Whoops that was me. I have broken my first new years resolution.
I agree, i will try not to be sarcastic if it is unhelpful going forward..please feel free to slap me if i digress.
Are the banks actually giving out money - IN MY CASE
- Thread starter qwerty08
- Start date
- Status
Whoops that was me. I have broken my first new years resolution.
I agree, i will try not to be sarcastic if it is unhelpful going forward..please feel free to slap me if i digress.
I had trouble securing a €180k mortgage on a 45k salary only a few years ago. Even with a monthly payment of €800 i did not find it a walk in the park and had to forgo a lot of nights out. i think you are mad to take on that amount of debt on such a low salary, if the banks will even listen to you. Take into account mortgage insurance, esb/gas bills, tv licence, building/contents insurance and also furnishing your home and you are looking at a lot more than 800 a month.
Im training with a big 4 firm as a chartered accountant/tax consultant
Really? It will be interesting what you will be like in about 20 years after many years in the top branch of the esteemed accountancy profession.
F
foghorn
Guest
If you only wanted to hear what you wanted to hear, why did you bother asking advice? If you want false reassurance, you're in the wrong place.
Therein lies the problem, the majority of posters firmly believe that the negative view on prices i.e they are still in freefall is the correct view and that purchasing a house is madness, just because you are now in the majority doesn't make you right. Did anyone here ask where or what type of property it is, it could be an absolute steal with serious chance for future appreciation, its not all a one way street. We shouldn't take a blanket approach to posts and each should be dealt with on merit. €800 per month sounds like a handy repayment and should he decide to let a room for even just €250pm it is easy still. If people don't speculate they can't reap the rewards. At the start of the boom there were plenty of people who accidently landed on their feet by buying property when it didn't seem like the best or easiest thing to do, that day will return again.
800 is a handy repayment if you are earning 60k.
If the original poster is a trainee accountant then I'm sure they have done their sums and created a spreadsheet with monthly outgoings on it something like this:
800 – Mortgage
320 – Food (80 per week = 11 euros a day includes lunches).
60 – ESB
50 – Gas
25 – NTL basic package
20 – Broadband
40 – Mobile
100 – Home insurance
20 – Bin charges
Total: 1435 euros per month..
Take home pay 2000 euros – 1435 = 565 per month left over = 130 euros a week for everything else – socialising, clothes, etc. If you were a smoker you'd only have 50 euros left for the week for pubs, restaurants, cinema, clothes, CDs, newspapers.
Doesn’t include: Travel costs, Landline, TV licence, savings for holidays, savings, socialising, off credit card bills.
It's just a big burden for a 26year old to take on, things like expensive holidays, future car purchases etc would all need to be borrowed for and repaid.
If the original poster is a trainee accountant then I'm sure they have done their sums and created a spreadsheet with monthly outgoings on it something like this:
800 – Mortgage
320 – Food (80 per week = 11 euros a day includes lunches).
60 – ESB
50 – Gas
25 – NTL basic package
20 – Broadband
40 – Mobile
100 – Home insurance
20 – Bin charges
Total: 1435 euros per month..
Take home pay 2000 euros – 1435 = 565 per month left over = 130 euros a week for everything else – socialising, clothes, etc. If you were a smoker you'd only have 50 euros left for the week for pubs, restaurants, cinema, clothes, CDs, newspapers.
Doesn’t include: Travel costs, Landline, TV licence, savings for holidays, savings, socialising, off credit card bills.
It's just a big burden for a 26year old to take on, things like expensive holidays, future car purchases etc would all need to be borrowed for and repaid.
The OP implied he was hoping to get rental income I believe and that the property may fetch 1000 euro a month. Though not guaranteed it would explain what he or she sees his/her projected finances to be.
No one has claimed that subscribing to any majority view makes them right. You are speculating that house prices will rise to the point where a property bought now would be a 'steal' and are basically advising the OP to 'speculate', to take risks and 'reap the rewards'. With all due respect, no one on an internet forum should advise anyone else to speculate. Leave that to hedge fund investors. The only people who should speculate are those who can afford to lose everything without losing a night's sleep. I.e. those rich enough to not be particularly bothered by their losses. You are effectively advising someone straight out of college to gamble. That is not the same thing as advising someone on the wisdom or otherwise of buying a home, or an investment.
