Graeme
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Registered: 26th Jul 04
Location: Northampton
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I have friends who say it's to hard to save to get there own place etc. But still buy lots of little things, go on holiday etc.
I lived like a tramp for a year and managed to save £35k between us, not on big wages at all either.
Sell what you can, don't go out, prioritise aswell.
Yeah a night out may be good but for every £100 now. It could be £300 off your Mortage 25 years down the line.
[Edited on 03-10-2013 by Graeme]
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John
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Registered: 30th Jun 03
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There's a big sign for the houses in my estate advertising the homebuyer 95% thing.
It's all family homes which cost a fair bit, there is absolutely no way that they should be offering that kind of deal on them. For that reason alone, without even reading anything else about it, it's not a good idea.
Enabling people to get in way above their head.
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Paul_J
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Registered: 6th Jun 02
Location: London
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quote:
Originally posted by Graeme
I have friends who say it's to hard to save to get there own place etc. But still buy lots of little things, go on holiday etc.
I lived like a tramp for a year and managed to save £35k between us, not on big wages at all either.
Sell what you can, don't go out, prioritise aswell.
Yeah a night out may be good but for every £100 now. It could be £300 off your Mortage 25 years down the line.
[Edited on 03-10-2013 by Graeme]
This is good advice. I moved back with my parents for a few years to help save for mine. Most people would not want to do that considering I was 26/27 years old at the time, but it was a sacrifice I was willing to make. Equally drove round in a 13 year old s2000 while most of my friends drove brand new lease cars... rarely buy any clothes. Generally buy most things I want 2nd hand - whether it's my push bike, television, gadgets etc
I'm a bit gutted I missed this Help To Buy scheme - would've been nice to have money interest free for 5 years! However, it does make me concerned that the people who will generally use it, are the people who were unable to save the deposit in the first place... Therefore when they're paying out for their mortgage, bills, etc - how are they thinking they're going to repay this loan in 5 years? 
I mean, you hear stories about people saving £10k... then taking £40k in loan interest free... then mortgaging the rest.
£40k is a lot to pay back in 5 years when you have a lot of outgoings like your mortgage etc and you have struggled to save 10k!
- So, perhaps you plan on not paying back within 5 years? But then the loan will compound with interest year on year and if house prices go up - the loan goes up as it's 20% of the house price, not a fixed financial amount (like a mortgage loan). A lot of people going to get in sticky water in 10-15 years with it, especially if the rates go up a lot.
[Edited on 03-10-2013 by Paul_J]
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deano87
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Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
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Paul_J, Help to Buy in its currently format is equity loan so there is nothing to pay back unless you sell the house. Or you can buy back in 10% chunks. There is an annual fee of about 3% or something like that after the first 5 years.
Then Mortgage Guarantee (the latest one) is just the government guaranteeing the mortgage in the event of default.
I think the schemes are good for people renting, than can only afford to save so much. But they're in the habit of paying bills etc.
People living at home, in the right circumstances, should be able to save a lot if they really want it.
I agree, I need to and could save more. Unfortunately due to Lily's situation and parents, she is essentially paying out what she would if we lived on our own.
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John
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Registered: 30th Jun 03
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As long as you are armed with all the facts and can work a calculator, it might be good for you.
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Paul_J
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Registered: 6th Jun 02
Location: London
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quote:
Originally posted by deano87
Paul_J, Help to Buy in its currently format is equity loan so there is nothing to pay back unless you sell the house. Or you can buy back in 10% chunks. There is an annual fee of about 3% or something like that after the first 5 years.
Then Mortgage Guarantee (the latest one) is just the government guaranteeing the mortgage in the event of default.
I think the schemes are good for people renting, than can only afford to save so much. But they're in the habit of paying bills etc.
People living at home, in the right circumstances, should be able to save a lot if they really want it.
I agree, I need to and could save more. Unfortunately due to Lily's situation and parents, she is essentially paying out what she would if we lived on our own.
Ah I didn't realise it was equity loan like that... cool - so you basically just have to pay off the interest each year? like an interest only mortgage?
