Mortgages

Wile E. Coyote · 09-05-2012 2:17pm

c_man wrote: »

People with mortgages should be forced to wear a big 'M' on their person so that we may all deride them for being such fools. We can attach the Stone of Shame to special cases. "Rent is dead money? Well this is dead weight!"

You should really try look at the bigger picture rather than whats happened over the past couple of years. If people didn't buy houses what would you rent? If the local councils were forced to build houses to provide rental accommodation for everyone in the state how much tax would have to pay each week to keep them habitable? Where are all the people currently renting going to live when they reach retirement age and only have the state pension to live off?

Stiffler2 · 09-05-2012 2:17pm

Monty Burnz wrote: »

MORTGAGE INTEREST IS ALSO DEAD MONEY.

I said it in italicised caps.

Well - let's put it this way.
My parents bought their house for 25k, it's worth roughly 400k now and they own it.

Once I'm finished paying off my house in 30 years I paid let's say 350k for the house. In 30 yrs it'll proabably be worth 3 million if inflation is anything to go by from back when my parents bought to when I bought.

So I'll own a house worth 3 million, I'll probably lease the bathroom and 1 room for a cool 100k a month in 30 years while you'll be out working at 80 to pay your rent.

do you see ?

foxyboxer · 09-05-2012 2:19pm

I always like to have a mental escape plan, a mortgage is like a financial mind job (constantly at the whims of varying interest rates, any shred of bad news at work "I'm getting laid off!!!! I'll default!!!!" etc etc)

If I were to lose my job, get defrauded out of savings, basically left with nothing.

I'd simply stay in a hostel at €12 a night. €84 a week. To start from scratch again. Worst case scenario.

foxyboxer · 09-05-2012 2:23pm

Stiffler2 wrote: »

Well - let's put it this way.
My parents bought their house for 25k, it's worth roughly 400k now and they own it.

Once I'm finished paying off my house in 30 years I paid let's say 350k for the house. In 30 yrs it'll proabably be worth 3 million if inflation is anything to go by from back when my parents bought to when I bought.

So I'll own a house worth 3 million, I'll probably lease the bathroom and 1 room for a cool 100k a month in 30 years while you'll be out working at 80 to pay your rent.

do you see ?

Did your parents have such remarkable foresight when they got their mortgage? What if we experience a decade or two of deflation?

Past performance is not an indication of future gains and all that jazz.

golden lane · 09-05-2012 2:25pm

when my grandfather died...my uncle bought my grandfathers house.....i think i remember 600 pounds being mentioned.......the house is on lismore road in kimmage.....

my auntie bought a house in kilmainham at about the same time....don't know how much..

how much are those houses worth today.....?????

Wile E. Coyote · 09-05-2012 2:28pm

foxyboxer wrote: »

If I were to lose my job, get defrauded out of savings, basically left with nothing.

You'd still have a roof over your head if you had a mortgage and could negotiate with the bank till you were back on your feet. You could even rent out a room tax free to give you an extra income.

Monty Burnz · 09-05-2012 2:30pm

golden lane wrote: »

when my grandfather died...my uncle bought my grandfathers house.....i think i remember 600 pounds being mentioned.......the house is on lismore road in kimmage.....

my auntie bought a house in kilmainham at about the same time....don't know how much..

how much are those houses worth today.....?????

Are we forgetting about inflation?

foxyboxer · 09-05-2012 2:31pm

Wile E. Coyote wrote: »

You'd still have a roof over your head if you had a mortgage and could negotiate with the bank till you were back on your feet. You could even rent out a room tax free to give you an extra income.

But in all fairness, how likely is that though?

Wile E. Coyote · 09-05-2012 2:39pm

foxyboxer wrote: »

But in all fairness, how likely is that though?

Very likely actually. It can be done and is done every day of the week (I used to deal with mortgage arrears for a bank). No bank wants to take your home from you. They will work with you for as long as you need as long as you don't take the p*ss.

dearg lady · 09-05-2012 2:44pm

foxyboxer wrote: »

Ah now there are tenancy laws after all.

And if you have a mortgage, you don't own the house and it's not an asset. Anything that takes money out of your pocket is not an asset.

It is an asset for the bank and it's market value is the collateral for them in giving you the money in the first place. You own it when you get the deeds.

You default? They take the house.
You die? They cash in the life assurance they made sure you took out.

I don't recall giving life assurance details when renting?

AFAIK a tenancy can be terminated if the landlord wants to move back in, so maybe same applies for a child of landlord moving in?

