Monday, March 9, 2009

Why pay €10,000 a year in rent...that could be coming off your mortgage?

We had a great seminar last Thursday night at the Park Hotel, Clonmel.
About 50 people attended. I would estimate there were 10-12 parties interested in a purchase soon.
Claire McCarthy of Binchy Solicitors spoke on the legal process involved in the purchase of a home.
John Butler of Friends First spoke on Life Cover, Mortgage Protection, Critical Illness and Income Protection, one which is becoming more important in these uncertain times.
Frances O’Hanlon of FOH Mortgages spoke of the various types of mortgages that are available. She said that sadly, Tracker Mortgages were no longer available, but that for the moment she would have to recommend variable. With falling interest rates, this seems the most sensible current option.
I spoke about how it is now much cheaper to buy than to rent. A combination of falling interest rates and falling house prices have combined to make monthly repayments on house purchase cheaper than it has been for years. Most homes can now be bought with mortgage repayments (over 30 years) for approximately €200 per month less than the cost of renting the same house! You could sum up my presentation in one line:

Why pay €10,000 a year in rent...that could be coming off your mortgage?

A great Q&A session took place afterwards, with many questions of a legal nature for Claire. Eventually talk came round to the market and my forecast for it. Lots of buyers are fearful that if they buy now, prices will continue to fall and they will “lose money.”
I do not have a crystal ball, and if I did, would not know how to use it!
What I do know is that you buy your first home as just that, a home, not an investment.
Most people will pay a mortgage for 30 years of their life.
Why not start that process as soon as you are able?
Why pay €10,000 a year in rent...that could be coming off your mortgage?

Sure, house prices may fall...they may rise, who knows? But you need a home. You will be paying for it any way. Why not start now?
Why pay €10,000 a year in rent...that could be coming off your mortgage?

People who bought two years ago are facing a drop in value in their home, but they do not have less cash.
If prices fall, your “loss” will only crystallise if you sell.
If you sell your home, you will probably be selling to buy another one.
Logically, that will have reduced by the same amount in percentage terms.
So the sum will be the same.
What you “lose” in selling, you “gain back” in buying.
Why pay €10,000 a year in rent...that could be coming off your mortgage?

Prices are at 2002-2003 levels.
Interest rates are at unprecedented levels.
You can get insurance to protect your mortgage payments on an average house (in the event of unemployment) for €40 per month.
Why pay €10,000 a year in rent...that could be coming off your mortgage?

At the risk of sounding repetitive!
Why pay €10,000 a year in rent...that could be coming off your mortgage?
Think about it...today.
www.pfq.ie

1 comment:

  1. HiPat,great seminar.Learned a lot.Am meeting you Tuesday to see houses.Hope you can look after me! Sarah.

    ReplyDelete