Is buying residential property now unwise?

[jonneymendoza]

Don't you just love contactors that haven't a clue what's going on around them... The above is just the tip of the iceberg. I suggest you go digest everything in this part of the forum....

The Future of Contracting

Dont you just love people born in this world who knows everything about contracting.

o wait..

[northernladuk]

Dont you just love people born in this world who knows everything about contracting.

o wait..

Well I was interested enough in what I do be aware of potential nightmare that nearly hit and to try understand the fall out. All you need to know is it didn't and you can put your head in the sand again.

[jonneymendoza]

Well I was interested enough in what I do be aware of potential nightmare that nearly hit and to try understand the fall out. All you need to know is it didn't and you can put your head in the sand again.

But you wasn't born with this knowledge and had to read /ask about it too. Same thing I'm doing now.

[northernladuk]

Anyway.. We are in the professional forums. Back on topic.

[uk contractor]

Thanks for your reply UKC!
what would you say 'your means' are? As a contractor would you peg means against your equivalent permie income (plus any other income you may have), lowest ever achieved day rate, some other figure? Obviously dependant on your financial situation there would be other figures to take into account, for example if you had kids, maybe a debt to pay etc etc

Use commonsense just live well within your means.

I would base it on what is my mortgage now how much can I afford if interest rates rise to say 4-5%. Try to allow enough money to cover that its unlikely to go that far but its uncertain how much it will rise. 2-3% in the next few years is possible. 4-5% is worse case scenario. Even a 1% interest rate rise on a £250k mortgage is a massive amount of money so imagine how much if you borrow more. A £250K contractor mortgage is a massive financial commitment BTW @ 2.99% is the best rate you can get right now via Clydesdale Bank I believe with a minimum 10% deposit.
IT Contractor Mortgages Information and Quotation :: Contractor UK

So look at your contractor salary then x4.5 is the max mortgage you can get for a contractor mortgage (with Clydesdale Bank that is) but if you are basing it on that you are really on the edge of disaster when interest rates rise. To play safe go for x2.5-3 your current salary is probably the highest you should go for but it also depends on how much deposit you have to play with & how much your living costs are!

[jonneymendoza]

Use commonsense just live well within your means.

I would base it on what is my mortgage now how much can I afford if interest rates rise to say 4-5%. Try to allow enough money to cover that its unlikely to go that far but its uncertain how much it will rise. 2-3% in the next few years is possible. 4-5% is worse case scenario. Even a 1% interest rate rise on a £250k mortgage is a massive amount of money so imagine how much if you borrow more. A £250K contractor mortgage is a massive financial commitment BTW @ 2.99% is the best rate you can get right now via Clydesdale Bank I believe with a minimum 10% deposit.
IT Contractor Mortgages Information and Quotation :: Contractor UK

So look at your contractor salary then x4.5 is the max mortgage you can get for a contractor mortgage (with Clydesdale Bank that is) but if you are basing it on that you are really on the edge of disaster when interest rates rise. To play safe go for x2.5-3 your current salary is probably the highest you should go for but it also depends on how much deposit you have to play with & how much your living costs are!

I honestly wouldn't based it on contract salary task it's generally much higher then a permanent salary. I would base it on a typical perm salary of the type of job u do mate.

[MrMarkyMark]

I would base it on a typical perm salary of the type of job u do mate.

Errrr.....why?

He probably won't be able to buy feck all then

[northernladuk]

Errrr.....why?

He probably won't be able to buy feck all then

He won't get what you are saying. Lol.

[jonneymendoza]

Errrr.....why?

He probably won't be able to buy feck all then

Lets Assume a perm equivalent earns 50k(but he himself is a contractor earning 400pd)

50k x 4 is 200k.

He can get a flat on the outter parts of london for that price.

When his out of work or if ever the gov really crack down on contracting and he decides to go perm for 50k he will still be able to afford to pay his mortgage.

i got a mate whos a contractor and the mortgage advisor said he can get a 1million quid yard lol i told him what happens if contract market dries up? he be ****ed.

I recommend the OP gets a 200/250k max flat, pay that off in 5-7 years(assuming his still in the contract game and sell up for a profit and let him go buy that half a million 3 bedroom yard. Done.

Gotta think beyond tomorrow mate.

[MrMarkyMark]

I recommend the OP gets a 200/250k max flat, pay that off in 5-7 years(assuming his still in the contract game and sell up for a profit and let him go buy that half a million 3 bedroom yard. Done.

Gotta think beyond tomorrow mate.

You're wasted in this game mate, have you thought of becoming a mortgage advisor