- Ah! So you won't have the situation I mentioned where the debt keeps building and building - that's pretty cool then!
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Gavin
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Registered: 3rd Apr 02
Location: West Midlands
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quote:
Originally posted by Graeme
Yeah a night out may be good but for every £100 now. It could be £300 off your Mortage 25 years down the line.
Bang on!!!
I've been working on some figures recently, and although I could afford a mortgage with a low deposit its shocking when you take a look at how much interest you're paying back on the total mortgage amount
Obviously there is a threshold, otherwise people spent years and years saving up so that they can buy outright 
I was tempted to go in with between 5-10% deposit... but I'm seriously reconsidering. An extra 6-12 months of saving could wipe out thousands that would have went straight into the banks back pocket!
pew pew pew pewwwww
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pow
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Registered: 11th Sep 06
Location: Hazlemere, Buckinghamshire
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No government scheme is made to help the public in the long term
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Ian W
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Registered: 8th Nov 03
Location: Wirral, Merseyside
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quote:
Originally posted by Graeme
I have friends who say it's to hard to save to get there own place etc. But still buy lots of little things, go on holiday etc.
I lived like a tramp for a year and managed to save £35k between us, not on big wages at all either.
Sell what you can, don't go out, prioritise aswell.
Yeah a night out may be good but for every £100 now. It could be £300 off your Mortage 25 years down the line.
[Edited on 03-10-2013 by Graeme]
This is bang on, all you hear from people is that they can't afford to buy or get there own place when in reality they mean they can't live it up and get there own place.
I rented for years but moved back in to my parents house in January this year to start saving, it's tough as now I have much more money but spend as little as possible every month, it's working though and there's no better incentive than seeing the deposit savings going up every month
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John
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Registered: 30th Jun 03
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Just got a text through so her are some exact figures and how bad an idea it is.
£355,000. You pay £17,750. Help to Buy Scotland contributes £71,000. Lender provides £266,250.
That sounds amazingly sensible, being able to buy a £355k house with £17k deposit
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Ian W
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Registered: 8th Nov 03
Location: Wirral, Merseyside
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Personally none of the schemes are for me, would rather just do it the old fashioned way and save up.
Wouldn't want it hanging over me that other than my mortgage there is still another debt to pay with regards to owning the house.
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Xs
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Registered: 12th Apr 02
Location: Lanarkshire
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I thought that on this scheme it was just a guarantee on a percentage of the value. Therefore it should make no difference to a standard mortgage unless you default? The government don't actually put money in to the property, so you don't need to pay it back.
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deano87
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Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
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quote:
Originally posted by Xs
I thought that on this scheme it was just a guarantee on a percentage of the value. Therefore it should make no difference to a standard mortgage unless you default? The government don't actually put money in to the property, so you don't need to pay it back.
Exactly that.
Non of the Help to Buy schemes in their current state have repayable loans prior to the property being sold. With the original, the government essentially owns 20%.
With the new Guarantee, it is likely that with 15% of the loan guaranteed upon default, the interest rates for a 95% LTV under the scheme will be equivalent to 10% rates.
No details on how long the guarantee is in place for (supposedly 7-8 years). Details out tomorrow apparently.
This is an interesting blog type article:
http://www.bbc.co.uk/news/business-24427274
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AndyKent
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Registered: 3rd Sep 05
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4.99% 2 year fixed they were mentioning on the radio this morning.
From my research 10% deposit gets you down to 4% - quite a difference! Doesn't look like the scheme saves you that much in any case!
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Ian W
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Registered: 8th Nov 03
Location: Wirral, Merseyside
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quote:
Originally posted by deano87
quote:
Originally posted by Xs
I thought that on this scheme it was just a guarantee on a percentage of the value. Therefore it should make no difference to a standard mortgage unless you default? The government don't actually put money in to the property, so you don't need to pay it back.
Exactly that.
Non of the Help to Buy schemes in their current state have repayable loans prior to the property being sold. With the original, the government essentially owns 20%.
