Alan2005

To a certain extent, you are preaching to the choir. Though my view is not quite that black and white.

pgtips

Too late for me, I am already too many years into the mortgage.
However I no longer use credit cards or take loans out. If I do not have the cash in the bank I do without. I don't drive the latest cars, but my cars are debt free.

Almost Canadian

So what`s the issue then?

If you knew then what you know now, would you have rented instead of buying?

R I C H

I don't understand this.

You can always make a decision to pay it off more quickly, sell up and start renting, or change your lifestyle/career to enable different choices. Why's it too late?

pgtips

Because I have been to conditioned like the rest. You have me stumped here.
If I sell up now, then I would have to rent and because I have put so much into the house it would not make sense to pay more in rent than I am paying on mortgage. To be honest RICH I could sell up and lead a debt free life in the Caribbean or downgrade in the UK, I have already got this penned in my contingency plans.

Alan2005

Personally I kind of agree with him. People have been suckered with real estate, which has been inflated with the sole purpose of allowing banks to sell debt. This was, and still is, the entire reason for the problems in the world economy which has yet to finish playing out.

On an individual basis though, if you aren't lucky enough to have loads of cash, using debt rather than cash to buy a house is the rational thing to do as both governments and banks will always choose theft rather than work to repay debts.

R I C H

So debt can be a good thing, and save you money

R I C H

I had a huge mortgage and lots of business related debt until last fall, when I sold up. It was all a means to an end to gain long term financial security and be able to be debt free. Having a strategy and managing debt responsibly and effectively means staying in control of it and not letting it control you.

Almost Canadian

But the individual is the one that makes the choice. If they are happy to drive a beat up old car, don`t require a 2500 sq ft house with air con, happy to forego numerous trips to different countries each year, there is no need to be in debt. They can`t have all the trappings without the means to pay for them and then complain about debt.

If people are stupid enough to believe that their lives will only be happy if they keep up with next door and believe all the marketing hype, there`s not a huge amount anyone can do for them. Personal responsibility and all that.

pgtips

To be honest, I still would have bought because prices were much cheaper then. Knowing what I know now, I would not put any additional borrowings on the house. I would have avoided getting into credit card debt, and be very careful what I would take loans out for.

So to answer I would buy the house as long as it was not costing no more than a 1/3rd of my disposable income, so I could save a decent amount. However I would have avoided the rest of the debt like the plague.

vettemaster

There is nothing wrong with credit if you use it wisely. I would have love to have bought my house for cash but having 200k in the bank was an issue

pgtips

RICH you seem like the kind of guy who could offer me a lot of guidance.
It also takes a lot of courage to do something new. I am sort of stuck in my comfort zone at the moment. Paralyzed by fear of the unknown.

.

Alan2005

I do agree with you. My annoyance only starts when my savings are stolen and my taxes are used to bail out idiots who've failed to understand this concept.

pgtips

In the UK it is only the fat cat banks and finance companies that have been bailed out. The individual borrowers have been left to fend for themselves, often losing everything. They build you up, but fail to make a few repayments and they are quick to blow you down. I love the way how they are all smiles and welcoming to get you to sign on the dotted line, but when you can't make a few repayments for all sorts of reasons, their initial friendly smiles turn to threatning letters.

Chookie

OP - we waited 2 years before buying a house for a couple of reasons:

1. we wanted to make sure we were going to stay

2. I couldn't face the idea of moving until that point!

We were lucky in that we had a pretty decent downpayment (about 25% of the cost of the house we were buying), and by that time, DH had almost 2 years of work with the same company under his belt, plus we had had time to build up a decent credit history, so for us, getting a mortgage was not a problem.

as others have said, cellphone contracts, paying your bills on time, plus getting a store/credit card, using it and paying it off each month (means you are not building up debt but it is showing regular use and payments) all help towards your credit history. When we were applying for a mortgage, we were told it was better for your credit history to have the creditcard, and to actually be using it than to have one that was never used.. it is those regular payments that are important.