Mortgages

oobers · Post by **oobers** » 18 Jan 2006, 17:48

I hear what everyone is saying about paying off debt, but many of us are not in a position to do so. My current mortgage deal is about to run out and before I go looking for the cheapest deal I can get, has anyone any suggestions as to the least vulnerable mortgage type as we enter turbulent energy and economic waters? Or any imaginative alternatives to a conventional mortgage??

Currently, I have a small discounted variable rate, interest only on a 90K loan.

acrowe · Post by **acrowe** » 18 Jan 2006, 18:21

If you are feeling adventurous you could look at getting a mortage in Dollars, as it is likely the value of it will decline, you could also take out a larger loan and invest some of the excess into other currency which is likely to increase, or even into gold/silver.

A more standard answer would probaly be a fixed rate mortage, but debt is debt just try and pay it off as fast as you can manage.

Bandidoz · Post by **Bandidoz** » 18 Jan 2006, 18:39

Do you have spare "cash" to throw into the mortgage? If so then I'd be inclined to suggest an Australian-style mortgage, which allows you to throw as much money as possible into it and thus pay it off as fast as possible.

Otherwise go for a fixed or capped rate mortgage, making sure the redemption penalty is low.

Ballard · Post by **Ballard** » 18 Jan 2006, 22:29

For long term fixed rate:-

Cheshire do an up to 20 year fixed rate at 4.99%

Britania do a 10 year fixed rate at 4.74%

At least they did last time I looked.

This will protect you from inflation, however will you still be earning enough to keep up the repayments?

oobers · Post by **oobers** » 19 Jan 2006, 09:11

Thanks for these suggestions.

I did a quick search on foreign currency mortgages and it would seem that this means I would pay back at the interest rate of the country in which currency I borrow. US mortgage rates appear quite a bit higher than ours. If the dollar value falls, what will happen to these rates? Also, if the dollar rate fell significantly against the pound, making my loan much smaller in sterling value, would I be able to take any immediate advantage, eg switch back to a UK loan? Sorry - I'm hopeless on economics

snow hope · Post by **snow hope** » 19 Jan 2006, 14:53

What about a 10 year fixed rate mortgage in dollars.

Fixed to mitigate the likely rise in interest rates the world will experience when inflation ramps up.

In dollars to take advantage of the likely devaluation of this currency when the shit hits the fan.

I would do this myself if I didn't have 3.5 years to go in a 5 year fixed deal. In fact it might well be worth me taking the hit on this anyway.....

Andy Hunt · Post by **Andy Hunt** » 20 Jan 2006, 12:13

The only other thing you could do is find someone else with a house, get them to sell it, buy a house big enough for both of you(r families), and pay the profits off the mortage.

fishertrop · Post by **fishertrop** » 20 Jan 2006, 13:08

Andy Hunt wrote:The only other thing you could do is find someone else with a house, get them to sell it, buy a house big enough for both of you(r families), and pay the profits off the mortage.

Spot on, this route is often overlooked.

I know co-habiting with friends/parents etc is far from ideal but if it lets you live debt-free than surely it's worth serious consideration.

Pooling money to buy a bigger house which you can then divvy up to keep some personal space has a lot going for it.

It pays the think creatively.

Andy Hunt · Post by **Andy Hunt** » 20 Jan 2006, 13:12

Pooling money to buy a bigger house which you can then divvy up to keep some personal space has a lot going for it.

And maybe a good plot of land, too - for growing food, fuel etc. It gives you more skills within the house too, which makes looking after the household easier and more enjoyable.

The hippy commune comes of age!

peaky · Post by **peaky** » 20 Jan 2006, 13:32

Andy Hunt wrote:
Pooling money to buy a bigger house which you can then divvy up to keep some personal space has a lot going for it.
And maybe a good plot of land, too - for growing food, fuel etc. It gives you more skills within the house too, which makes looking after the household easier and more enjoyable.

The hippy commune comes of age!

That's where I'm heading - I've sold up, put the money in the bank, started renting and plan to join a Eco-community. That's my dream anyway

A long way to go yet though...

charlie · Post by **charlie** » 20 Jan 2006, 16:18

peaky, you mention you are renting and saving money. I am too, partly because I have been priced out of the house market and partly because I've been believing there's going to be a house price crash for the last few years which never actually starts.

Perhaps this should be in another thread but what do people see happening to the value of savings in the future. Are we about to enter a period of deflation whereby savings become worth more or are we about to enter a period of high inflation in which case savings become worth less? If the latter, what strategies for investment of savings do people have (assuming there's not enough to buy a plot of land to forest on at the moment)? I'm clearly going to do my own research but am very interested in everyone's opinions.

(Apologies if there has already been a thread about this - I had a look but couldn't see an obvious one)

Edit: Oops, just spotted the gold thread - sorry, don't know how I missed it first time round...

oobers · Post by **oobers** » 20 Jan 2006, 17:17

I fully intend to go down the community and co-operation housing route as soon as I can but for the time being, I have a business I run from home and don't think I could easily do this from rented accommodation.

Has anyone else had experience of the foreign currency mortgage? How does it work in reality?

snow hope · Post by **snow hope** » 20 Jan 2006, 23:17

I too would be keen to hear others views on a fixed mortgage in dollars. The more I think about it the better it seems, but what are the pitfalls?

peaky · Post by **peaky** » 25 Jan 2006, 13:21

charlie wrote:Perhaps this should be in another thread but what do people see happening to the value of savings in the future. Are we about to enter a period of deflation whereby savings become worth more or are we about to enter a period of high inflation in which case savings become worth less?

Well charlie, I don't claim any expert knowledge on this one

but I see the money as a way of buying into/setting up a community and for buying useful stuff. I'm not looking at it as an investment although in the short term some of it will be used to accrue some extra value before the SHTF. Money is only useful when it's actually spent.

charlie · Post by **charlie** » 25 Jan 2006, 14:09

thanks peaky,
I think one of my difficulties is that while I'm currently based in London and renting, I want to move up to Scotland in a couple of years time and buy there once the property market has come off the boil a bit. So I see my main investment as being a property (ideally in a small community) just not yet as I haven't done nearly enough research about location .
Once I have a property in place I can start investing in other items to put in it, so in the meantime, given that 2 years may be an optimistic timescale and it will probably take me longer to amass enough funds, I'm trying to work out what to do with my savings.