30 yr mortgage for one-off tax payment

Autumnleaf
My friends are not going off-season to lower-cost destinations. These are Dubai and New York shopping trips and three week two-destination holidays in Thailand.

I don't understand the defensive side to this. Maybe the FTBs aren't half as comfortable with it all as they seem to me.

Rebecca
 
When mortgage rates are 6% a la the US, we'll see how comfortable they are.
 
Well just think of them as the L'Oreal generation, after all 'they are worth it'!

I'm flabbergasted also by the money being spent by people just getting onto the property ladder, new kitchen, new car, plasmas, big holidays.... It's gotten so those purchases are 'normal' in the first year of a mortgage, mostly paid for using unsecured credit.

I would agree that no-one wants to make do any more, they want to move straight into the 'House and Homes' ideal abode...
I recall recycled tables, chairs, appliances... and I'm none the worse for it (I hope ;-)
 
liteweight said:
Can't remember what % tv was but I know it was too much so borrowed old set.

I am a landlord and wouldn't dream of supplying plasma tv (too expensive despite glut on market due to over production at mo).

Is the interest charged by them included in this holiday?
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The interest keeps building up. However the FTB has three months when they're neither paying morgage nor rent. So they can use this money to kit out the house.
 
Persius said:
The interest keeps building up. However the FTB has three months when they're neither paying morgage nor rent. So they can use this money to kit out the house.
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But the three months is added on to the terfm of the mortgage right?
 
Sure, you get the loan on day one and the bank starts charging interest. After day 90 (or perhaps 120 if at end of month) you start making your first payments. Whether the, say 30 year, term starts from day 1 or day 90 I don't know. It should be obvious to potential borrowers that you are paying for the privilege of a three month repayment holiday as the interest due is greater due to no repayments in the first three months. However I suspect some people think that they are getting a bargain from the bank.
 
I think a major problem is that people don’t know what they are getting from the bank, I don’t think anyone is told the difference in paying for a 35 year over a 25 year mortgage for example; they may understand that they will be paying more but not how much more. Nobody is looking at it beyond the monthly amount that they can pay back; the whole attitude towards money has changed. I had a difficult time trying to explain to one of my friends why she shouldn’t remortgage to pay off her debts, she couldn’t understand that even though she was paying less monthly she would be paying more because she would be paying for her holiday and nice clothes for 25 years.
 
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