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  • Debt & Negative Equity

    When BTL goes wrong - no capital growth

    C&R gives control to the lender

    IO gives control  to me

    I can determine to save / invest  the difference between the two prices

    C&R is only for people who do not trust their spending habits and need a lender to do it for them

    10% overpayments are widely available as well .

    You say

    ``as a southern landlord you haven’t witnessed low growth rates``

    Not true  - I have witnessed low and indeed negative growth in 2008/9 /10

    Its nothing new to me or any investor world wide 

    And in any case any investor north or south worth their salt will plan for the possibility  of low growth  

    If they dont - they are making a fundamental basic error in their investment model


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    Jonathan Clarke. http://www.buytoletmk.com


    If this deal goes through I will set it up as intrest only and then make over payments as if it were a capital and repayment

    I like capital and repayment I can then add life  cover at low cost even at 60

    and I know in ten years time the mortgage will be aroun a third  lighter than it was at the start

    it’s payer me very well in the past this is a good deal and I think more will be around the corner as prices fall again in the NE which I feel is going to happen

    we have had a rally in the past 5 years but the prices are now around the 2007 price before the crash

    this property should have sold but it has not says a lot to me JC


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    If this deal goes through I will set it up as intrest only and then make over payments as if it were a capital and repayment

    That's exactly the reason to stick with interest only, so you can choose when to make the repayments on your terms rather than the lenders terms.

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    It’s the best way I agree

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    This is becoming a habit. I disagree. I believe in discipline. There is no value in repayment if you have the self control to not spend all your profit. There are a huge number of reasons why interest only is preferable. But the two best are:


    Tax

    Money in my pocket not the banks

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    Never plan for capital growth but I think to say the times of capital growth are over is entirely wrong. If you are sensible, interest only seems a solid plan.

    Don't buy cheap, buy good quality houses in desirable locations that offer respectable yields but have all the potential for further growth and if you invest in areas that look set to grow further like the North West in 5 years time I think you will have seen a decent rise at the time you come to renew.

    Of course do a yearly review and check how it's progressing but borrowing money has never been so cheap and it doesn't look like that will change any time soon. When it does change it will be a slow gradual increase that you can see coming and plan for.

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    I think your right good properties have demand

    but I don’t take capital growth for granted after the past 10 years

    it’s a very slow grind from here

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    "but I don’t take capital growth for granted after the past 10 years

    it’s a very slow grind from here"

    But what are the underlying reasons for there being no CG in your locale for thr last 10 years DL, and why was there CG before?

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    Lots of reasons Adam

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Such as?

    I really don't think a lot of new investors know the warning signs with areas they don't actually know.

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