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Thread ID: 106691	2010-01-19 06:35:00	Mortgage question.	Nomad (952)	PC World Chat

Post ID	Timestamp	Content	User
849911	2010-01-19 06:35:00	These days are a lot different to the past. How are they now? I was told that in the property boom days (2000), that they tend to loan you more than you may finance. In the past they may only take 50% of your income for assessment, they assume 50% are for your own spending ..... Do banks loan to you on the basis that you will eventually own the house and you have the means to achieve that or are they open to speculative? Meaning, if you are able to pay the interest but not able to eventually own the house, they may still loan to you, because at the end of the day they get money from charging you interest and they can always sell the house, deduct whatever fees assoc with that and also taking into consideration that property prices may appreciate over time. Many thanks. :D Mods - wrong forum. Please kindly shift as required. Cheers.	Nomad (952)
849912	2010-01-19 07:42:00	At the end of a vanilla 25 year mortgage after making the minimum payments, you have paid off the principle as well as a crap load of interest. So yes if you don't pull out early you end up owning the house to answer your question, you cant JUST pay interest. In fact nowadays it is recorded the average person pays off there mortgage quicker, cant remember the stat but its like average 18 years or something. I believe this is largely because houses in NZ basically doubled in price between 2000 and 2005 ish, and it became very obvious interest was a killer far more than in the past. There are two main winners with these high property prices banks (obviously) and property investors with more than one house (not there family home). The average family with one family home are actually better off with pre-2000 type prices and there house being half the value. It would mean there next house is also half the cost and entry into property is far cheaper with the banks making less on interest. The average person seems to gets excited when there house value goes up but it just means there NEXT house has gone up to relative, the international banks just sit back and rape us on interest off huge mortgages. This is a little simplistic explanation, but its basically why the government hates these property booms.	Battleneter2 (9361)
849913	2010-01-19 08:35:00	At the end of the day, house prices are governed by demand, which in turn has been fuelled by population growth, which in turn has been fuelled by massive immigration, getting on for 1 million more people since we came (:)) around 33 years ago. It was just the same in the UK, massive immigration over the last 60 years. House we bought new in 1970 for £6000, we sold for £16000 in 1977. Last year, same house on market (admittedly with extensions and a lot of extras added) £475,000. These are GB pounds not dollars.....:rolleyes:	Terry Porritt (14)
849914	2010-01-19 09:54:00	At the end of the day, house prices are governed by demand, which in turn has been fuelled by population growth, which in turn has been fuelled by massive immigration, getting on for 1 million more people since we came (:)) around 33 years ago. It was just the same in the UK, massive immigration over the last 60 years. House we bought new in 1970 for £6000, we sold for £16000 in 1977. Last year, same house on market (admittedly with extensions and a lot of extras added) £475,000. These are GB pounds not dollars.....:rolleyes: Also it is fueled by the massive tax breaks property gets, such as tax free capital gains. Also with property investors, the ability to write of loss against your personal income. If a property land tax is introduced, which sounds likely (eg 0.5% of the land value) , and they remove tax benefits, then housing prices would fall.	robbyp (2751)
849915	2010-01-19 11:51:00	Do banks loan to you even if the person cannot pay the interest and the principle off? I would think some people may take property as investment, even if I cannot pay it all off, if I can satisfy the bank and feed them interest money, cos later on I can sell it, get more money if it appreciates then rent to live and use the money also for retirement ...... Ie., you cannot die with your house. Anyone know how banks calculate you as a customer? Ie., how much of your income do they take into consideration and the deposit that you have?	Nomad (952)
849916	2010-01-19 11:54:00	Also it is fueled by the massive tax breaks property gets, such as tax free capital gains. Also with property investors, the ability to write of loss against your personal income. If a property land tax is introduced, which sounds likely (eg 0.5% of the land value) , and they remove tax benefits, then housing prices would fall. My old man has this thing with property, he is old style, so he cares about status etc etc... I say to him, a child put money into a bank and he/she is taxed. If one purchase any investment 10k or 500k it is taxed. For those who have more than 1 property, they can access LAQC or if they hold a house for 5+ yrs I think, there is no capital gain tax. Should they sell and get big money, they keep it all.	Nomad (952)
849917	2010-01-19 17:50:00	My old man has this thing with property, he is old style, so he cares about status etc etc... It is called "pride"... an attitude that is sadly disappearing these days. Ken :2cents:	kenj (9738)
849918	2010-01-19 18:44:00	Do banks loan to you even if the person cannot pay the interest and the principle off? .................................................. ..... They certainly did.....the so-called sub-prime mortgage market.............major cause of the crash.... How The Markets Really Work (www.youtube.com) Within a few years they will be back in their bad old ways again..anything to make money off the backs of the populace.	Terry Porritt (14)
849919	2010-01-19 18:59:00	Do banks loan to you on the basis that you will eventually own the house and you have the means to achieve that or are they open to speculative? . Banks loan to you on your ability to pay them back . With interest and principal . They don't care whether you end up owning it or not . If your circumstances change and you can no longer pay them, they'll sell it for as much as they can get, and if that's less than you owe then you still have to pay them the difference . If that means taking it to Baycorp, they will .	pctek (84)
849920	2010-01-19 20:59:00	At the end of a vanilla 25 year mortgage after making the minimum payments, you have paid off the principle as well as a crap load of interest . So yes if you don't pull out early you end up owning the house to answer your question, you cant JUST pay interest . . . . It is possible to have interest only mortgages . . . . I would think some people may take property as investment, even if I cannot pay it all off, if I can satisfy the bank and feed them interest money, cos later on I can sell it, get more money if it appreciates then rent to live and use the money also for retirement . . . . . . Ie . , you cannot die with your house . Anyone know how banks calculate you as a customer? Ie . , how much of your income do they take into consideration and the deposit that you have? I don't know if banks will lend to you on what you are proposing . What will you do if the house you bought falls in value? When that happens, your loan will be worth more than the house . When that happens, banks get jittery and call in a large chunk to get you back into positive territory . If you can't manage that, they will force a sale and you owe the difference between the loan value and the sale price . If you have a larger deposit, it will reduce your interest costs obviously . They look at your income, take a bit off that to use as living expenses etc . From that value, they use as what you can pay per month/week/etc and from that, work out what they can lend you . Its probably best you just go see the bank to see what they can do for you .	utopian201 (6245)
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