Born Hunter 17,832 Posted May 29, 2014 Report Share Posted May 29, 2014 Themoocher, if I understand correctly, how can you get a buy to let mortgage to be able to let your property and be in negative equity? I thought most mortgage lenders required 20% equity for a buy to let mortgage? I bought a house for 94k in 2008 to live in and put 10% down on it. In 2011 the same houses were selling for 50-60k. I lived in an army pad for nearly 5 years letting the house out. Left the army and still have it rented out. Thats what im saying I was very very lucky I was in the army with steady job and low rent or I would have walked away from the house and took the hit. In 20 years you'll have a different opinion I bet. I'm still struggling to get my head around your figures but whatever. In 20 years you will have spent little if anything more than you would have done on a rental property but have a property with a 6 figure value to your name. And that folks is the bottom line... Quote Link to post Share on other sites
dare 1,103 Posted May 29, 2014 Report Share Posted May 29, 2014 Suppose everyone watches homes under the hammer and thinks its that easy. If you are doing it in the hope of making profit well anythings gonna come with its risks ain't it? Those who say they've never lost never played. Here's a landlord who you'd wanna pay on time lol. I actually think he seems an alright bloke who says exactly what's on his mind. Quote Link to post Share on other sites
Themoocher 231 Posted May 29, 2014 Report Share Posted May 29, 2014 Themoocher, if I understand correctly, how can you get a buy to let mortgage to be able to let your property and be in negative equity? I thought most mortgage lenders required 20% equity for a buy to let mortgage? I bought a house for 94k in 2008 to live in and put 10% down on it. In 2011 the same houses were selling for 50-60k. I lived in an army pad for nearly 5 years letting the house out. Left the army and still have it rented out. Thats what im saying I was very very lucky I was in the army with steady job and low rent or I would have walked away from the house and took the hit. In 20 years you'll have a different opinion I bet. I'm still struggling to get my head around your figures but whatever. In 20 years you will have spent little if anything more than you would have done on a rental property but have a property with a 6 figure value to your name. And that folks is the bottom line... There nuffing wrong with my figures. I can assure iv watched every penney ervey month and felt sick every month on the 1st lol Quote Link to post Share on other sites
tsteve9999 456 Posted May 29, 2014 Report Share Posted May 29, 2014 Themoocher, if I understand correctly, how can you get a buy to let mortgage to be able to let your property and be in negative equity? I thought most mortgage lenders required 20% equity for a buy to let mortgage? I bought a house for 94k in 2008 to live in and put 10% down on it. In 2011 the same houses were selling for 50-60k. I lived in an army pad for nearly 5 years letting the house out. Left the army and still have it rented out. Thats what im saying I was very very lucky I was in the army with steady job and low rent or I would have walked away from the house and took the hit. In 20 years you'll have a different opinion I bet. I'm still struggling to get my head around your figures but whatever. In 20 years you will have spent little if anything more than you would have done on a rental property but have a property with a 6 figure value to your name. And that folks is the bottom line... There nuffing wrong with my figures. I can assure iv watched every penney ervey month and felt sick every month on the 1st lol I can see one thing wrong with your figures straight away, you've not counted the 25k you've collected in rent. Add on the fact that houses have gone up the thick end of 30% since 2011 and your suddenly starting to see light at the end of the tunnel mate. You've only owned the house for 6 years, in another 6 you will have picked up an extra 30k in rent and it will be worth a good bit more than you paid for it.If you do nothing else but rent it until you retire you will still have the house rented as an add on to your pension or a really good nest egg to retire with if you sell it. Quote Link to post Share on other sites
Themoocher 231 Posted May 29, 2014 Report Share Posted May 29, 2014 Themoocher, if I understand correctly, how can you get a buy to let mortgage to be able to let your property and be in negative equity? I thought most mortgage lenders required 20% equity for a buy to let mortgage? I bought a house for 94k in 2008 to live in and put 10% down on it. In 2011 the same houses were selling for 50-60k. I lived in an army pad for nearly 5 years letting the house out. Left the army and still have it rented out. Thats what im saying I was very very lucky I was in the army with steady job and low rent or I would have walked away from the house and took the hit. In 20 years you'll have a different opinion I bet. I'm still struggling to get my head around your figures but whatever. In 20 years you will have spent little if anything more than you would have done on a rental property but have a property with a 6 figure value to your name. And that folks is the bottom line... There nuffing wrong with my figures. I can assure iv watched every penney ervey month and felt sick every month on the 1st lol I can see one thing wrong with your figures straight away, you've not counted the 25k you've collected in rent. Add on the fact that houses have gone up the thick end of 30% since 2011 and your suddenly starting to see light at the end of the tunnel mate. You've only owned the house for 6 years, in another 6 you will have picked up an extra 30k in rent and it will be worth a good bit more than you paid for it.If you do nothing else but rent it until you retire you will still have the house rented as an add on to your pension or a really good nest egg to retire with if you sell it. Yeah I know mate. That's what I'm saying I was very very lucky I had good steady paying job. Only paying £160 a month rent in forces accom. But not everyone is as lucky as that. All I'm saying is air with caution with property as sometimes you need get past the rough patches Quote Link to post Share on other sites
