House buying, mortgages, insurance, etc

[TxRover]

18 minutes ago, Shadow Play said:

I know California has extremely expensive property tax and i would imagine it will be quite high elsewhere.  In Scotland the cost of Council Tax for a Band E house (average type house?) is under £2,500.  Insurance can be found for under £500.  That’s only £250 per month.  

I think a significant problem is some people appear to have mortgaged themselves near to the max to get as big / nice a house as they can.  To make matters worse people were taking out 2 year fix mortgages because the interest rates were cheaper.  10 year mortgages tended to be overlooked because of the comparatively higher interest rates.

Texas has punitively high property taxes due to the lack of a State Income Tax. Property taxes here are a game, due to strange rules on valuation. There is an Appraisal Board in each County that is mandated to issue “market values” each year, reflecting actual salable value…but it’s been jacked for years. The more expensive the house, the further below market value the appraised market value really is most of the time. One of the biggest issues is sales prices are not public records.

Due to this, valuations are all over the board. While I was a home owner, I played to game quite well, with my homes market value usually the furthest below the trend line per square foot in the neighbourhood. The bonus is a successful valuation appeal results in the “appraised market value” not being eligible for increase the next year, by law, unless they can clear a very high proof standard. You end up saving money for years if you get skillful enough, because the yearly increases are also limited by law to 10% above the previous year.

[Shadow Play]

16 minutes ago, TxRover said:

Texas has punitively high property taxes due to the lack of a State Income Tax. Property taxes here are a game, due to strange rules on valuation. There is an Appraisal Board in each County that is mandated to issue “market values” each year, reflecting actual salable value…but it’s been jacked for years. The more expensive the house, the further below market value the appraised market value really is most of the time. One of the biggest issues is sales prices are not public records.

Due to this, valuations are all over the board. While I was a home owner, I played to game quite well, with my homes market value usually the furthest below the trend line per square foot in the neighbourhood. The bonus is a successful valuation appeal results in the “appraised market value” not being eligible for increase the next year, by law, unless they can clear a very high proof standard. You end up saving money for years if you get skillful enough, because the yearly increases are also limited by law to 10% above the previous year.

Wow.  I had no idea that was the way property tax could be levied.  I suppose one benefit of this is the fact that you pay tax on the supposed real and current value of your house.  Unlike here in the UK where it is based on a drive by survey carried out in 1991.

[TxRover]

3 minutes ago, Shadow Play said:

Wow.  I had no idea that was the way property tax could be levied.  I suppose one benefit of this is the fact that you pay tax on the supposed real and current value of your house.  Unlike here in the UK where it is based on a drive by survey carried out in 1991.

Here’s how f’d up it has been…a house for sale at $10,000,000 was appraised at $3,000,000; meanwhile a house for sale at $420,000 was appraised at $380,000…you can see how unfair that is.

Now, how do you play the game? OK…I buy a house at $229,500…the pervious owner was paying taxes on an appraised value of $187,000 with a market value of $205,500. The difference is due to the limits on yearly increase, which often results in taxed values below estimated market values. Then, with a sale, the Appraisal District jumps the taxed value to the “market value”, in this case $205,000, because they don’t know what I paid.

So the next year the market is good, and they estimate market value at $235,000, but taxable/appraised value can only increase from $205,000 to $225,500 (10% limit). I protest the market value and argue for $218,119. This is where it gets weird, the district is required to allow an online protest system, where a computer assesses the protests and decides to accept protests or schedule them for a in person hearing. If you protest early enough, the computer doesn’t have a good database and allows a wider range for settlement…I also found that the computer likes pointy numbers versus round number…who knows why. It accepts the $218,119, and that’s what I pay taxes on…and the next year it stays at $218,119, when the districts own system says it should be $255,000, due to a legal quirk.

So now after two years, they propose $280,000…but even if I don’t protest, the $218,119 only increases to $239,931 that year and then $263,924 the next year, and then it can get to $280,000 the third year on, by which time the estimated value is $335,000, but can only be taxed at $290,316…and so on.

A good protest saves you money over your neightbours for years. I built a spreadsheet that I input the public data for 20-25 houses like mine on my street and nearby and calculated a number I thought the Appraisal District computer would accept as long as I proposed it on one of the first days appeals were allowed…I won 5 of 7 years, and then on a sixth year, after they computer denied an appeal, they offered to settle for a value $9,000 LESS than the computer rejected. Modern systems are f**ked up, and you can play them.

[vikingTON]

1 hour ago, Honest_Man#1 said:

My fixed rate ends in November. My best option at the moment is an increase of 63% on my current monthly payment.

There are going to be a significant number of people who have overstretched themselves to live in a big house on a maximum mortgage with a brand new car in the drive on finance, that are going to be seeing the bailiffs.

They really aren't because they can always sell the house and downsize. Negative equity is not a serious issue in the current market, which is why the mewling about extra support for mortgage payers is utterly ridiculous.

