Rapitex:
Hello All… is this time actually the best period to go on mortgage?. I got 2 options from Barclays Bank so far 5.75 percent (fixed for 2 years) and 5. 00 percent fixed for 5 years with 10 percent deposit on a tier 2 visa with just 2 years residence in uk..is this a fair deal considering the market of today and future forecast

..

Ticha:


My personal rule of thumb is to use as little of my own cash as possible at the beginning, buy the biggest house I can afford within my parameters and then overpay. I see the overpayment as forced savings - one day, I shall be taking that equity out for something else even if na new kitchen

Ma, could you kindly expand on this a bit more?

My thinking had been that it would be best to buy a much less expensive house than one can afford and then overpay to pay off the mortgage in say 8 - 10 years.

How does that rationale compare with buying a more expensive one up front?

koonbey:


Ma, could you kindly expand on this a bit more?

My thinking had been that it would be best to buy a much less expensive house than one can afford and then overpay to pay off the mortgage in say 8 - 10 years.

How does that rationale compare with buying a more expensive one up front?

Because I have no desire to pay off any mortgages till I am at retirement. The easiest investment vehicle to recycle and maximise your funds into and out of is property. Having usable equity means you don't have to worry about getting a deposit for your next purchase as you can just re-mortgage and pull those funds out for a deposit, or a new kitchen, car, travel etc.

Historically, mortgages have the lowest interest rates of any borrowed funds (still is by a good margin in most cases) so people would often add borrowing onto the mortgage than borrow from elsewhere. A huge downside is that of course your monthly payments would increase as you'll be owing the bank more money but in our case, that's why it's rented so we're not adding any more personal money in.

Basically I buy properties that will go up in value so I can withdraw that equity tax-free by borrowing against the new value. However, the amount will be capped by either the property’s rental value (if taking out a new buy-to-let loan on your rental property) or your own income (if you’re borrowing against your main home)

Ticha:


Because I have no desire to pay off any mortgages till I am at retirement. The easiest investment vehicle to recycle and maximise your funds into and out of is property. Having usable equity means you don't have to worry about getting a deposit for your next purchase as you can just re-mortgage and pull those funds out for a deposit, or a new kitchen, car, travel etc.

Historically, mortgages have the lowest interest rates of any borrowed funds (still is by a good margin in most cases) so people would often add borrowing onto the mortgage than borrow from elsewhere. A huge downside is that of course your monthly payments would increase as you'll be owing the bank more money but in our case, that's why it's rented so we're not adding any more personal money in.

Basically I buy properties that will go up in value so I can withdraw that equity tax-free by borrowing against the new value. However, the amount will be capped by either the property’s rental value (if taking out a new buy-to-let loan on your rental property) or your own income (if you’re borrowing against your main home)

Similar to the BRRRR Strategy, not everyone has the heart for this. The last few pages of "The Psychology of Money" put it so beautifully, some people want to live in a paid-off house and that's fine. It may not be the wisest financial decision to sit on such capital but that peace of mind amongst many other benefits is just okay for their stress levels. I'm not one of those people though, we shall ride the debt till retirement hopefully.

Nigerians are debt-averse so most people won't want this. Again, that's also fine 🙂

Ticha:


Because I have no desire to pay off any mortgages till I am at retirement. The easiest investment vehicle to recycle and maximise your funds into and out of is property. Having usable equity means you don't have to worry about getting a deposit for your next purchase as you can just re-mortgage and pull those funds out for a deposit, or a new kitchen, car, travel etc.

Historically, mortgages have the lowest interest rates of any borrowed funds (still is by a good margin in most cases) so people would often add borrowing onto the mortgage than borrow from elsewhere. A huge downside is that of course your monthly payments would increase as you'll be owing the bank more money but in our case, that's why it's rented so we're not adding any more personal money in.

Basically I buy properties that will go up in value so I can withdraw that equity tax-free by borrowing against the new value. However, the amount will be capped by either the property’s rental value (if taking out a new buy-to-let loan on your rental property) or your own income (if you’re borrowing against your main home)

Thank you very much! 🙏🏿

[Crosspost] #35yrs mortgage

lightnlife:
A record one in five first-time buyers are signing up to mortgages of more than 35 years as interest rates soar.
But while spreading out the loans makes them more affordable in the short term, it means homeowners will accrue thousands of pounds more debt on the interest over the lifetime of the mortgage.

In many cases, they will still be paying off the deals well into their 70s.
https://www.dailymail.co.uk/news/article-12158369/Proportion-time-buyers-taking-lengthy-loans-doubles-just-two-years.html

Good afternoon Elders,

I need advise on certain decisions especially as regards the proposed 8years Skilled Worker Route to ILR. This proposal is currently causing riot in my head.
We planned buying a property in the next 4-5 months paying the 25% deposit. But the riot in my head is not letting us arrive at any conclusion.
We have options of moving to either Australia (But we Dey fear crawling things), Canada on Work Visa or Ireland but none of this can start fully until my wife finishes her study by first quarter next year.

