The historical average UK house has a price - earnings ratio of 3.5 (average house price 3.5 times the average earnings were). But in 2006, this has increased the average house price earnings ratio of almost 6.0 (Source: [http://www.nationwide.co.uk/hpi/historical.htm])
The effect of this is that for first time buyers, if they are capable of a mortgage that may borrow up to 5 or 6 times there income. This means that a very high rate%, thetheir income. This makes the owners of new homes are particularly sensitive to changes in interest rates. ) For example, the recent increase in interest rates (November 8, the homeowners say an increase in their installment of the loan. It is likely that interest rates could rise further in the United Kingdom because of persistently high inflation of prices housing and debt level. However, this may lead many homeowners, especially first time buyers in danger of failing to keep up with payments by installments. And thenare in danger of his house recovered. Some say 50 years mortgages are bad because it means that you will pay mortgage payments when you retire. However, a mortgage in 50 years is much better than the alternative is not in a position to buy or keep with the mortgage payments.
1. First, it is important to remember that loans have become easier to repay, as long as you have a mortgage. This is because, apart from fluctuations in interest rates, interest ratesThe payments are fixed. Then increase until real wages. Mortgage payments will be a smaller% of income in the future. For example, a monthly mortgage of 700 €, it sounds a lot, but in 40 years, the true value of € 700 is much lower intake of moderate inflation and growth in real wages.
2. 50 years to get a mortgage means your monthly repayments to make a mortgage less any payments made easier.
3. The cost of renting a house is, however, increases with 'Inflation, or perhaps more inflation. This means that if continue to rent instead of getting a mortgage. Pensioner, the actual cost of the rental will be much higher than the cost of a mortgage.
4. There is an old saying that a price rent dead. This is true, with a mortgage, it is at least partly contributing to acquire wealth. The property is very important for the future, if you need to get a re-mortgage or a loan against the value of your home.
5. It istrue that the more you borrow the interest you pay more, but if you change your financial situation, and in 20 years, you should be able to mortgage to another company with which you pay for the transfer some of the parties.
Basically, then, despite rising real estate prices and property prices are growing much faster than real wage growth, is still appropriate, in order to buy a house and property on the scale, if possible. 50 years mortgage to make this possible for those struggling to cope withmonthly payments of mortgages on standards.
For more information: 50 years mortgage
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