tsteve9999 456 Posted May 30, 2014 Report Share Posted May 30, 2014 Totally agree with you mate, always make sure you can afford it if times get rough. Best of luck with yours, hopefully you'll have good memories from now on Quote Link to post Share on other sites
Waz 4,274 Posted May 30, 2014 Report Share Posted May 30, 2014 Over borrowing for a mortgage, all part of the credit culture mixed + booms in house prices x interest rate rises = bad times. House I live in I bought as uninhabitable stone cottage, no water, waste or electric. Took a few months to be able to live in it to a half decent standard and done bits when ive had the money which has taken a few years, but dont owe anything on it. Could have had it faster using other peoples money, but id be paying it off still.. happy that ive done that as I have now a steadier income and have used other peoples money to buy another old place, which im probably going to borrow some more money to get be done a lot quicker, sell 1st house and pay a fair whack off, or rent out to cover repayments? 1st house should be worth 3 times what its cost including renovating (on a budget). New house 4 or 5 times as bought in a buyers market, not finshed fixing it up yet. & in 5 or 10 years! Not over borrowing as the pessimistic streak in me is strong, didnt borrow a penny till I was 36, apart from 500 quid for a mk3 escort 17 years ago! That's well and good mate but in todays climate you would have to save 10 mortgage deposits to buy that pile of stone. Borrowing money is perfectly safe, just use a bit of common. Not true, still some very cheap solid houses around, if you have the time energy and money. Very easy to generalise Quote Link to post Share on other sites
Born Hunter 17,832 Posted May 30, 2014 Report Share Posted May 30, 2014 Not true, still some very cheap solid houses around, if you have the time energy and money. Very easy to generalise There are, some properties around the 40k mark, in pretty rough areas but nonetheless affordable. You find me a stone cottage for that money in the UK within 20 miles of an industrial hub though... Then consider how long it'd take a young person to save up enough to buy that property in cash and do it up to liveable.... it'd take your average young professional at least 5 years of living under mum and dads roof and saving almost every penny... Now consider a more realistic scenario where you have a young apprentice/skilled worker on a lower wage and having higher living costs with no parental support. They could just save a 20% deposit and buy a cheapish property in a fraction of that time. Stone cottages requiring renovation aren't cheap, there's a whole wave of property developers that know they can make easy profit on these places. It's largely killed off young people buying these places as doer uper first homes. Of course to buy in cash is do-able. But for the average joe it depends if they wanna be in mum and dads pocket at the age of 30 and have f**k all life through their 20s for a decade of hard saving. There is nothing silly about getting a mortgage, just be sensible. Quote Link to post Share on other sites
Waz 4,274 Posted May 30, 2014 Report Share Posted May 30, 2014 Who said anything about the UK? 1 Quote Link to post Share on other sites
Born Hunter 17,832 Posted May 30, 2014 Report Share Posted May 30, 2014 Who said anything about the UK? So young folks should leave the country in search of a house to buy in cash.... Is that what you're saying? You did, well done, but for the majority that's not an option or desire. So a mortgage makes financial sense. Which was my point. Quote Link to post Share on other sites
Themoocher 231 Posted May 30, 2014 Report Share Posted May 30, 2014 Who said anything about the UK? So young folks should leave the country in search of a house to buy in cash.... Is that what you're saying? You did, well done, but for the majority that's not an option or desire. So a mortgage makes financial sense. Which was my point. I hate banks and I hate mortgages. all this buy now pay later culture fooked the country up in the long run. Now everyone is crippled cause of it. Wages have stayed the same for 10 years earning less on basic wages as fook all overtime and inflation is through the fooking roof. All trying to pay back these bankers fook ups. Does my head in Quote Link to post Share on other sites
RemyBolt 420 Posted May 30, 2014 Report Share Posted May 30, 2014 The real issue is not whether you can get the deposit together. The issue is whether you can get a bank to give you a mortgage on your current income and whether they'll give you the amount required. For example: House Value £100'000 10% Deposit: £10'000 Mortgage required £95'000 The reason the total deposit and mortgage amount is £5'000 more than the value of the house is because it includes all the fees and the alike. Most mortgage lenders will give a maximum of 4x annual earnings for the mortgage value. For example, using the above strutured numbers, you would need to be earning £23'750 a month (£95'000 divided by 4) for them to be likely to give you a mortgage. However, if your mortgage lender will only do a 3x mortgage, you'd have to be earning £31'700 a year. The deposit is just one part you need to look at. The true cost of buying a £100'000 house will probably be closer to £108'000 off the go. Over time (once mortgage free), you'll have paid back closer to £200'000. 1 Quote Link to post Share on other sites
Flipper_Al 1,012 Posted May 30, 2014 Report Share Posted May 30, 2014 Wish i earned 23,750 a month Quote Link to post Share on other sites
RemyBolt 420 Posted May 30, 2014 Report Share Posted May 30, 2014 Wish i earned 23,750 a month There goes your hope of a house....sorry mate. Best trick...the bigger the deposit, the smaller the mortgage, the less you have to earn. Quote Link to post Share on other sites
dare 1,103 Posted May 30, 2014 Report Share Posted May 30, 2014 More and more I am seeing why people are attracted to crime. Surely if your going to work you must stand a chance of being able to buy your own home or what's the point? Who wants to pay someone else's mortgage. Is no way I could afford to live around my area to be honest if buying but I don't think it's that great that I would want to pay the money anyway. Quote Link to post Share on other sites
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