To invest is a different animal entirely and the OP has not even said whether the property is to be an investment or a home. He never actually suggested that he wanted to speculate in the hope of rising property prices. To make an investment decision requires a hell of a lot more analysis than merely speculating on future house prices (which is banned on this site anyway) and therefore capital gains. Investment decisions made solely on the basis of capital gains are foolish decisions in the extreme. That is true regardless of your views on future house prices. Conflating the concept of investment with speculation is reckless.
You criticize other posters for having a negative view on prices and advising accordingly. They advised caution for more reasons than that as you will see if you read the posts. You are advising recklessly. Whether you are right or wrong about house prices does not change that.
The OP has a current income of 26k, and yes that is very low relative to his new mortgage outgoings, however if he's on a 3yr contract with a Big 4; as long as he passes his exams etc., that salary will jump upwards each of the next 3yrs until he qualifies. Even if they then dont renew his contract upon qualification, he should have sufficent savings from the last (better paying) year of contract to fund his repayments for several months whilst job hunting. Even then he will be in a strong position to get a relatively well paying job (particularly since he will have a strong CV with both recessionary and boom skills on it).
I think the OP brought some of the negative replies upon himself by omitting his exact job spec in his original post. Many of the replies would have been spot on had he been a general Finance grad, an QS grad etc... but he's in a relatively safe position.
Best of luck Querty08... im not far behind you; just finishing up last few months of college now and then starting a 3.5yr contract down the country with a Top 10. I hope to be in a similar situation to yourself in two years time (only thing is i'll be buying with someone who'll add another 20k+ to the income level and hope to have a decent deposit by then
... oh and of course prices are feck all down here in comparision to the cities )
I think the OP brought some of the negative replies upon himself by omitting his exact job spec in his original post. Many of the replies would have been spot on had he been a general Finance grad, an QS grad etc... but he's in a relatively safe position.
Best of luck Querty08... im not far behind you; just finishing up last few months of college now and then starting a 3.5yr contract down the country with a Top 10. I hope to be in a similar situation to yourself in two years time (only thing is i'll be buying with someone who'll add another 20k+ to the income level and hope to have a decent deposit by then
... oh and of course prices are feck all down here in comparision to the cities )
F
foghorn
Guest
Nowhere did I claim to be right because I'm in a majority; god knows I was long enough in the minority pointing out that the property bubble was merely that in the face of bulls like yourself who insisted it would go on forever.
He's on 26K, in a climate where any future salary changes are likely to be downwards. He's just out of college.
The property is 200K - 8 times his current salary.
It's already a multi-generational mortgage; his parent are helping him out.
Sorry, but all that sets off alarm bells in my head. But you're right, he could be the next Liz O'Kane. Oh wait, she can't sell her house either; bad example.
Prices will never go down. Safe as houses. Sure, rent is dead money. Over the moon and sick as a parrot. Oops, sorry, my cliché generator got a glitch there.
Wow, we're already at the start of the next boom, are we? Are you Brian Cowen's financial advisor, by any chance?
Accountants are not immune from recessions. Accountants get paid by clients. When clients have no money, accountants don't get paid. When the overall level of activity in an economy falls, the demand for accountants fall. Accountants are needed for commercial transactions, taxation etc. The number of commercial transactions, property transactions, M & A etc. has fallen off a cliff. Your position is better than that of conveyancing and commercial solicitors, but it is analogous.
As for the notion that insolvency is a safe area, in the US and UK we have started to see a relatively new phenomenon for a recession - businesses that deal with insolvencies going out of business. If debtors can't pay then no one gets paid. It's like in family law, if the family home can't be sold and neither party has much money, the solicitor doesn't get paid. You can't get blood from a stone. Analyze where your salary comes from, exactly, before pronouncing any line of work secure. Never assume that the future will be the same as the past. Just because a profession was relatively secure in previous recessions does not guarantee it will be in this one.
CGorman, you are assuming that a qualified accountant would find work within 'several months' of qualifying. Assumptions are extremely dangerous things. Making major financial decisions based on flawed ones is even more dangerous. As an accountant you must know how important analyzing your assumptions is.
Sorry Foghorn, you're wrong here. Whilst he has'nt stated this; as part of the OP's 3yr contract, his salary WILL rise this year, next year, and the following year subject to him passing exams. Indeed he might see €10k+ added over the three years. This will happen, there is no argument about it. And after those three years he'll be a fully qualified Accountant and Tax Consultant. Last time I checked a new QA earns over €55kpa+ in the Big 4. Even if this were to fall significantly to say €45k; the OP will still have seen his income nearly double in the three years due to his improved qualification.