When you have a property with a mortgage on it, you have both an asset and a liability. But I think the poster was referring to being able to decorate/do up the property, which I would agree is the annoying thing about renting.

For me, the main positive to renting is the freedom and flexibility. you simply do not have the same flexibility with an owned property. It can be a real pain to have to rent out a property, and there could be a tax liability too.

Agent J · 09-05-2012 2:45pm

Stiffler2 wrote: »

Well - let's put it this way.
My parents bought their house for 25k, it's worth roughly 400k now and they own it.

Once I'm finished paying off my house in 30 years I paid let's say 350k for the house. In 30 yrs it'll proabably be worth 3 million if inflation is anything to go by from back when my parents bought to when I bought.

So I'll own a house worth 3 million, I'll probably lease the bathroom and 1 room for a cool 100k a month in 30 years while you'll be out working at 80 to pay your rent.

do you see ?

Jesus H Christ.

Have you actually been under a rock for the last 5 years?

Go take a look at Japan for a comparison to Ireland. It's 20 years since their bust and they still havent recovered to boom levels.

Even the most optomistic projections from the Blackrock group last year( Off to google with you) have Irish Propery prices returning to relative 2006 values sometime about 2035/40

If you won't listen to sense, go nuts.

Why don't you use your parents place as security to get mortagages on lots of other properties. Sure you can pay them back with the rental income.
If property is such a safe bet what could possibly go wrong?

<Anyone else - Mortgages have their place but this line of thinking needs to be stamped on>

Agent J · 09-05-2012 2:46pm

dearg lady wrote: »

AFAIK a tenancy can be terminated if the landlord wants to move back in, so maybe same applies for a child of landlord moving in?

.

Common misconception. If you have a fixed term lease this must be addressed first before the part 4 rules can kick in. The fixed term is on top of the part 4 rules. It gives you more protection not less.

dearg lady · 09-05-2012 2:47pm

Agent J wrote: »

Common misconception. If you have a fixed term lease this must be addressed first before the part 4 rules can kick in. The fixed term is on top of the part 4 rules. It gives you more protection not less.

Apologies, I thought it still applied, my bad!

OldNotWIse · 09-05-2012 2:50pm

Stiffler2 wrote: »

Well - let's put it this way.
My parents bought their house for 25k, it's worth roughly 400k now and they own it.

Once I'm finished paying off my house in 30 years I paid let's say 350k for the house. In 30 yrs it'll proabably be worth 3 million if inflation is anything to go by from back when my parents bought to when I bought.

So I'll own a house worth 3 million, I'll probably lease the bathroom and 1 room for a cool 100k a month in 30 years while you'll be out working at 80 to pay your rent.

do you see ?

ROFL

Monty Burnz · 09-05-2012 2:51pm

Agent J wrote: »

Jesus H Christ.

Have you actually been under a rock for the last 5 years?

Go take a look at Japan for a comparison to Ireland. It's 20 years since their bust and they still havent recovered to boom levels.

Point of fact, I don't know if their prices have even properly stopped falling yet...

CruelCoin · 09-05-2012 2:52pm

Sappa wrote: »

After all the mess and continuing chaos around mortgages in Ireland,what are peoples genuine opinions of them.
I continually come across friends who are either snookered by a huge mortgage,a couple of them have just up sticks and legged it and others are just about managing.
I'm more of the opinion that I would rather rent than be slaved by a mortgage or save enough over time where I can buy outright or move to a cheaper country.
But I won't be getting a mortgage

Bit much calling it slavery.

House buyers go looking for a loan, the bank accepts their request and offers them clear terms and conditions.

The house-buyer is a bit of a prat if he/she takes out a mortgage at the very edge of his/her affordability in the belief that good times will roll on forever.

Since when did "caveat emptor" become taboo?

golden lane · 09-05-2012 2:53pm

Monty Burnz wrote: »

Are we forgetting about inflation?

not at all.......i would like to know..the rough price.....as that is the money their children can use to buy a house today........or save if they live in they house....

i live in the uk...had my own house, and allowing for inflation...when i sold the house...i made 190.000 pound profit.....

of course that does not apply to all areas...............

Stiffler2 · 09-05-2012 2:56pm

Agent J wrote: »

Jesus H Christ.

Have you actually been under a rock for the last 5 years?

Go take a look at Japan for a comparison to Ireland. It's 20 years since their bust and they still havent recovered to boom levels.

Even the most optomistic projections from the Blackrock group last year( Off to google with you) have Irish Propery prices returning to relative 2006 values sometime about 2035/40

If you won't listen to sense, go nuts.

