Mortgage vs Loan
I was reading the news today, and again it says that people can't afford to get mortgages. One lady had saved £50k (fifty thousand pounds) as a down-payment and was still unable to secure the mortgage.
Now, I know I have a different viewpoint on this bundle of stress, so I thought I'd go through my personal history before giving you my thoughts...
As a kid I lived with siblings and parents in a mortgaged home. I was taught to be aware of the mortgage payments so I understood it was a vital monthly payment - more important than flash cars or fancy holidays, new trainers or mounds of clothes. I was also taught that a mortgage is a loan with a huge amount of money to pay back.
In my early 20s I moved in with my then fiance. He had the mortgage in his name, and changed this debt to both names when we were married. I quickly realised that there were many worries attached to buying a house. Every penny we had went on the house - both the mortgage and repairs to the fabric of the bricks and mortar; as well as heating, roofing repairs and water heater. My first husband was fixated with the 'fact' that we would make so much money, as the house was an investment.
Previous to our relationship, Man Wonderful had paid off his first mortgage. I always thought this was a main purpose to life: but what it really was for him and his first wife was a massive debt. Yes, they paid it off, but living in a mortgaged house still costs you on top of the debt. Parts to repair or replace items. Hiring specialists to carry out work. Having items serviced. Always something to pay out on.
Now then.
We (Man Wonderful at moi) live in a hired house. A rented house. We pay a monthly amount to our private Landlord. This is our home. We don't pay for any repairs to the main services to our home. If we choose to decorate a room; that is our choice - but equally we can choose to leave the decor as it is. Our water heater and stove are serviced every year, as is the heating system, gas fire, cooker/oven and fitted safety alarms. Our garden fencing is checked and repaired if needed, as are the paths from the road to our doors. The exterior is maintained - we had a new front door and new loft insulation fitted last summer, ready for the cold winter. Any issues with the hardware of the house is seen to briskly. We pay our monthly rent, and part of this sees to everything and anything needed for the nuts and bolts of the house.
If we decide to move to a different property / area / city / country we just give notice and get on with it. We don't have the anxiety of having to sell a property.
Looking back at my adult years, it would have made more sense to rent throughout my years. Renting makes it more manageable to put money into savings.
(Of course, two things I have on my side are age and experience.)
FMxx
My maternal great grandparents purchased their house in 1896! My maternal grandparents bought theirs in 1924, and my parents bought theirs in 1955!
ReplyDeleteWe bought ours in 1984, and our son bought his in 2013.
No-one in either mine or my husbands family have ever lived in rented property, so it's a very alien concept to me!
Yes, it means that we can't just 'up and move' but we love the area we live in, 1 mile from the coast, three miles in the other direction from open countryside, unbeatable for me!
I can't imagine why anyone wouldn't want to own the house they live in, there are a lot of expenses involved I know, but it's 'ours', and when we're no longer around, it will be a lovely little nest egg for our son! It's the way my family have always been, we pay our way in everything, but still leave those who come after us with something to ease their way in life a little!
Yes, I get what you are saying. x
DeleteUmmm thats a bit iffy.What would happen if your landlord decided to sell and not to you ? Any money you spend on painting a wall is potentially money in someone elses pocket if you enhance the place and up its value.Heaven forbid but when you shuffle off what have you to leave your kid ? Your rent book ? Imo renting is dead money buy pay off your mortgageas quick as you can enhance the place and look forward to leaving that asset to your loved ones
ReplyDeleteI understand your comment - sadly many people can't get mortgages these days, so are left as renters.
DeleteAs a child raised in insecure accommodation, I could not agree less with you . I own my own home . Mortgage paid off early . A balanced approach to maintenance meant no unexpected bills. As a widow, I know I can stay in my community without worrying about having to move should the landlord want the property back . I am also protected from rising rents, and do you have to budget for rent costs . I would advise anyone to buy not rent - and have given our children deposits for their homes . Paying rent is foolish in my view .
ReplyDeleteMary
Thank you for your comment Mary - it helps my blogpost to have a balanced viewpoint. x
DeleteI understand what you're saying, but I was always taught that paying rent was "dead money" because at the end, with a mortgage you have the house as something tangible after paying out all the money. However, as you say, the MORTGAGE then becomes something dark and threatening hanging over you. If your landlord is caring and ethical, then you have a good deal, renting; I might be worried about the house being sold, or being given notice so that the landlord can do Airbnb or whatever. This has happened to a friend's daughter in Newquay. The landlord felt he/she could get more money on short term holiday lets. That would be a worry for me.
ReplyDeleteI am sorry to read about your friend's daughter - this gives another perspective on the blogpost. x
DeleteThis post made me think hard about our experience of housing. We have only had 1 mortgage. We also had the huge challenge of interest rates well into the teens (not the 'high' interest rates everyone gets in such a flap about now) and a shortfall on our endowment, which meant that we ended up paying any extra money that came our way the last few years of our mortgage straight to the building society so that we didn't end up with a huge bill at the end of it. On the plus side, they were very understanding and suspended interest payments for a couple of years when I became a stay at home Mum. Would anyone do that now? I doubt it! My daughter rents and loves it. She has no intention of ever buying a house. She has been lucky enough to have a couple of very good landlords (it sounds like you do too) who sorted problems out quickly. She has put money into savings and can afford nice holidays. If I were in her shoes now I would do exactly the same thing.
ReplyDeleteIsn't it scary how society has changed around in one generation?
DeleteI, too grew up being told renting was dead money and consequently had a mortgage from the age of 21 till I was 58. All the way through the high inflation of the 80's and 90's when mortgage interest rates were 18%.
ReplyDeleteBut having paid it off, I was then able to retire from work at 59 and live on my small private pension, till I was 66, and recieved my state pension.
That alone has allowed me to spend precious time every school holiday with my 4 Grandchildren and it has meant a substantial decrease in childcare cost for my own children.
I strongly disagree with owners, of property having to sell their property to fund care , when renters who haven't had a mortgage round their necks and who haven't worked and gone without a lot to make sure the mortgage is paid each month, get their care for free - that is very unfair.
Both my Son and Daughter own rental properties, my Daughter recently had to evict a tenant who thought it was acceptable to not pay her rent. It has cost my girl, more than £5,000 to replace the bathroom (the toilet was just so disgusting that any decent clean person wouldn't have ever gone near it) replace floorboards that had been taken up (why?) door handles that had been taken off, (again why?) new carpets, fully redecorate and remove a lounge full of black bin bags full of household waste
I worked in Social Housing so have seen, my fair share of dirty filthy properties left by some tenants, but this one was up there with the best - why some renters feel its acceptable to wreck a property and leave a property in such filthy, disgusting condition , is beyond me.
Why don't they stop and think that someone has got to work hard to be able to pay out to put that property back to rights.
Then you've got the scumbag M.P.'s and stupid do gooders saying oh it's a shame for renters, (No its not) and making it as hard as possible, for landlords with stupid rules on who and when you can evict a tenant, harsh taxation and high interest rates.
Both of my kids are now looking to get rid of their rental properties as they just feel that they're being took for mugs by everyone, so what happens when other landlords do the same (which a lot are)
What will happen to all the renters who think it's so easy to not take on the responsibility of working hard for their own roof over their heads.
Food for thought.
Thank you for your thoughts, Anne: I'm going to write more on this topic, I think! x
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