Reality is often a hard thing to swallow. Pride is an even harder one. Yes prices are falling and for most people the OP's actions would be grossly reckless - but he seems to have thought this through, so has the bank and he seems to be going through with it irrespective of peoples views. Significantly he is not buying out of fear like those in the boom; he is buying because its where he wants to live and he feels it is a good deal for the lifestyle he wants.
RE Mallow Comments:
Of course Accountancy is not immune to the recession - there have been job losses in Big 4 and smaller firms both here and in the UK. However the OP is (apparently) specialising in the Corporate Restructuring side of accountancy. This is an area that is not only doing well, but actually booming at present. Maybe if the OP was working in Corporate Finance my comments would have been much more reserved - but given the fact that he is working in an area that actually benefits from a recession - I think he is a very good position relative to others.
Thanks for that, was trying to reply to a few comments there but this thread seems to be filling up quickly, nothing like a housing discussion to get people riled up here.
On the comment from the guy who was on 26,000 coming out of college 20 years ago, would love to know who you were working for!!!!!!!!!
i would be inclined to agree with you on the 3 year contract front, I have to sit one set of exams in may and already been told if i get them I'm looking at 32k from Sept.
While i realise im in no way immune from whats going on around me, im confident that im ok...trust me i know what its like out there (half my job lately is liasing with companies and employees about redundancies)
Bottom line i love the house and hope i get it, last time a house even came up on this road i was in primary school
Idea would be to rent out 2 rooms for a while before seeing myself in it long term.
I just think im in a unique situation in that:
* prices are still going downward (something which i factored into my bid)
*Interest rates are historically low
*I'm as sure as i can be that i'm secure in my job and have earnings growth
*Interest relief in the budget went up a nice bit
*I know if i fall flat on my face, I have family around me who would be willing to make sure im ok
On the comment from the guy who was on 26,000 coming out of college 20 years ago, would love to know who you were working for!!!!!!!!!
i would be inclined to agree with you on the 3 year contract front, I have to sit one set of exams in may and already been told if i get them I'm looking at 32k from Sept.
While i realise im in no way immune from whats going on around me, im confident that im ok...trust me i know what its like out there (half my job lately is liasing with companies and employees about redundancies)
Bottom line i love the house and hope i get it, last time a house even came up on this road i was in primary school
Idea would be to rent out 2 rooms for a while before seeing myself in it long term.
I just think im in a unique situation in that:
* prices are still going downward (something which i factored into my bid)
*Interest rates are historically low
*I'm as sure as i can be that i'm secure in my job and have earnings growth
*Interest relief in the budget went up a nice bit
*I know if i fall flat on my face, I have family around me who would be willing to make sure im ok
You are extrapolating from the present and past position of those working in corporate restructuring to the future position. Building was booming 3 years ago. That told you nothing about future prospects in that industry.
You are again assuming that corporate restructuring will continue to benefit from this recession as it has before. If it does continue to benefit, you are also assuming that it will benefit to an extent which will be sufficient to employ the OP and at the salary he expects for the remainder of the term of his mortgage. Untested assumptions all.
The area/house appeals to you greatly. You also need to ask yourself is that house worth X to me even if in some years I may not get X for it if I were to sell it. It sounds like (making an assumption) that for you the answer is yes. While something may not be a sound financial investment it may be a sound personal investment. Under those circumstances and based on the fact that you do have family that could help I would say go for it and enjoy it.
I was pointing out that the property could be bought at a great price and it was the OP who described it as a steal. The OP is looking for a home and is obviously ambitious so will no doubt in time hope to make gains from his first purchase, I'm saying he won't make gains if he doesn't purchase, I'm not saying he won't be taking a risk either.
Why not? People have no problem in advising people to sit tight when they no little or nothing about the property or circumstance.
The OP is looking to buy a home straight out of college, I don't see it as a gamble its a straight forward decision, buy or not.
Thanks Mallow, I've actually read quite a few posts before forming my opinions, I don't criticise people for having a negative view, I criticise those who don't allow for positives in any form. There is no 100% take on the market because as I'm sure you are aware there are bargains to be found and prices are different all over the country so it is not possible to take a blanket approach to the property market. If I am right how does my advice appear reckless?
Point me in the direction of my quote(s) that suggested that that property prices were to rise forever.
Nobody is disagreeing with the fact that prices have come down and are still going down, I've never described rent as dead money, maybe your one dimensional attitude to the property market is colouring your thought process, its time to move on.
Ya, that's exactly what I said you, you broke the code well done.
- Status