Re your personal situation, see Cyclones post as that is exactly right.

[El Cid]

The link from moneysavingexpert puts a £70k mortgage in the red, as unlikely to get, I want a little less.

[Danny_Boy]

My repayments for a 20 year mortgage would be £324.70, which is £2 less than I pay in rent, but they will need to take my pension into account, I am hopeful.

 

I know it sounds harsh but forget about the monthly payments, interest rates are at all time low and lenders are quite worried about what will happen when rates rise, for that reason they do stress testing. They will check that you can afford they payment now and that you could afford the payment on their standard variable rate and then standard variable rate + 2%.

 

£65k over 20 year at 7% is £504 a month.

Edited August 15, 2016 by Danny_Boy

[Cyclone]

Apparently the rules say that they have to look at affordability if interest rates went up to 6 or 7 %, although that now seems highly unlikely in the short to medium term. It's still likely in the longer term that rates will go up though.

 

---------- Post added 15-08-2016 at 11:15 ----------

 

I don't understand the issue or even why this is getting so much attention in terms of people getting on to the property ladder? I find it really striking how different we are compared to continental Europe where renting is considered the norm.

 

People need to understand that owning your own home isn't some kind of entitlement that requires government intervention. It is a matter of living within your means and if that means renting, then so be it.

 

Going back to the OP (and possibly echoing someone else's comments), I think it's an aspirational thing rather than a sense of entitlement.

It was something the government started encouraging in the early 80's? Or possibly even earlier.

[El Cid]

£65k over 20 year at 7% is £504 a month.

 

Any sensible person would pay the £504 before their other outgoings, I guess some people are not sensible tho

 

I am thinking about various options to increase my yearly earnings in the future.

[Cyclone]

It's not about how people prioritise, it's about whether it's still affordable AT ALL when the payments go up by £175/month. That's a 50% increase in what is probably one of the largest monthly bills, someone who's already at the edge of their affordability would quite possibly be pushed over it. And whilst they can prioritise for a while and put other payments off, ultimately it would be unsupportable (if they had already been living on or close to the edge).

[Chelle-82]

Having a mortgage and owning your own home is not an entitlement and is certainly not something the government will bail you out of if you get into financial difficulty.. A mortgage is one of the biggest financial commitments you will ever make in your lifetime and the loan is between you and the mortgage lender and they WILL reposses your home if you don't make the agreed, regular repayment. The government has nothing to do with that..

 

Like myself, the majority of people who want to own their own homes so that when they retire they will not be having to find rent every month out of their pensions.. The stability of being able to live off of our pensions comfortably and assurance of always having a roof over your head is a major factor for most home owners.. There will also be those who will retire and sell their homes to buy something smaller and splash the rest of the cash enjoying their retirements, still not having to find the rent money every month!

 

Also, i think of my daughters future! i want to be able to leave her something, whether she wants to live in the house or sell it after i've gone it is entirely up to her but at least i won't have to worry about her financially once i've kicked the bucket.. To be able to be in a position to leave my daughter a house is something that gives me great comfort..

[truman]

And when will you get to use that £150,000 of money invested?

 

I could use mine now via an equity release plan..I'd still be able to live in my house rent free..the tab would be picked up when I popped my clogs and the house was sold..

[Mister M]

Because it's right that people who are able to pay for their own home should have the ability to buy one and therefore put themselves in a better financial position.

 

It's not an entitlement for anyone to own their own home but it's wrong if you work and earn money which could pay a mortgage but instead are unable and have to pay equal or more in rent (in private renting to better someone else's financial position).

 

---------- Post added 14-08-2016 at 20:17 ----------

 

 

It's entirely upto the individual of course but if you can afford to buy, and choose to rent, then that's a financial decision that will ultimately leave you worse off. If you're not bothered about being worse off - then you don't have a problem.

 

I agree with this. Buying your own home is preferable financially. I'm working but cannot afford to buy. However I do rent a flat from a HA, for which I'm eternally grateful for....There is talk at the moment of the HA being privatised consequently existing tenants are naturally worried about their future.

It does seem very unfair that little protection is afforded to those renting, while Government focuses on those who are able to own, or aspire to own their own properties.

[unbeliever]

I agree with this. Buying your own home is preferable financially. I'm working but cannot afford to buy. However I do rent a flat from a HA, for which I'm eternally grateful for....There is talk at the moment of the HA being privatised consequently existing tenants are naturally worried about their future.

It does seem very unfair that little protection is afforded to those renting, while Government focuses on those who are able to own, or aspire to own their own properties.

 

When dealing with a financial arrangement between 2 free citizens, government intervention on one side or the other does not increase net protection, it only expensively moves it from one to the other.