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Thread: How Vile 2

  1. #1
    On a Sabbatical VauxVeteran's Avatar
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    Default How Vile 2

    Mortgage statement arrived today, I pay nearly 6k per year on a repayment mortgage, it's been active for 7 yrs now and it's paid off 14k in that time, so they've had 42k from me and taken 28k in interest, how can that be right, if you read it in the simple way it's 66.6% interest, if anyone reading still lives with mum, get on a plane and leave now while you still can, or if you stay do not buy a house, all you will do is lock your life up, it's not worth it trust me, if I had my time again I'd be out of here at the end of the eighties, and I think it's harder to get on now than it was back then in relative costs.

  2. #2
    Regular Member glenboy's Avatar
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    The cost of living eh VV,thats why i rent my place through the Housing Association,can't go wrong..........

  3. #3
    Regular Member wardy's Avatar
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    difference is after 25 years (for most morgages) you'll own your property. If you rent you'll always be paying, and while mortgages go up & down with interest rates, generally the repayments remain fairly similar over the life of the loan. If you rent it will creep up year after year.

    Renting is throwing you money away IMHO, although I know some can't get on the property ladder, which sucks.

  4. #4
    Regular Member Rob_the_Scot's Avatar
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    See what VV is getting at, though after about year 15, you really start to pay off the capital and less of your payments are interest. Still a long wait though

  5. #5
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    You need to pay more than they ask, a bit like credit card debt. Monthly mortgage payments barely touch the capital balance in the early years. If you want to clear a mortgage (and I speak from experience !) you need to round up your payment to the nearest £100 which most schemes allow. You also need to make capital repayments in multiples of £1000 whenever you can afford to - but continue to repay the same monthly figure so more of your payment goes against the balance.

    The word Mortgage comes from the french Mort = Death, Gage = Chain. A loan that was chained to you till death. Early French home loans had the debt passed down the generations !!

    Look at it this way, your loan value is eroded by inflation every year. Although interest rates will fluctuate the basic sum borrowed slowly diminishes from repayments and is reduced in real terms by around 30% every ten years. IE your sallary and other costs rise by an Av. of something like 2.5 % a year, compounded adds up to around 30 % every ten years.

    If you rent payments go up in line with inflation and you go on paying for your lifetime. Buying at least gives you a chance at outright ownership and with property values appreciating at above inflation levels consistantly for the last 20 years you will have some equity in your property (value above the amount owed) if you do decide to emmigrate.

    Myself and wife made sacrifices in our early years to pay off some capital on the mortgage, I was lucky at work and got some substantial bonuses, but many others did and wasted them. We cleared our loan before I hit 40 - I sometimes think its a waste not to be buying a place and am seriously considering buying a second place so as to benefit from property values over the long term.

    If you can afford to get on the housing ladder I would say go for it, the longer you wait the harder it will become. Im not dead well off BTW but have managed money well !

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    Regular Member Meriva OPC's Avatar
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    VV

    I've decided to exactly that - leave the country. I'm going to settle in Germany, where the houses we are looking at are 110000 Euros, about 88000 GBP. This is a lovely 3 bedroomed large bungalow in a large garden. As I enter the last few years in the Army I've decided to train as an english teacher working abroad. The money isn't brilliant but with a good pension and low mortgage payments (less than £500) I should be alright.

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    Regular Member MalcGSI's Avatar
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    Make sure you get a mortgage where the interest is calculated daily and not annually then any over payments you make have an immediate effect on reducing the amount of interest you pay.

    It is still better to buy than rent and always will be, we never sold a house preferring instead to keep the old property and rent it out. Last year we got rid of our rental properties (3 of them), this is enabling us to finance our next property without the need for a mortgage. Yes it was a struggle early on but after a while the rent received covers the mortgage payments and you benefit from the capital growth of the property.

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    Ex Vec-C Admin ed taylor's Avatar
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    I first had an endowment mortgage, then I changed it to a repayment one where I could pay off more if I wanted to, so I upped the payments and when I had some spare money I put that on the mortgage too, now I am fortunate not to have a mortgage as I managed to pay it off about ten years early. So now I am looking forward to when the endowment matures so I get the money not the building society.

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