By my tax calculations, in 5yrs we would have paid over £90k in tax excluding LGA aka council tax. Adding another 3years on top would increase this to over £140k while still at the mercy of employers because of COS.

We had planned that in 6years, my wife will go into another pathway in Nursing leaving Bedside but if this 8years happens that’s extra 3yrs on the edge.

1. Should we go ahead and buy property? Knowing that we may not stay here and people may not be many for renting the house.
Please we need honest advise on the property matter.
I know some of my rants here are unrelated but please I want to know what you gurus honestly think.

While we wait for the gurus, no one can say, for sure, what is the best line of action in this.

Are you on Tier-4 visa? I would say wait till you are on Tier-2...

If you are on Tier-2, I would say getting a property is a risky venture but it's usually a good one albeit. If circumstances change, you can always sell or rent out. The adjustment I would advise is to avoid 25% if it will tie down too much of your capital. Being on a visa and having all the probabilities would mean you might wanna have sufficient Emergency Funds.

So, yes, getting the property, but don't use your last card, keep aside some Emergency Funds, so in case plans change, you don't have to sell your house in a hurry or be stranded.

Remember, the alternative is paying your Landlord's Mortgage without building any equity for yourself.

Solumtoya:
While we wait for the gurus, no one can say, for sure, what is the best line of action in this.

Are you on Tier-4 visa? I would say wait till you are on Tier-2...

If you are on Tier-2, I would say getting a property is a risky venture but it's usually a good one albeit. If circumstances change, you can always sell or rent out. The adjustment I would advise is to avoid 25% if it will tie down too much of your capital. Being on a visa and having all the probabilities would mean you might wanna have sufficient Emergency Funds.

So, yes, getting the property, but don't use your last card, keep aside some Emergency Funds, so in case plans change, you don't have to sell your house in a hurry or be stranded.

Remember, the alternative is paying your Landlord's Mortgage without building any equity for yourself.

Thank you boss. We are on Tier 2.

Pearlyfaze:
Good afternoon Elders,

I need advise on certain decisions especially as regards the proposed 8years Skilled Worker Route to ILR. This proposal is currently causing riot in my head.

Remember, it is just a mooted idea for now. Why not hang on till you decide where you want to be? It just gives you more time to save.
Nigeria is full of crawling things and you lived there for a good chunk of your life. We spent one month in April traveling round Australia and I didn't see one crawling thing! Even when we went snorkelling in the middle of the ocean.

Ticha:


Remember, it is just a mooted idea for now. Why not hang on till you decide where you want to be? It just gives you more time to save.
Nigeria is full of crawling things and you lived there for a good chunk of your life. We spent one month in April traveling round Australia and I didn't see one crawling thing! Even when we went snorkelling in the middle of the ocean.

Thank you Mma Ticha We will wait till it becomes law and boldly written on Gov.uk. In the meantime we save money and wait till January 2024 then maybe just then we will begin movement to Australia especially the new law affects people already in the system.

Just to avoid repeating what the others have said, it might also be best to hold and spend a little time visiting those countries you guys are considering to live whenever on annual leave or planned short breaks. Just a sample case of Australia - you cant say you are scared of crawling things in Australia if you haven't even been there. Also, Buying a property you might not even like in a place you don't even like/considering leaving might not be the best idea. Although some say its easy to rent out your place while living in another country, i have heard cases of how much of a headache it can be. We are probably on the same boat - a family of 4, however we are planning to leave after naturalization next year. All we do now is just travel to places we would like to live and move when fully ready.
(

Pearlyfaze:
Good afternoon Elders,

I need advise on certain decisions especially as regards the proposed 8years Skilled Worker Route to ILR. This proposal is currently causing riot in my head.
We planned buying a property in the next 4-5 months paying the 25% deposit. But the riot in my head is not letting us arrive at any conclusion.
We have options of moving to either Australia (But we Dey fear crawling things), Canada on Work Visa or Ireland but none of this can start fully until my wife finishes her study by first quarter next year.

I know some of my rants here are unrelated but please I want to know what you gurus honestly think.

Mroriginal:
Just to avoid repeating what the others have said, it might also be best to hold and spend a little time visiting those countries you guys are considering to live whenever on annual leave or planned short breaks. Just a sample case of Australia - you cant say you are scared of crawling things in Australia if you haven't even been there. Also, Buying a property you might not even like in a place you don't even like/considering leaving might not be the best idea. Although some say its easy to rent out your place while living in another country, i have heard cases of how much of a headache it can be. We are probably on the same boat - a family of 4, however we are planning to leave after naturalization next year. All we do now is just travel to places we would like to live and move when fully ready.
(

Thank you so much.

