overandunder2012 Posted June 8, 2013 Report Share Posted June 8, 2013 (edited) 'interest only mortgage' i am no investor, but even i can see that this advice is plainly wrong. Who wants to pay forever and end up with nothing, oh please dont tell me you know the house price will quadruple over the years of paying the never ending loan. iv heard it said that if you got a few on the go you want the income and equity you dont need them to be bought outright at the end buy to lets are often not treated like you would a home where you wish to own it outright all that matters is the costs are less than the profits Edited June 8, 2013 by overandunder2012 Quote Link to comment Share on other sites More sharing options...
hushpower Posted June 9, 2013 Author Report Share Posted June 9, 2013 Thanks for your views,most interesting. Quote Link to comment Share on other sites More sharing options...
Rupert Posted June 9, 2013 Report Share Posted June 9, 2013 Thanks for your views,most interesting. Massive amounts of mortgage is always a contentious subject. From your location,good returns and cheap housing is not very far from you. Quote Link to comment Share on other sites More sharing options...
al4x Posted June 9, 2013 Report Share Posted June 9, 2013 Is it still that easy to get interest only mortgages with only 15% down? Obviously a lot of people went bankrupt in the last few years trying this approach but everything I've experienced has suggested they won't lend at these levels, and as soon as you try to get near the rates charged go through the roof. Quote Link to comment Share on other sites More sharing options...
LondonLuke Posted June 9, 2013 Report Share Posted June 9, 2013 Is it still that easy to get interest only mortgages with only 15% down? Obviously a lot of people went bankrupt in the last few years trying this approach but everything I've experienced has suggested they won't lend at these levels, and as soon as you try to get near the rates charged go through the roof. Impossible. Need at least 25% down. Quote Link to comment Share on other sites More sharing options...
aris Posted June 9, 2013 Report Share Posted June 9, 2013 in this day and age i would keep the money safe and see what happens for a bit, but im an idiot who doesnt know anything about the housing market. Have you thought about a money lending business? Money isn't safe any more. Just look at what happened in Cyprus. Northern Rock wasn't that long go either. Quote Link to comment Share on other sites More sharing options...
Mungler Posted June 9, 2013 Report Share Posted June 9, 2013 (edited) Ok, I have a client who is a mortgage broker and he's a good mortgage broker. There is nothing he doesn't know about mortgages or lending and borrowing. Anyways, the best B2L deal he got me was 25% down with the Birmingham Midshires, 5 years fixed interest (can't remember what it was but when I looked at the time it was super low by comparison) and it's interest only. On the subject of interest only: 1. you depreciate the value of money over time - when you talk about £100,000 now and you talk about £100,000 in 10, 15 or 20 years time it will not be measuring like with like. Ask your parents how much they paid for their houses, how much they borrowed and ask them whether they were pooping their pants at the time and how they feel about it now. 2. As has been said, you offset interest payments and the cost of borrowing against rental income so it's tax neutral. 3. Paying down the capital value of an appreciating asset is a nightmare - don't forget, there's capital gains to factor into the ultimate sale of property. On the subject of the gaff: 1. buy near a school, in walking distance of a station, with car parking and don't buy what you want. Buy what rents and what will sell quickly if you have to dump up <end of> 2. buy where you can get to the place within 20 minutes (I have clients who live in the South East and thought it would be good to buy up cheap streets in the North for rental - big mistake). 3. NO FLATS (if you can be fussy, never ever ever buy a flat). I can't emphasise this enough - there's higher legal costs, service charges, always arguments over parking, noise, access, repairs, maintenance and there's a raft of stitch up freeholder companies. Seriously, never ever ever (unless maybe it's a maisonette or there's a route to buying, owning and controlling the freehold) 4. Buy sub £195k and you'll never do your shirt and pants. Buy at the right (low) price and you will always be able to throw it into an auction and get your money back and come out level. I don't 'do' significant risk. I'm quite lucky as we see all sorts of interesting things and opportunities at work (and legitimately so I might add). Edited June 9, 2013 by Mungler Quote Link to comment Share on other sites More sharing options...
aris Posted June 9, 2013 Report Share Posted June 9, 2013 Good advice there Mungler. Quote Link to comment Share on other sites More sharing options...
hushpower Posted June 9, 2013 Author Report Share Posted June 9, 2013 Massive amounts of mortgage is always a contentious subject. From your location,good returns and cheap housing is not very far from you. cheers, am in glossop, do you mean manchester area for good returns and cheap housing? Quote Link to comment Share on other sites More sharing options...
Rupert Posted June 9, 2013 Report Share Posted June 9, 2013 I was thinking south Barnsley. Eg from experience £65k to buy and refurb a 3 bed terrace rent for £495 to working family. We target what I term serial renters,Families with good disposable income prob in excess of 30k but due to lifestyle pub,fags,spoiling kids etc will never amass the deposit,even tho the could easily support the mortgage. Quote Link to comment Share on other sites More sharing options...
hushpower Posted June 9, 2013 Author Report Share Posted June 9, 2013 Thanks rupert ,you open my eyes,much appreciated Quote Link to comment Share on other sites More sharing options...
overandunder2012 Posted June 9, 2013 Report Share Posted June 9, 2013 as mungler says dont do flats Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.