the 125% mortgage...
Ok, so you see a house you like, say it's worth £200k. You could borrow £225,000 against it because "it's bound to go up in value, right?".

So, you sign the paperwork, get the cash and buy the place, along with £25k you piss up the wall on Plasma TVs, buying the entire catalogue of Ikea, etc.

So, the mortgage company own the place for as long as you owe them money (that's why they hold the deeds). But, they actually own the house, plus 25% which means that someone with no claim on your home actually mathematically owns more of it that you do - you own -25%, they own 0%, after all. Think about that for a second and then it will become obvious to even the most dedicated idiot that this is A Very Bad Idea....-
(Chad, Fri 23 Jan 2009, 14:34, 9 replies)

Hurm
I wouldn't piss on the wall where my plasma tv is because it might damage it. I would probably piss on the other wall onto a picture I don't really like much.
(powervator and NONE SHALL PASS, Fri 23 Jan 2009, 14:37, closed)

112.5% mortgage
25k is 12.5% of 200k, I'm sorry but i'm too mutch of a cunt to not mention that
(roger_cook, Fri 23 Jan 2009, 14:50, closed)

Read the post again:
225,000 + 25,000 = 250,000
( IHaveABadFeelingAboutThis most likely working from home on, Fri 23 Jan 2009, 14:55, closed)

I've just read it again
I can only see 200,000 + 25,000 = 225,000
(Vice Admiral Sir Charles Cockbrush KCB MBE DSO, who is finding it increasingly difficult to log into b3ta.com wants to duck your aunt and kick your puppy, Fri 23 Jan 2009, 15:21, closed)

I like the
image of walking into one of these people houses and hearing:
'GET OUT OF MY HOUSE'

'well, actually, you own less than me'
(Fuckarma was masturbating into your handbag, Fri 23 Jan 2009, 14:52, closed)

Agree completely
When we moved into our current place, we ended up buying somewhere that was about 50% of what we could have borrowed. Had a big chunky down-payment from the profit we made on our previous house. 4 months later, the tech bubble burst and I was laid off. Couldn't find anything else for 6 months but kept the house going no problem on savings. When I did finally get a job, it was on much less than I was on previously but still we could afford to keep the house. Of course, house prices in the states are not anywhere near as stupid as they are in England (in most locations).

The point is, be a bit sensible about things, you never know what's around the corner.
(Richy_T hundreds if not thousands of dollars, Fri 23 Jan 2009, 16:21, closed)

that's true...
The fact is that the "bubble" is ficticious based, in large part, on jealousy. Houses in London, or commutable to London are expensive - we all know this. However, I can remember being able to buy a large (like 4+ bedroom) house in Leeds for half of what my parent's 3 bed semi in Surrey cost. Why? Because there is more desire to live in Surrey, so the price is driven up.

Of course, under New Labour, this was seen as unfair, somehow, so we've seen a concerted effort to denegrate the South East by building on green belt land and making sure all the kosovans and other immigrants are housed in that area, despite there being street upon street of empty houses available in Yorkshire (Sheffield, mainly). Now, I like the parts of the North, but I am sensible enough to realise that downtown Chapeltown is not as desirable as Notting Hill or Chelsea.

The houses that are crashing are those where suddenly your £40k terrace in Bradford was worth £210k because a similar house in London raises bids in excess of £400k. Buy to let had a lot to do with it, but basically, it was greed that pushed up inflated prices and now they are reaping what they sewed to a large extent...
(Chad, Fri 23 Jan 2009, 16:35, closed)

Yes.
It's a lie that a house is an investment. It's a place to live. I bought because I like the idea that I'll have a house at the end of things (though I have heard of studies that show that it's financially better to rent and invest rather than buy) and that I'm not beholden to anyone for what I do to the house. But ultimately, the house price is irrelevant to me because the basic equation is "I pay X, I have somewhere to sleep".

The only real way house prices are relevant are 1)Lower house prices=lower taxes (hopefully) and 2)If we do upgrade, the price differential will be smaller.
(Richy_T hundreds if not thousands of dollars, Fri 23 Jan 2009, 16:42, closed)

Hehe
I live near Chapeltown. I think its a lovely place and much nicer than Maida Vale.
(powervator and NONE SHALL PASS, Fri 23 Jan 2009, 16:47, closed)