Rapitex:
Hello All… is this time actually the best period to go on mortgage?. I got 2 options from Barclays Bank so far 5.75 percent (fixed for 2 years) and 5. 00 percent fixed for 5 years with 10 percent deposit on a tier 2 visa with just 2 years residence in uk..is this a fair deal considering the market of today and future forecast

Hello Rapitex, was this a 2 persons application?

Wristler:

Hello Rapitex, was this a 2 persons application?

yes it is 2 persons application but the interest rate dropped to 5.25 ( fixed for 2 years) with 15% deposit. I have submitted full application. Finger crossed

Rapitex:
yes it is 2 persons application but the interest rate dropped to 5.25 ( fixed for 2 years) with 15% deposit. I have submitted full application. Finger crossed

Wow, these rates are up there

I wrote my will last year and added my kids as beneficiaries to my house. I m also paying monthly payments which will finish next year to add them to a trust

My question is there any disadvantage of the trust?

If I decide to sell the house. Can I? Or are they the new owners

foxybingo:
I wrote my will last year and added my kids as beneficiaries to my house. I m also paying monthly payments which will finish next year to add them to a trust

My question is there any disadvantage of the trust?

If I decide to sell the house. Can I? Or are they the new owners

Your will doesn't have anything to do with ownership of your house or any other property while you're alive, generally speaking. It's an inert document for now. Any distributions or trust you create in it will take effect only after the will is 'activated' upon death/incapacity.

You can sell or do whatever with your house in the interim.

Not clear on what you mean by adding them to a trust next year though. If you're intending on creating a living trust, you absolutely need to speak to a solicitor/financial planner. It could have serious implications depending on how it's structured, and frankly there are too many variables (different types, different features and (dis)advantages) for anyone (not preempting anyone sha o) to give you concrete advice online.

Thanks koonbey

I meant I have been making direct debit since last year which will finish next year for them to be added to the trust

They have been added to a trust in my name already.

foxybingo:
Thanks koonbey

I meant I have been making direct debit since last year which will finish next year for them to be added to the trust

Which trust?

Is this a service you're using?

Maybe a link to it if you can.

foxybingo:
I wrote my will last year and added my kids as beneficiaries to my house. I m also paying monthly payments which will finish next year to add them to a trust
... ...
If I decide to sell the house. Can I? Or are they the new owners

I presume you implying selling the (paid up) house to the #Trust. Right!

foxybingo:
Thanks koonbey
... ...
They have been added to a trust in my name already.

Oga Lexusgs430 wrote something on Trust. I can't pick the right post.

Lexusgs430:
Ever heard of a trust...... We need to understand the concept of wealth preservation.......😁

Do give Ticha wealth preservation a read, just in case
check Placeholder 4 on page 1. It starts with ... "Pension and wealth planning for the future - very long read." ... (Ma Ticha write am 29 Apr 2022)

foxybingo:
I wrote my will last year and added my kids as beneficiaries to my house. I m also paying monthly payments which will finish next year to add them to a trust

My question is there any disadvantage of the trust?

If I decide to sell the house. Can I? Or are they the new owners

Depending on how you structure the trust - it's an entity of it's own so can sell and buy assets. The trust directors/ managers have to work in the best interest of the trust beneficiaries. Be aware of tax implications as well. However, one of the major reasons of creating trusts is to prevent assets being sold off or out of it. So it's well worth getting some professional advice

Finally, offer letter from Barclay bank dropped. Thanking everyone who has answered my questions in this group. We were able to get offer even with a fair credit score.

Hello good people,
Any takes on Shared ownership? Is it a yes or no? A relative is considering a 75% shared ownership as FTB.

seyejohn94:


Which mortgage broker are you using?

I just came across this thread. Have you guys tried Lyolds Bank?
This is because have not spent a year in the UK and one of their Mortgage advisor around March told me am eligible for about £109k with 5% deposit and when we calculate the percentage; I will be paying about £600/month. But I was not ready then. I will try my luck again to know if I'm still eligible for it.

Fantastic!!!! Congratulations!!!!

Please what's the duration between when you submitted the mortgage application and the formal offer?
Did you use a broker too?
Thank you!

Rapitex:
Finally, offer letter from Barclay bank dropped. Thanking everyone who has answered my questions in this group. We were able to get offer even with a fair credit score.

OfferAccepted:
Fantastic!!!! Congratulations!!!!

Please what's the duration between when you submitted the mortgage application and the formal offer?
Did you use a broker too?
Thank you!

All happened within 10 working days. I used a broker

Fab!
Thank you!

Rapitex:
All happened within 10 working days. I used a broker

Rapitex:
Finally, offer letter from Barclay bank dropped. Thanking everyone who has answered my questions in this group. We were able to get offer even with a fair credit score.

Congratulations brother man.