Why don't you use your parents place as security to get mortagages on lots of other properties. Sure you can pay them back with the rental income.
If property is such a safe bet what could possibly go wrong?

<Anyone else - Mortgages have their place but this line of thinking needs to be stamped on>

Listen - when my old man was 8 he said he could do a weekly shop for the family of 10 on 5 cents or some old bollox like that.

It now costs €200+ for the full shop, everything always goes up in price over the decades as population sky rockets and land / property is harder to find.

I know I won't make any monies in the short term or quick gains but looking at it from the old man perspective where you could get more for less when you're young and I will be rolling in it when I'm 60.

that's just how it is my good man.

Monty Burnz · 09-05-2012 2:58pm

Stiffler2 wrote: »

Well - let's put it this way.
My parents bought their house for 25k, it's worth roughly 400k now and they own it.

Once I'm finished paying off my house in 30 years I paid let's say 350k for the house. In 30 yrs it'll proabably be worth 3 million if inflation is anything to go by from back when my parents bought to when I bought.

So I'll own a house worth 3 million, I'll probably lease the bathroom and 1 room for a cool 100k a month in 30 years while you'll be out working at 80 to pay your rent.

do you see ?

Hilarious lack of understanding of economics here.

Pop quiz - do you know what the inflation rate was between the 60s and the 90s? Do you know what inflation is today, and is projected to be in the coming years?

Or perhaps we need to go back a step: do you know what inflation is?

http://www.global-rates.com/images/charts/gr-inflatie-chart-14-2046.jpg

Oh yeah, I forgot: you are a troll. Bravo.

OldNotWIse · 09-05-2012 3:00pm

Stiffler2 wrote: »

Listen - when my old man was 8 he said he could do a weekly shop for the family of 10 on 5 cents or some old bollox like that.

It now costs €200+ for the full shop, everything always goes up in price over the decades as population sky rockets and land / property is harder to find.

I know I won't make any monies in the short term or quick gains but looking at it from the old man perspective where you could get more for less when you're young and I will be rolling in it when I'm 60.

that's just how it is my good man.

In Lidl and Aldi you still can. You should shop there, then your house will be worth ten million in thirty years

Agent J · 09-05-2012 3:07pm

Stiffler2 wrote: »

Listen - when my old man was 8 he said he could do a weekly shop for the family of 10 on 5 cents or some old bollox like that.

It now costs €200+ for the full shop, everything always goes up in price over the decades as population sky rockets and land / property is harder to find.

I know I won't make any monies in the short term or quick gains but looking at it from the old man perspective where you could get more for less when you're young and I will be rolling in it when I'm 60.

that's just how it is my good man.

Seriously, go leverage your property and start amassing your property empire now young man. You need to get on the property ladder now or it'll get to expensive. Money has never been cheaper! It's the perfect time to buy!! They arent making any more land! Rent is dead money!

You can't lose! Property! Inflation! Money!

Monty Burnz · 09-05-2012 3:10pm

golden lane wrote: »

not at all.......i would like to know..the rough price.....as that is the money their children can use to buy a house today........or save if they live in they house....

i live in the uk...had my own house, and allowing for inflation...when i sold the house...i made 190.000 pound profit.....

of course that does not apply to all areas...............

The UK property bubble hasn't burst yet. But seriously, the level of understanding the basic economics of property prices (which is essentially the economics of credit) is appalling in this country, even after all we have been through. It's not rocket science, and people spend more time researching hair products or their new camera than they do this stuff. Amazing really.

Stiffler2 · 09-05-2012 3:11pm

Meh - I did not buy my property for a quick flip or buck.

I bought it to live in for the next few decades so over those decades I don't care how much it is worth.

I only care about how much it will be worth in say 30 yrs and it'll be worth more than what I paid for it, simple as that really....

If I default in the next few years then I'll simply moon the bank and you can all pay for it while I emmigrate to a better existence...

golden lane · 09-05-2012 3:20pm

Monty Burnz wrote: »

The UK property bubble hasn't burst yet. But seriously, the level of understanding the basic economics of property prices (which is essentially the economics of credit) is appalling in this country, even after all we have been through. It's not rocket science, and people spend more time researching hair products or their new camera than they do this stuff. Amazing really.

there are thousands of homeowners in the uk..in negative equity....my own daughter is......but it is irrevelent as she has no intention of moving......and with the large deposit i gave her, she can manage the mortgage quite easily.......

it is a shame, that so many people in ireland, and lots over here to.....got caught up in the mad rush to buy property......they would not listen to sense.......but that is people.....what can you do......

it will happen again in the next boom, and so and on, it goes........

the sad thing is.....that all this was predicted years ago, and was common knowledge to people like me, who watch telly, and listen to the radio...

