Mortgage Payments - WHat Do Feel Comfortable Paying

[Old Hack]

I was on £18k salary/year paying off a flat around £50k in london many many years ago, the mortgage back then was only around £350 /month which paid off the capital also; but life was tough because the other living expenses brought me down. Now I got a £500k mortgage on my current place and I feel very comfortable on my £1.9k / month interest only payments. I got a big warchest to survive for 2-3 years without working. Back when I was paying only £350 / month for my old £50k mortgage I was living from month to month in an awful permie job without any means of saving.

Also made a 110% profit on my old £50k mortgaged place after I sold and making a 38% profit on my new place if I sold today and I feel more comfortable than ever.

So go figure.

Erm, why not use this to bring the cost of the house right down, reducing the interest payments, lessening the load? If you are confident about work, start building up a warchest again. I think anyone with a warchest over 12 months would be insane anyway, for it you cant find work inside a year, time to get temping drivign a froklift or anything else.

Madness. I smell sockie

[sasguru]

But if you buy for 200K, and sell for 300K, you've only got 200K to settle up with your lender when you sell, leaving 100K in your pocket.

Or have I got that wrong somewhere?

That would have worked in the nineties or early noughties, not now. Where is a property going to appreciate by 50% other than the very elite billionaire pads.?
If anything the expectation should be for a downside.

[vetran]

Overpayment Calculator: Pay off your debt early...

interest is compound.

[Old Hack]

That would have worked in the nineties or early noughties, not now. Where is a property going to appreciate by 50% other than the very elite billionaire pads.?
If anything the expectation should be for a downside.

I bought a run down bungalow for 215, spent 70k on it, now valued at £375k

You can still make a lot of money.

[alreadypacked]

I bought a run down bungalow for 215, spent 70k on it, now valued at £375k

You can still make a lot of money.

If you can find a property, that is undervalued, and doesn't have any hidden issues.
Have good tradesmen that don't rip you off.
Have cash, and good credit.

I am not saying it can't be done, it's a risk and you can have problems.

The biggest thing you can't control is the market.
When it crashes, its not pretty.

What do you do with your 215k bungalow, you have spent 70k on, when it worth half of what you have paid? You may have to stay put for about 10 years.

So before you buy something you have to ask yourself what would you do if the worst happened?
Could you see yourself living there for the next 10 years, could you afford to live there?
Could you rent it out?

[Doggy Styles]

That would have worked in the nineties or early noughties, not now. Where is a property going to appreciate by 50% other than the very elite billionaire pads.?
If anything the expectation should be for a downside.

Yes of course, but I was only plucking numbers out of the air to make the general point that an interest-only mortgage isn't quite the same as renting, in that you can make a capital gain (or loss!).

[Jase]

Hi All

I am about to take the plunge and buy a house in Wimbeldeon. I have a 25% deposit and am looking to borrow 550K. Halifax have a 3.69% mortgage which means that monthly repayments are 3K a month.

In the grand scheme of things 3k a month is not a lot if you are on 525 a day - The problem is what happens if you lose your contract!! I have some savings left after the mortgage (about one years worth) in the war chest but the question for you intelligent folks are....

What mortgage monthly repayment wiould you start to feel stretched at? Is 3K a month in mortgage payment a lot??

I just purchased an apartment in Elephant & Castle, same lender and same rate. Borrowed a lot less and my monthly repayments are about £1,800. I think this is a personal decision but given you asked the question, I do think £3k is a lot. I'm not too comfortable with £1,800 but made sure I got a two bedroom apartment so, worst case, I could get a lodger in short term. Would you be prepared to look at these alternatives if need be?

Jase.

[SantaClaus]

I bought a run down bungalow for 215, spent 70k on it, now valued at £375k

You can still make a lot of money.

A property is only worth as much as someone is willing to pay for it.

[MaryPoppins]

I just purchased an apartment in Elephant & Castle, same lender and same rate. Borrowed a lot less and my monthly repayments are about £1,800. I think this is a personal decision but given you asked the question, I do think £3k is a lot. I'm not too comfortable with £1,800 but made sure I got a two bedroom apartment so, worst case, I could get a lodger in short term. Would you be prepared to look at these alternatives if need be?

Jase.

Codswallop

[Doggy Styles]

Codswallop

Mary!