Do you think taking out a mortgage this year is a good idea?
In particular when considering buying real estate in London (flats, houses....).
Interested to hear what London dwellers think about the property market in the UK + UK public finances + UK growth prospects coupled with the prospects of a career in finance on this lovely island...
Where are you located and why London? Have you considered the foreclosure market in the US?
Recourse or non-recourse? And what is the interest rate?
Located in the UK, would get it there since i have credit history there.. i actually have a friend who is making $$ in the US with foreclosures but i cannot get any funds there since i have no CR...
so rates here depend but i could get something in the lines of 3.5% fixed 2 years and then a tracker...
i guess always a doubt re London real estate bubble...
Get it fixed for ten years. And make it non-recourse if you can. It's worth paying an extra 50 basis points to be able to walk away and wash your hands of it.
i guess the main question is what does one think about the real estate market in London, and whether to get a tracker mortgage or fixed+plus banks variable afterwards...
Definitely pay the premium for a fixed mortgage if you can afford it- or at least get a favorable interest rate cap.
When inflation starts to tick up, it's going to go up fast- and it's going to hit the rates market. The Bank of England is going to raise rates, and if you're in a fixed mortgage, you're looking at a ~ 1000/month payment on a 200K loan go up to 2000 if rates go from 3% up to 9%.
In the US, 15-year mortgages are ridiculously cheap. For those with good credit, you're looking at 3% for 15-year fixed, 3.8-4% for a 30-year fixed. At those rates, why would you ever get an ARM?
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