People who never buy?

nc19

syklops wrote: »

Thats the second time you have used the acronym iirc(if I remember correctly). Can we get your sister on here to confirm details?

Ill ask her >thumbs up<


Does it really matter if the house was 5k more or less than what i remember?

My point was that if you are working part time in a corner shop and have little or no savings or future prospects then you have no business looking for a mortgage but what i believe the OP was asking was if you had the where with all to get and maintain a mortgage but you choose to rent then why?

I was just using my sister as an example in order to emphasise the above belief.

dar100

nc19 wrote: »

Ill ask her >thumbs up<


Does it really matter if the house was 5k more or less than what i remember?

My point was that if you are working part time in a corner shop and have little or no savings or future prospects then you have no business looking for a mortgage but what i believe the OP was asking was if you had the where with all to get and maintain a mortgage but you choose to rent then why?

I was just using my sister as an example in order to emphasise the above belief.

And I believe your sister had no business getting a mortgage on such a low wage with no deposit, works both ways

beauf

I'd say some people like the idea of not being tied to a location/property even if they never actually take advantage of it.

They've certainly avoided a lot of stress about negative equity and pyrite or not being in the catchment for schools, or near family, maintenance, or near a job. They have the freedom to move as best suits their life at the time. That's a lot of flexibility.

Grandpa Hassan

beauf wrote: »

I'd say some people like the idea of not being tied to a location/property even if they never actually take advantage of it.

They've certainly avoided a lot of stress about negative equity and pyrite or not being in the catchment for schools, or near family, maintenance, or near a job. They have the freedom to move as best suits their life at the time. That's a lot of flexibility.

I don't think anybody denies that they are major benefits of renting. But the OPs question was a more specific one: what do those people to when they are no longer earning and have potentially 20 or more years of renting ahead of them....

beauf

Oh I know. I thought we move alone a little.

As I said earlier...

beauf wrote: »

I know some people who plan to retire to other countries because of the cost of living is cheaper and the healthcare is better. Also Dublin and the bigger cities rent is climbing. But its cheaper outside of that. If you are retired you have cheaper transport options and not stuck for commuting etc. You also see people downsizing and relocating to cheaper places. ...

It give you options in retirement.

Of course people might end up with property and not have saved a pension, or have any other means of income. Which is a whole different issue. But something to consider when stretching to afford a property.

http://brianmlucey.wordpress.com/2012/07/20/pension-and-crises/
http://www.irishtimes.com/business/sectors/financial-services/government-must-act-to-prevent-a-serious-pension-crisis-1.1641770

MouseTail

Those with a large enough pension pot could continue to rent, I would imagine that is a small enough cohort though. Historically they have moved to Social Housing, or already had social housing. Although with our demographic bubble, those working now would be foolish to depend on the Welfare State to house them in old age.

Jellybaby1

beauf wrote: »

Of course people might end up with property and not have saved a pension, or have any other means of income. Which is a whole different issue.

Hubby's pension was going to be very good, before the recent recession that is, every year we get a statement of what it is worth, and every year it goes down by thousands, so what used to be sensible is now being eaten up by the powers that be and we will get squat.

Dredd_J

Jellybaby1 wrote: »

Hubby's pension was going to be very good, before the recent recession that is, every year we get a statement of what it is worth, and every year it goes down by thousands, so what used to be sensible is now being eaten up by the powers that be and we will get squat.

Are you sure its been going down the last 5 years or so.
Mine has been increasing by more than my salary is even before i put in contributions for my salary. It has mad back multiples of the losses that happened in 2007 and 2008.
Its actually going UP by thousands per month.
There must be something wrong if your pension value has been going down.

beauf

I'd say a lot of peoples plans have changed considerably over the last 5yrs.

MadDog76

nc19 wrote: »

My sister, single, 30s, with app. 27k pa wage and no deposit got one for 195,000iirc with repayments of 550pm.

If you cant manage the above you shouldnt be trying for a mortgage so therefore not applicable to this discussion.

the op meant, afaics, that if you could afford a mortgage but choose to rent, why?

She wouldn't get that mortgage today .............

meeeeh

If you are well paid, have good pension and lifestyle or work that takes you around a lot there is no point buying. Or if you live in some very expensive city. And you would be ok when retiring. But in most instances the security of owning your own home wins out for me.

Mrs OBumble

meeeeh wrote: »

If you are well paid, have good pension and lifestyle or work that takes you around a lot there is no point buying. Or if you live in some very expensive city. And you would be ok when retiring. But in most instances the security of owning your own home wins out for me.