What you're describing is what passes for a market doing what passes for self-correction. 

[Shadow Play]

For anyone that is struggling financially and has a spare room it is possible to take in a lodger and earn up to £7,500 per annum tax free.  

Edited June 19, 2023 by Shadow Play

[mathematics]

On 18/06/2023 at 19:33, ICTChris said:

Home ownership rates by country

 

4 hours ago, Shadow Play said:

I don’t think it is.  In the UK it is 35% private or social tenancies.  It’s higher in Germany but not most other European countries.  

Each to their own but I would rather own my home than rent it.  Once the mortgage is paid you’re living ‘rent’ free for the rest of your days.  It also gives you something to hand onto the kids (up to £350,000 tax free if you are otherwise caught with inheritance tax £1M for a couple).

 

I stand corrected. 

[BukyOHare]

4 hours ago, 19QOS19 said:

Is this offer still available? My Fixed Rate comes to an end next year and I'm starting to think what might be best. Got a few queries in regards to my next deal and what would be best for us. Is it possible to give you a PM tomorrow with the figures? No worries if you're too busy

Absolutely.

[Sergeant Wilson]

9 hours ago, Shadow Play said:

For anyone that is struggling financially and has a spare room it is possible to take in a lodger and earn up to £7,500 per annum tax free.  

^^^

 

[ICTChris]

We have friends who had to remortgage recently to free up money so one of them could go abroad for an operation. Not only did the NHS fail to provide prompt care but they are now going to be facing significantly higher payments. What a country.

I am actually on a waiting list for an operation but I got a five year fixed rate deal at 4% just before the Truss crash so I will just suffer through

[Hedgecutter]

This sob story below is where I completely lose sympathy with folk.

What did she expect to happen when taking a monster mortgage of £1,300pm at a time of record interest lows?     All she needs is a house for a family of four in East Anglia (i.e. not exactly London).  Another case of folk jumping rungs on the so-called 'housing ladder' (i.e. never having anything more than a mortgage that would still be affordable during higher rates, and then upscaling once the balance is significantly down).

Can't support that Lib Dem policy to give cash handouts to folk like this, who have lost their mammoth gamble.  It's an increase to historically average rates, not a period of supermegahyperinflation.

 

https://www.bbc.co.uk/news/uk-england-norfolk-65761233

Quote

Victoria Watts, who lives with her husband and two children in Norwich, knew her mortgage of £1,300 a month was going to increase but she was shocked to learn by how much.

The 35-year old senior insurance manager received a letter last month saying her fixed-rate deal was coming to an end, and the family would need to find an extra £1,400 a month.

Edited June 21, 2023 by Hedgecutter

[Soapy FFC]

12 minutes ago, Hedgecutter said:

 

What did she expect to happen when taking a monster mortgage of £1,300pm at a time of record interest lows?     All she needs is a house for a family of four in East Anglia (i.e. not exactly London).  Another case of folk jumping rungs on the so-called 'housing ladder' (i.e. never having anything more than a mortgage that would still be affordable during higher rates, and then upscaling once the balance is significantly down).

At least 2 of the people in that report were on interest only mortgages and I severely doubt they would have done anything towards paying off the balance, let alone how they would repay the capital at the end of the mortgage.

One of them was complaining about the mortgage on their rental property. Tough, that's a risk you take as a rental owner.

[Michael W]

I am having a hard time believing that someone who has a £1300 mortgage is now facing a monthly payment of £2700, quite frankly. There are some facts being omitted from this statement - has it been a 100% mortgage, is it a BTL mortgage or interest only? I'd expect the increase to be about half of what the person is saying it'll be. 

I also don't think mortgage support from the Government is in anyway justifiable - you're looking at about 30% of households (so a minority of the population) and it'll be expensive at a time public finances are under pressure, particularly when giving money to people generally better off versus the country as a whole. And it'll fuel inflation.

[Bairnardo]

35 minutes ago, Hedgecutter said:

This sob story below is where I completely lose sympathy with folk.

What did she expect to happen when taking a monster mortgage of £1,300pm at a time of record interest lows?     All she needs is a house for a family of four in East Anglia (i.e. not exactly London).  Another case of folk jumping rungs on the so-called 'housing ladder' (i.e. never having anything more than a mortgage that would still be affordable during higher rates, and then upscaling once the balance is significantly down).

Can't support that Lib Dem policy to give cash handouts to folk like this, who have lost their mammoth gamble.  It's an increase to historically average rates, not a period of supermegahyperinflation.

 

https://www.bbc.co.uk/news/uk-england-norfolk-65761233

The BBC really do have a terrible record at finding people for these stories who you feel sorry for. 

[Hedgecutter]

I'm currently comparing 2 year fixed deals Nationwide (who I'm currently with), and with a LTV of 30% I'd be getting offered a higher interest rate than somebody with a LTV of 80% on a balance £100k higher than mine .  WTF is that all about? 