With the new Guarantee, it is likely that with 15% of the loan guaranteed upon default, the interest rates for a 95% LTV under the scheme will be equivalent to 10% rates.
No details on how long the guarantee is in place for (supposedly 7-8 years). Details out tomorrow apparently.
This is an interesting blog type article:
http://www.bbc.co.uk/news/business-24427274
Done some more reading in to this and I stand corrected! I was thinking it was more of a shared ownership scheme.
Still don't think it is something for me, the simple example they have given on the bbc website mirrors what someone said earlier, you can get a £200,000 house with a £10,000 deposit, seems like where venturing back in to the times of people buying way beyond there means (IMO).
Then again I live in the north where I can get a nice two bed house with a drive way for just over 100k 
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Hammer
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Registered: 11th Feb 04
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quote:
Originally posted by AndyKent
4.99% 2 year fixed they were mentioning on the radio this morning.
From my research 10% deposit gets you down to 4% - quite a difference! Doesn't look like the scheme saves you that much in any case!
If that is the case this particular part of the scheme is a waste of time for anyone other than those that don't have the discipline or patience to save a decent deposit.
A decent deposit will get you lower than 4% just now.
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Marc
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Registered: 11th Aug 02
Location: York
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So the catch appears to be higher repayments?
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deano87
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Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
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quote:
Originally posted by Marc
So the catch appears to be higher repayments?
Slightly higher repayments.
They say with a 5% deposit on the Mortgage Guarantee scheme will have rates equivalent to 10% deposits.
On the Nationwide Save to Buy £100,000 property, £95,000 mortgage it's 5.59% (4.7% APR). Whereas you change it to £90,000 mortgage and it's 4.59% (4.3% APR).
Luckily, I'll be in a position to do 10% on a very low value property and not far off what we want if we save really hard first 4 months of the year. We'd only then need fees.
Looks like house warming round mine August bank holiday might be achievable!
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Hammer
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Registered: 11th Feb 04
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The interest rate is significantly higher, it's a con.
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deano87
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Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
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Figures I quoted are fixed for 5 years and 25 period. imho on a non-government helped scheme that's not too bad considering rates are likely to rise in 5 years.
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John
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Registered: 30th Jun 03
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You'll regret fixing at 5% for 5 years.
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Hammer
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Registered: 11th Feb 04
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quote:
Originally posted by deano87
Figures I quoted are fixed for 5 years and 25 period. imho on a non-government helped scheme that's not too bad considering rates are likely to rise in 5 years.
Having arranged finance for my first home in the last month I can tell you that those interest rates are terrible in comparison with what is out there just now.
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deano87
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Registered: 21st Oct 06
Location: Bedfordshire Drives: Ford Fiesta
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quote:
Originally posted by Hammer
quote:
Originally posted by deano87
Figures I quoted are fixed for 5 years and 25 period. imho on a non-government helped scheme that's not too bad considering rates are likely to rise in 5 years.
Having arranged finance for my first home in the last month I can tell you that those interest rates are terrible in comparison with what is out there just now.
On what LTV?
On the original Help to Buy equity loan schrme Nationwide were doing a rate of about 2.57%! That's the bonus of 75% LTV!
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1986
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Registered: 19th Jun 13
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no really read much in the thread so don't know if its already been covered, bought a house 2 year ago and none stop worked on it, basically onto the last room now everything apart from the front door has been changed, does this scheme mean house prices may rise ?
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Paul_J
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Registered: 6th Jun 02
Location: London
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quote:
Originally posted by Hammer
quote:
Originally posted by deano87
Figures I quoted are fixed for 5 years and 25 period. imho on a non-government helped scheme that's not too bad considering rates are likely to rise in 5 years.
Having arranged finance for my first home in the last month I can tell you that those interest rates are terrible in comparison with what is out there just now.
Agreed... I've got 2.19% ...
[EDIT] Although I forgot deano is looking at 90% LTV ... So ~4% isn't too bad I guess as long as he can afford it.
[Edited on 09-10-2013 by Paul_J]
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