OP - this gets back to your original question. If you have planned properly for retirement, and invested in a a diversified range of options, then your income wont' be slashed when you retire, it will simply start coming from different places.

A pension scheme that offers a decent lump sum may give you the ability to buy in a cheaper-to-live in retirement location. Or you may want to continue renting - ideally from a landlord who is willing to give you security of tenure.

And as others have pointed out, if you are low paid and cannot afford to save a pension, that's where the social (really indigent) housing option comes in. In this case, I'd imagine that the sort of housing you will get from the council (or over voluntary housing group) is likely to be similar to what you could afford to rent during your working life.

Jellybaby1

Dredd_J wrote: »

Are you sure its been going down the last 5 years or so.
Mine has been increasing by more than my salary is even before i put in contributions for my salary. It has mad back multiples of the losses that happened in 2007 and 2008.
Its actually going UP by thousands per month.
There must be something wrong if your pension value has been going down.

Very sure!

the_syco

Jellybaby1 wrote: »

Hubby's pension was going to be very good, before the recent recession that is, every year we get a statement of what it is worth, and every year it goes down by thousands, so what used to be sensible is now being eaten up by the powers that be and we will get squat.

Get him to talk to whomever the pension is with, and find out the reason. Most people allow X percent of the pension to be used on stocks. In the boom years, this was good, but now, it may be very bad. Find out all the info, and bring the info to an independent pension advisor to check if it all adds up, or if your hubbie is paying for someone elses mistake!

And in your hubbies case, it is very bad.

The_Conductor

ted1 wrote: »

I was thinking the same, rent pays mortgages so should always be higher.

Contrary to what you believe- the linkage between the two is only a weak correlation. Its far from unusual (especially when prices get out of kilter with market fundamentals- as they now are)- for mortgages to be significantly higher than net rental income.

People who rent have the notion that the landlord is minted, and any rent is cash into their hands, and they are somehow awash in money. Very often- the opposite is far more accurate.

The_Conductor

Dredd_J wrote: »

Are you sure its been going down the last 5 years or so.
Mine has been increasing by more than my salary is even before i put in contributions for my salary. It has mad back multiples of the losses that happened in 2007 and 2008.
Its actually going UP by thousands per month.
There must be something wrong if your pension value has been going down.

I'd echo this.
My annual statement took a nosedive with the financial crisis- but has been climbing (not in a stellar manner, but climbing) ever since.

Note- I have already received a 6 month warning that last year was an aberration- and returns this year could well be less than a quarter what last years were.

People tend to become more risk adverse as they near retirement age- before eventually buying the equivalent of an annuity when they retire. Annuities used be largely based on sovereign bonds- nowadays its more likely to be forestry units or some such- as the net return on sovereign bonds is barely keeping pace with inflation.

As for salary rises- well done to anyone who has managed to get one. We read about them in the papers- but not so much as a sniff of them.

The_Conductor

Grandpa Hassan wrote: »

I don't think anybody denies that they are major benefits of renting. But the OPs question was a more specific one: what do those people to when they are no longer earning and have potentially 20 or more years of renting ahead of them....

Move somewhere like a small village in Portugal, and rent there instead? Living costs a quarter of what they are here- and if they have provided for their pension properly- they should have perhaps 50-60% of their pre-retirement income, which will go a far way elsewhere?

PLUG71

Renting is DEAD money!

Why pay off your landlords mortgage when you could be paying off your own?

The_Conductor

PLUG71 wrote: »

Renting is DEAD money!

Why pay off your landlords mortgage whwn you could be paying off your own?

Lots of people are renting for far less than the cost of their landlord's mortgage- and living in accommodation they'd not be able to afford to buy- thats why?

Its a lifestyle choice. I could just as easily ask you- why buy a two bed hovel in the arse-end of no-where, when you can rent, where you want to live, in a superior property- for less than it would cost you to own something you don't like, where you don't want to live..........?

IRLConor

ted1 wrote: »

I was thinking the same, rent pays mortgages so should always be higher.

In other countries there are larger stocks of older apartment buildings which, presumably, are not mortgaged.

If the landlord only needs to cover refurbishment/maintenance then rents can be lower for comparable profits.

Dredd_J

Jellybaby1 wrote: »

Very sure!

Definitely get an independent financial adviser to look at it.
Pension fund should have had massive growth in the last 5 years.

scrubber72

Married with one year old. 42 years old. Factory worker for 8 years. Safe job. Wife childminds. I am on 30k my wife doesn't make more than 10k. Savings around 25k. Only one bank (not our own) wanted to work"help" us and offered us 30k while we were looking for 100k. Of the last 3 houses we rented all were more expensive the repayments but these are by no means big houses approx rent cost 700 per month. We were offered 240k 7 years ago. Passed it up. That dropped to 170k 5 years ago when wife lost her job. Forward 2 more years and wife got a lost job in 12 months went down to 145k. Its all down to Net Disposable Income. Doesn't look good that we will ever get a house let alone our dream house. At least renting we can pick and choose where we live and when we leave. Plus any repairs ain't up to us for pay for.