Agent J · 09-05-2012 3:22pm

Stiffler2 wrote: »

Meh - I did not buy my property for a quick flip or buck.

I bought it to live in for the next few decades so over those decades I don't care how much it is worth.

I only care about how much it will be worth in say 30 yrs and it'll be worth more than what I paid for it, simple as that really....

If I default in the next few years then I'll simply moon the bank and you can all pay for it while I emmigrate to a better existence...

Why would someone as smart as you default?

But we need you. We need your staggering economic genius. You can't leave us!

Property! Inflation! Money!

Sappa · 09-05-2012 3:32pm

Stiffler2 wrote: »

Well - let's put it this way.
My parents bought their house for 25k, it's worth roughly 400k now and they own it.

Once I'm finished paying off my house in 30 years I paid let's say 350k for the house. In 30 yrs it'll proabably be worth 3 million if inflation is anything to go by from back when my parents bought to when I bought.

So I'll own a house worth 3 million, I'll probably lease the bathroom and 1 room for a cool 100k a month in 30 years while you'll be out working at 80 to pay your rent.

do you see ?

Come on your 14 years old right!

saa · 09-05-2012 3:37pm

I am almost sure I will go through patches throughout my career where I will not be making enough money as self employed person so what's the point of me getting a mortgage when I know I will have a patchy financial future. But I also worry that when I retire things will be ..interesting, it would be nice to have somewhere to live where I only had to worry about paying the heating.

Gurgle · 09-05-2012 3:41pm

Agent J wrote: »

Seriously, go leverage your property and start amassing your property empire now....

You can't lose! Property! Inflation! Money!

Seriously, can you not understand the difference between speculation, investment and residential purchase?

Residential purchase is the long game, you're committing to a monthly payment for 25 to 40 years and after that you get to live there without paying anything to anybody.

Investment is medium term, you're planning to hold the property and take income from it. The income may not even cover the monthly mortgage, it doesn't have to. Once the monthly net rental income covers the interest charged for that month, long term inflation takes care of the rest and you're in profit. You cash in when conditions are at their best.

And then you've got speculation. Buy it without considering whether you can make the payments with or without rental, don't even bother checking what it would rent for. Just leave it empty and wait for it to appreciate over a couple of years, sell it. These are the people who got burned, as they had no contingency plan. Amateurs.

Fighting Irish · 09-05-2012 3:43pm

ted1 wrote: »

A house doesn't deprecate like a car does. (with the exception if those bought during the boom)

Once you pay off the mortgage in x years you li e mortgawge and rent free. If your paying rent how on hell will you pay rent when you stop working.

Also i'm currently paying 1150 a month rent. I just bought a house in a slightly better estate and my mortgage will be 750. A no brainer if you ask me.

lol

Agent J · 09-05-2012 5:06pm

Gurgle wrote: »

Seriously, can you not understand the difference between speculation, investment and residential purchase?

Residential purchase is the long game, you're committing to a monthly payment for 25 to 40 years and after that you get to live there without paying anything to anybody.

Investment is medium term, you're planning to hold the property and take income from it. The income may not even cover the monthly mortgage, it doesn't have to. Once the monthly net rental income covers the interest charged for that month, long term inflation takes care of the rest and you're in profit. You cash in when conditions are at their best.

And then you've got speculation. Buy it without considering whether you can make the payments with or without rental, don't even bother checking what it would rent for. Just leave it empty and wait for it to appreciate over a couple of years, sell it. These are the people who got burned, as they had no contingency plan. Amateurs.

Oh i wasn't being overly serious. I was hamming it up for the troll.

And i think you are being overly simplistc in your analysis. Property is not and never has been a one way bet. It may have looked like at times but eventually the bubble bursts.

Apply your conditions of investment to the Japanese market over the last 20 years. Then go take a look at the Blackrock group figures for the Irish Property market for the next 20/30 years. Adopting an "interest only" stratgey will leave you massively exposed when rates increase. And thats not even going into the overal economic risks.

It was a simplistic view of property(Property!,Inflation!, Money!) and the credit behind it which got people into trouble not just pure speculation(As defined by you).

None of this is to say there aren't right conditions for mortgages,investments etc but based off the last 10/15 years of Irish history, most people don't seem to know them. And still don't.

Mortgages

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