Eta: my current fixed deal doesn't actually expire until June next year (phew); I'm simply doing this seemingly crazy thing that some call 'planning ahead'.

Edited June 21, 2023 by Hedgecutter

[Soapy FFC]

3 minutes ago, Hedgecutter said:

I'm currently comparing 2 year fixed deals Nationwide (who I'm currently with), and with a LTV of 30% I'd be getting offered a higher interest rate than somebody with a LTV of 80% on a balance £100k higher than mine .  WTF is that all about? 

They must want to make a certain minimum amount of money from every mortgage.

Edited June 21, 2023 by Soapy FFC

[Bairnardo]

11 minutes ago, Michael W said:

 

I also don't think mortgage support from the Government is in anyway justifiable - you're looking at about 30% of households (so a minority of the population) and it'll be expensive at a time public finances are under pressure, particularly when giving money to people generally better off versus the country as a whole. And it'll fuel inflation.

I think you're right here. I fully agreed with the govt stepping in on utility bills. The cost of which remains a disgrace. But with mortgages, there were choices when the mortgage were taken out and there are choices now for all involved. Now, they are tough, massive choices, but they are there. Lives were at stake in a winter energy crisis. Only pride really stands to get hurt when downsizing 4 bedrooms to the 2 you really need. 

[Central Belt Caley]

1 hour ago, Hedgecutter said:

This sob story below is where I completely lose sympathy with folk.

What did she expect to happen when taking a monster mortgage of £1,300pm at a time of record interest lows?     All she needs is a house for a family of four in East Anglia (i.e. not exactly London).  Another case of folk jumping rungs on the so-called 'housing ladder' (i.e. never having anything more than a mortgage that would still be affordable during higher rates, and then upscaling once the balance is significantly down).

Can't support that Lib Dem policy to give cash handouts to folk like this, who have lost their mammoth gamble.  It's an increase to historically average rates, not a period of supermegahyperinflation.

 

https://www.bbc.co.uk/news/uk-england-norfolk-65761233

I read that as they were going to go onto the Standard Variable rate at the end of their fixed term and then managed to get another deal which was a tracker mortgage. Could be wrong though. 
 

Have to laugh at the guy at the end of the article:

Quote

"The government is concentrating on food prices and fuel. I appreciate that it affects a lot of people very badly. For me, a few pence on the price of a box of eggs is a drop in the ocean compared to a monthly interest payment rise of £500 and everything else to follow."

Aye no bother mate cause no one needs to eat or heat their home.
 

He also used his 50k savings to take the costs on his monthly payment down by £38? Surely that’s not right or he’s fibbing? 

[Gnash]

5 hours ago, Michael W said:

I am having a hard time believing that someone who has a £1300 mortgage is now facing a monthly payment of £2700, quite frankly. There are some facts being omitted from this statement - has it been a 100% mortgage, is it a BTL mortgage or interest only? I'd expect the increase to be about half of what the person is saying it'll be. 

I also don't think mortgage support from the Government is in anyway justifiable - you're looking at about 30% of households (so a minority of the population) and it'll be expensive at a time public finances are under pressure, particularly when giving money to people generally better off versus the country as a whole. And it'll fuel inflation.

On the first point, that's perfectly feasible.  She could be moving from a fix at 1% to an SVR at 8%.  If the term is pretty long, the monthly payment could easily more than double.

Totally agree on the second point.

[101]

7 hours ago, Hedgecutter said:

This sob story below is where I completely lose sympathy with folk.

What did she expect to happen when taking a monster mortgage of £1,300pm at a time of record interest lows?     All she needs is a house for a family of four in East Anglia (i.e. not exactly London).  Another case of folk jumping rungs on the so-called 'housing ladder' (i.e. never having anything more than a mortgage that would still be affordable during higher rates, and then upscaling once the balance is significantly down).

Can't support that Lib Dem policy to give cash handouts to folk like this, who have lost their mammoth gamble.  It's an increase to historically average rates, not a period of supermegahyperinflation.

 

https://www.bbc.co.uk/news/uk-england-norfolk-65761233

Absolutely crazy that they are quoting her moving to the SVR, which must be the doubling of the costs. 

Far cheaper deals out there and she has 6 months to see if rates stabilise or fall, seeking professional advice rather than running to the Beeb would be a far smarter thing to do.

[RH33]

My heart bleeds for the landlord, it really does.

I'm guilty of watching property shows like location and what I always find strange on the insistence kids need own rooms. Now ideally I'd love more space but it wasn't option. If my son comes back it'll be a sofabed in living room for me part of the week. I bought in August just before shit hit fan so I've four years to worry but I'm pay a bit more than minimum.

If you're at 59, interest only with no evidence capital plan and on benefits then you've no hope of a mortgage. Even in work she'd only have 9/10 yr options. 

The examples the BBC used were terrible.