Grandpa Hassan

The_Conductor wrote: »

Lots of people are renting for far less than the cost of their landlord's mortgage- and living in accommodation they'd not be able to afford to buy- thats why?

Its a lifestyle choice. I could just as easily ask you- why buy a two bed hovel in the arse-end of no-where, when you can rent, where you want to live, in a superior property- for less than it would cost you to own something you don't like, where you don't want to live..........?

The lifestyle choice only works out well in the long run, of course, if the renter has the discipline to also save. I know for a fact that a whole load of my friends who are in their late 30s, and who rent, do not have a pension nor any material savings.

A mortgage is kind of like an enforced investment plan.

RedPandaDan

PLUG71 wrote: »

Renting is DEAD money!

Why pay off your landlords mortgage when you could be paying off your own?

Couldn't that apply to basically anything?

lima

Grandpa Hassan wrote: »

The lifestyle choice only works out well in the long run, of course, if the renter has the discipline to also save. I know for a fact that a whole load of my friends who are in their late 30s, and who rent, do not have a pension nor any material savings.

A mortgage is kind of like an enforced investment plan.

In my example, I rent in a millionaires road in D6 where I would never be able to buy. I've been saving over 1k a month for years now, and I split the rent with my other half so it only costs me e600 per month.

To buy means renting money from the bank (about e800 per month + capital repayments), plus I'd have to move out to the suburbs, which I do not want to do for lifestyle reasons.

I have a pension too, so I guess in a way I'm a good example of a 'smart renter'. Yeah my cash savings gets destroyed through sh*te interest and DIRT, but I don't have to worry about it (well the part guaranteed anyway!)

(however in saying that I am actively looking to buy but it's currently madness in that area!)

Diarmuid

If you're in your 30's now, you won't have to worry about retiring. The pension time-bomb will have well and truly exploded by the time you're 65. I fully expect to be still working well into my 70's. There is no way my pension contributions I'm making is going to allow me live the life I want, ie not in poverty. Couple that with the inevitable dipping into private pensions that successive governments will do in the next 30 years, your retirement is going to be very short. Hopefully I'll still be healthy enough to work.

Gael23

Often wondered about this.
Its fine until your old and have stopped working and have finite financial resources. But you cant predict how long you will live for so what do you do once your savings have run out?

Tombo2001

Jellybaby1 wrote: »

I came across this by accident and was also interested in hearing replies. We are just three years away from retirement and the mortgage is already paid off. We still have to pay for maintenance etc. Renters can ask their landlord to pay for a broken window, or sagging gutters or a hole in the roof, but from what I have heard not all landlords take care of their properties. We are taking care of our property so we won't have huge bills in a few years time. Our kids are just working part time as that's all that they could get so if they aren't working when we retire at least they will have a roof over their heads too, they can't afford to have their own homes right now. My generation were brought up to believe that owning is better than renting and that renting is the same as flushing all that money down the toilet. You own nothing at the end of 20 or 30 years and leases are not always renewed. If someone can be assured these days of a steady job for the next 20-30 years then I would recommend getting a mortgage for a house, but who can guarantee that in the present economical climate?

When I think back to my grandmother at the beginning of the 20th century, who was left alone and took in laundry to keep herself and her children going and keep paying the rent on their tenement flat, I don't know how she did that when she got too old to work. The same question applies today.

Your generation was able to buy a decent four bedroom semi-d on a single teachers or Garda's salary. And yes, I know rates went up to 20%.

Villa05

Tombo2001 wrote: »

Your generation was able to buy a decent four bedroom semi-d on a single teachers or Garda's salary. And yes, I know rates went up to 20%.

That generations mortgage amounted to 1 weeks wages for 1 person over 20 years
It has doubled in time and number of week wages for this generation in effect 40k times the cost. The house of today is porrer quality and smaller with much smaller garden

Villa05

Tombo2001 wrote: »

Your generation was able to buy a decent four bedroom semi-d on a single teachers or Garda's salary. And yes, I know rates went up to 20%.

That generations mortgage amounted to 1 weeks wages for 1 person over 20 years
It has doubled in time and number of week wages for this generation in effect 40k times the cost. The house of today is porrer quality and smaller with much smaller garden