Mortage diposit, how much?

[Zen Dog]

I have a couple of friends looking at moving/buying a house, and another friend who works dealing with mortgages. Normally when it comes up she starts talking through all the different options, large vs small deposit etc. etc. When it came up a few weeks ago her advice was simply - "Do not buy a house. For a year or two at least."
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[arry]

[Ste]

[SpiritMr89]

[colin1]

[Zen Dog]

[A100man]

[Fat Angry Scotsman]

[Nobby the Bastard]

[Rob Fzs]

[Fat Angry Scotsman]

[Nobby the Bastard]

Despite the 2009 drop, I sold.the house I bought in 2003 for almost double what I paid for it in 2015.

Provided you can survive any recession and interest rate increases, any period of negative equity will be short lived

Yes, ideally you want to buy when the market is depressed but its not that vital.
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trevor saxe-coburg-gotha:"Remember this simple rule - scooters are for men who like to feel the breeze on their huge, flapping cunt lips."
Sprint ST 1050

[arry]

If you're looking at a 20+ year 'investment' then even the biggest housing crashes of the past 50 years aren't big.

I'd agree with Nobby on this. There's no bad time to get on the ladder - there's alright times and slightly better times.

Ten grand in the long skew, on a hundred grand gaff - even with a couple of points of cheeky extra interest rate - not worth holding off for.

As long as you can afford it. Of course.

[Nobby the Bastard]

The horrific one was the late 80s early 90s one where the depression in the market was largely cause by the fucking ridiculous interest rates inflicted on borrowers I order to keep inflation in check. The interest rates meant that when people.reached the point that they couldn't afford the mortgage they were in negative equity.

The lucky ones were the ones with endowment mortgages because they stopped paying that bit and just paid the interest.
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trevor saxe-coburg-gotha:"Remember this simple rule - scooters are for men who like to feel the breeze on their huge, flapping cunt lips."
Sprint ST 1050

[Nobby the Bastard]

And 2009 was simply caused by market insecurity resulting in sub prime customers not being able to get a mortgage at an 8nterest rate they could afford. That caused the banks to collapse.
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trevor saxe-coburg-gotha:"Remember this simple rule - scooters are for men who like to feel the breeze on their huge, flapping cunt lips."
Sprint ST 1050

[Islander]

[Nobby the Bastard]

The number of people who were just handing their keys back to the banks at the time was rediculous, despite the fact it didn't help them.

It was easier for them in the long term to recognise that they were going to be bankrupted by giving the keys back than hoping till the bitter end.

Yet another thing on top of selling off all the social housing and making sure that there was a big pool of unemployed to keep wages down to thank Thatcher for.

On the plus side she's dead.
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trevor saxe-coburg-gotha:"Remember this simple rule - scooters are for men who like to feel the breeze on their huge, flapping cunt lips."
Sprint ST 1050

[SpiritMr89]

[Nobby the Bastard]

Politics has everything to do with the housing market. The policies of the current incumbents affect the market very directly and very quickly, and more so than the majority of things you normally buy and due to the length of the commitment you can do very little to mitigate that.
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trevor saxe-coburg-gotha:"Remember this simple rule - scooters are for men who like to feel the breeze on their huge, flapping cunt lips."
Sprint ST 1050

[A100man]

IIRC the lengthy 1989-1995 'crash' was it part at least down to reduced
MIRAS (Mortgage Income Tax Relief At Source - remember that!!) on couples buying houses.

It was announced in late 80s and panic buying ensued forcing up prices at an absurd rate. The bubble burst around 89 (in my area) and there was then a lengthy period of correction..

As an example I bought my first property in early 1988 a poor condition 2-up 2 down in East Northants for 30K (it was probably worth 20k). Similar houses up my street rocketed up to almost 50K within a year. Then came tumbling down - after 2 years there I figured I'd sell and cash in a bit.
It was first advertised at 45k, then 40k, then 35k - I got a nibble at 35 (I think) but it fell through and after 2 years on the market (4 years in the house) I sold for 30k - same as I paid, and I was one of the lucky ones inspite of paying 10% + interest rates during that time...

..just sayin'
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[Keithy]

[Robby]

People have been "predicting" the next house price crash since a week after the last one. It keeps on not happening. That doesn't mean it isn't going to happen, but a really serious crash is unlikely. A moderate decrease is possible, followed by slower price growth afterwards.

Personally I would like to see that, even though it wouldn't benefit me. Prices are currently insane.

So I would advise against trying to time the market, or waiting until a big crash to buy. I would also advise against getting yourself so heavily leveraged that a moderate drop in prices or increase in mortgage rates would ruin you.

It's good be in a position where, if a really big crash does happen, you can hold on long enough for the govt support measures to make it to you.

[Nobby the Bastard]

If you want to buy a house to be a home and long term, you won't really lose out despite the vagarities of the market.


If you want to use one as an investment, don't do it unless you can afford to take a big loss.
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trevor saxe-coburg-gotha:"Remember this simple rule - scooters are for men who like to feel the breeze on their huge, flapping cunt lips."
Sprint ST 1050

[SpiritMr89]

Will be our family home.

Wife wants one with me. So will be 3kids and us.
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Hello

[ThunderGuts]

Loads of good advice in this thread already. My take on it is the bigger your deposit, the better LTV rate you'll get and the more competitive the interest rate (and you'll also enjoy lower monthly repayments, like for like, as your loan is smaller). This also then leaves wiggle room should there be a minor drop in house prices in that first quarter or so of your mortgage where your capital level isn't eroding so quickly, making you less vulnerable to equity drops; let's say for arguments sake in 2 years time you're ready to buy and mortgage deals are back on the table. Let's say the lowest deposit is 10% for a fixed rate deal; some buyers will jump on that with just the 10%. But if house prices drop by over 10%, you're going to be brushing negative equity, but in reality even if house prices drop by 5% you're not going to be able to get any kind of deal and you'll be dumped onto the lender's standard variable rate and will hit higher monthly repayments. If you've sunk 20% into your deposit, even a 10% house price drop (which I think is unlikely) will still leave you with sufficient equity to get some sort of deal.
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TG.