First time mortgage

[Tin Pot]

Oldies have often said it is the wrong time to buy, I remember being told that by lots of people back in 1980.

I also love statements based on market timing

There's a lot of material out there on why trying to time the market is a bad idea in principle and in reality. It's a bit dry, but occasionally humorous...

"This mutual fund flow data seems to indicate that most investors (despite what they may say) actually follow a buy-high, sell-low strategy."
https://en.m.wikipedia.org/wiki/Market_timing

 

[biggs682]

Has she been for a look at both kinds of place for similar money?

no only looked at new shiny places

There are advantages of course, you can just move in and be up and running with no additional fixing costs. I have seen some horror stories about new builds so research the builder very well.
Older houses can often be high maintainence and you don't want to forking out for a new roof when most of your money is going into the mortgage. I once had a 250 yr old cottage and it was always needing work.

we have suggested 1950's build onwards

 

[SteveF]

New mortgages these days are all about affordability and are very strict. They look at what you can afford and place that against interest rates much higher than they are today. They will not lend if you can afford to pay today but cannot afford if rates are 5%. This has been the case for a few years but people with mortgages prior to this may suffer however most of those were already paying 5% which is was the base rate was around pre '08

Interesting link to the BoE historical base rates here... http://www.bankofengland.co.uk/boeapps/iadb/Repo.asp as you say 5% ish around 2008, pre 2001 the numbers begin to look grim (a 5% stress test wouldn't cope against some of those numbers!) hopefully for the buyers of today we won't be going back to those times.

It's a good thing we have a nice stable economy with no shadows looming upon the horizon...

 

[Markymark]

Interesting link to the BoE historical base rates here... http://www.bankofengland.co.uk/boeapps/iadb/Repo.asp as you say 5% ish around 2008, pre 2001 the numbers begin to look grim (a 5% stress test wouldn't cope against some of those numbers!) hopefully for the buyers of today we won't be going back to those times.

It's a good thing we have a nice stable economy with no shadows looming upon the horizon...

Indeed. We've had very low interest rates for the last 8 or 9 years but at least half of those years the lending criteria became much stricter. I would imagine the only issues will arise from around 2008-10 when rates were very low and mortgages approvals weren't quote so strict. However, that was peak market crash and very few houses were being sold so I doubt there will be many mortgages that will be at risk if looked at in isolation. The main problem will come from people creating debts other ways or have grown used to low interest rates and enjoying the disposable income too much.

 

[Tin Pot]

Indeed. We've had very low interest rates for the last 8 or 9 years but at least half of those years the lending criteria became much stricter. I would imagine the only issues will arise from around 2008-10 when rates were very low and mortgages approvals weren't quote so strict. However, that was peak market crash and very few houses were being sold so I doubt there will be many mortgages that will be at risk if looked at in isolation. The main problem will come from people creating debts other ways or have grown used to low interest rates and enjoying the disposable income too much.

The 0% credit card transfer market is building up a nice debt book, how long before they become 1%?

 

[Markymark]

The 0% credit card transfer market is building up a nice debt book, how long before they become 1%?

Judging by the number of very low fixed rate mortgages on offer I imagine the lenders think it will stay low for the next few years at least.

 

[SteveF]

The main problem will come from people creating debts other ways or have grown used to low interest rates and enjoying the disposable income too much.

Agree with that, but another that concerns me is student loans, Daughter 1 has £40k ish being charged somewhere like 4%, it goes up with inflation so prob 6% shortly.. not sure what impact that will have on mortgages in the future.

 

[Beebo]

Indeed. We've had very low interest rates for the last 8 or 9 years but at least half of those years the lending criteria became much stricter. I would imagine the only issues will arise from around 2008-10 when rates were very low and mortgages approvals weren't quote so strict. However, that was peak market crash and very few houses were being sold so I doubt there will be many mortgages that will be at risk if looked at in isolation. The main problem will come from people creating debts other ways or have grown used to low interest rates and enjoying the disposable income too much.

How many couples buy a house on a joint income at maximum leverage, and then have kids, so the second income drops.

That will cause problems if the rates start to rise.

 

[Markymark]

How many couples buy a house on a joint income at maximum leverage, and then have kids, so the second income drops.

That will cause problems if the rates start to rise.

As far as I can remember joint mortgages are always lower ratios than single for that very reason. Interest rates have been going up and down since they came about, it is nothing really new here. The only real difference is that before you could self cert. or even get non disclosure mortgages but those days are long gone.

 

[Tin Pot]

Judging by the number of very low fixed rate mortgages on offer I imagine the lenders think it will stay low for the next few years at least.

Thats a completely different market - credit card transfer debts can rise whenever the creditor feels like they don't need to increase their debt book so much as the market will sustain a rise.

 

[Racing roadkill]

My stepdaughter is desperate to make the step from rented to her own house for her and our grandaughter , she has been told by her mortgage advisor that she could have a £250k mortgage for a new build with the goverment right to buy scheme or £165K on second hand property.

The sheer thought of having a £250k mortgage around your next scares the living daylights out of myself and her mum , but what can you do ?

There is no way on god's green earth I would mortgage myself up, my circumstances dictate that I don't have to. 250 grand is a lot of debt, and in today's money, won't get much ( except where there's nothing much going on ). If my circumstances dictated that I needed the 'security' of a mortgaged property, there's no way I'd go new build. The proportion of these places that are farmed out to 'social housing' effectively means that you end up on a council estate, full of people who are self entitled muppets. That means you are mortgaged up to the hilt, probably stuck next to arsey mc arse face, who doesn't give a crap, and doesn't have to work. Nightmare upon nightmare.

 

[AndyRM]

There is no way on god's green earth I would mortgage myself up, my circumstances dictate that I don't have to. 250 grand is a lot of debt, and in today's money, won't get much ( except where there's nothing much going on ). If my circumstances dictated that I needed the 'security' of a mortgaged property, there's no way I'd go new build. The proportion of these places that are farmed out to 'social housing' effectively means that you end up on a council estate, full of people who are self entitled muppets. That means you are mortgaged up to the hilt, probably stuck next to arsey mc arse face, who doesn't give a crap, and doesn't have to work. Nightmare upon nightmare.

Cool generalisations bro.

 

[vickster]

Cool generalisations bro.

I guess he's happy living with mummy and daddy in his 40s

 

[oldfatfool]

Worst thing they ever did giving the bankers power to set base rate. Base rate of 0 means they pay sweet fa on savings but charge 4% on mortgages and its still seen as low and affordable.

 

[Drago]

In was out the door at 18, rented various rooms off the Queen for a few years.