Paying off an existing mortgage

Norman  quote:-   John did you not post that one of your sons was actively in business in BTL with your assistance at some stage????

No sorry Norman, think you are losing it.  In fact what is / who are  BTL

buy to let

Thanks,  Smiley

How many Johns' do we have on this thread...............
 

Norman

"I have only ever had one complaint and that was back in the UK when I left a water mark on a ladys cream coloured carpet from the soles of my shoes one very wet night "

Ha!

Smiley, if your client had 48 BTL properties with a 40% debt ratio how much did she owe?????? What happens when the property market takes a dive, you can't sell (or have to sell at a loss), the rental market becomes over-subscribed and rental incomes fall? Stress or what? Most people commit to finance, rarely planning for change in circumstance such as we are witnessing right now, so if there are turbulent times ahead doesn't it make sense to encourage folk with large mortgages (or considering same) to considerably downsize their debt in preparation for this, retain a cushion of monies (or ease of access to monies) to cover say a couple of years outgoings (at least), or to rent rather than buy?

ads - most of her portfolio is in or around London .... doubt there will be a fall off in demand in the burbs ......  first one she was very very nervous..... gradual reduction in nerves as experience was gained ........ she has most of the mortgages on repayment basis and she was a very good learner in what works and what doesnt ..... confidentiality means I could not tell you specifics even if I wanted to .... I stopped handling her business when I moved to Spain in 2003 but she used to keep me abreast the situation .... I guess if we all subscribed to your theory we would never cross the street for fear of being knocked down ..... life is full of "what ifs" ... some people will take a risk (albeit it calculated) and will end up winners .... others will get knocked over ..... I guess its whether we get up that is a measure of the man/woman ... she decided she needed to take responsibility for her own old age .... the bloody pension certainly wasnt going to do it ..... so far (up to 2009 to my knowledge and I am pretty certain things havent altered as I know the guy that took over where I left off) she is doing pretty well and I suspect will continue to do so

I do understand what you mean re the what ifs, it's just that when you're told a hurricane is approaching you presumably take protective action! Perhaps the forecaster is wrong? Oh for a crystal ball.

ads I believe a hurricane is approaching but I have believed it since 1999/2000 when far greater brains than mine were predicting the consequences ..... even in 2008 when people were saying this will last a couple of years and then happy days again I was lambasted as being a harbinger of doom ---- in fact in 2006 it was the final nail in my marriages coffin as I finally yielded to my ex-wifes insistence that we buy a F##K off villa here in spain in the vain hope I could finally do something to make her happy .... using not far short of a million quid that the previous year had generated 40% growth (07, 08 and 09 the product continued to do the same).

I believe we still have worse to come ....... but if what I believe is likely to happen actually transpires it wont matter where money is invested and in all probability real estate in the right place will be one of the best asset classes as its not something the bank can screw up for  you.

Dear All,

Given the catasrophe envisaged.......

the BTL lady + all others would only owe 40% which her income easily services.....so no problem for her

if all her tenants default............then she defaults or floods the market.......if all flood the market - no market

her default is to the banks which may repo and flood the market with both props' and sitting tenants who cannot pay

repos may flood the courts - no service

her banks may collapse under the pressure as they should have done before

given her success to date she may be well able to service debt from reserves - gold silver etc - she is clearly no fool

but who would benefit from her very low interest payments - no banks - where would the money go??????

I am afraid Ads that you are not taken advice seriously - even with the crystal ball there is too many what ifs - best not to go out today - it is dangerous out there.

Regards

Norman

Sorry to confuse Norman as my response "perhaps the forecaster is wrong" was tongue in cheek as I've been reseraching for quite some time now and all evidence to date (that I keep passing on) acquired from those supposedly in the know (including Smiley's observations) , sadly,  appear to confirm the approaching hurricane. I would love to be proved wrong however.

Smiley I too am confused how real estate with associated mortgages will be immune from the Bank "screwing it up for you". Perhaps you were referring to property that has no debt associated with it?

I was referring to bricks and mortar that had no debt attached to it ---- and even that which does. If one is in a position to choose when to sell (this assumes no financial hardship and also relates primarily to UK rather than Spain) then real estate in general has been one of the best asset classes since the war in terms of growth and security. All markets are cyclical and money invested in property is probably lower risk than money invested in stock markets as at least one has a tangible asset. As for gold......people that went long of bullion at  close to 1000 $ an ounce in 1980 were left to regret that decision for a long long time afterwards..... in fact for 28 years and that doesnt even allow for any indexation.

My real  point is that unless you put money under the mattress is that there is no cast iron guaranteed investment vehicle but real estate in general is probably the most secure as it is not simply a piece of paper or lump of metal and it takes place in a market that is relatively easy for most people to comprehend.

"it takes place in a market that is relatively easy for most people to comprehend. "

How true and how sad that it's now the exception rather than the rule to have a comprehension of financial dealings!

If Jo public knew to what extent the complexity within the financial industry hides a web of deceipt, corruption and hidden self interest, betting on the failure of the system to their own ends, a massive ponsi scheme to defraud, and how this lack of transparency appears to be impacting everyone's lives, they would be horrified.

The simpler the product and its transparency the better as far as I'm concerned.. IMHO, financial transparency, strict compliance and simplicity of application is the key to a fairer and more stable society. Whenever you see a complex arrangement (or a plethora of fine print) the warning bells should ring loud and clear, because the reality usually means that the complexity is hiding a hornet's nest! We've had enough of smoke and mirrors!!

This message was last edited by ads on 25/08/2012.

Dear All,

I am always amused when BTL'ers do their sums and claim they are only getting a small return since they are "investing" the whole property value in the deal.

when in fact they have only invested a deposit, plus costs and getting a huge rental return based on whole property value plus of course the capital growth again based on whole value.

Whereas the main investor "the widows' mites providing the mortgage" is getting a tiny return less inflation which probably makes the return negative but boosts the BTL'ers capital gain.

Doesn't seem fair somehow.

Regards

Norman