- Status
room305 said:
I am aghast at that lack of knowledge considering the financial outlay and risk (what risk in buying property some might say!!) involved. He should hopefully thank you in time if you save him from a nasty surprise at the end of the interest-only term of his mortgage.
I know of similar of tales that make me fear for the general knowledge of people getting involved in property investment. I know of a someone who's followed a friend of theirs down the road of a second "investment" property purely on the basis that their friend was an accountant and how could an accountant be wrong about investing in property. Whilst I'm sure the accountant knows how to make the most of any tax breaks, etc. it does not make them financial gurus in all aspects. When did people lose the capacity to think for themselves?
W
walk2dewater
Guest
ivuernis said:
We may be a "rich" country but believe me, and I've lived and worked in several countries, collectively as a nation we don't think like people from rich countries. The average, middle-class Swiss or Canadian simply wouldn't fall for what going on here. We think more like Albanians with their famous get-rich pyramid schemes.
walk2dewater said:
Sure haven't we had pyramid schemes in Cork recently! I remember when pyramid schemes were ongoing during the 80's and even as a kid back then I was dumbfounded as to why people got involved. When it happened again recently I didn't know whether to laugh or cry.
It will be a very interesting autumn selling season when the ECB puts rates up. Speculators who've bought with an IO mortgage will find it very hard to offload these properties without a heavy price discount. It could become very expensive if they hold out for a better price in a falling market and with rising IO payments.
W
walk2dewater
Guest
redo said:
yeap.
But, and this occurred to me the other day, perhaps all that overhang of unrented property will come onto the market. Since capital appreciation is "guaranteed" and prices soft, IO holders may compensate for higher rates by renting out their currently unoccupied properties. Better to accept the burden of being a landlord and make €500/mth for that Dublin apartment, or €750/mth for the Kildare 3-bed. We may see collapsing rents. This is good cos my lease is up early Autumn
Perhaps I can extract another 5-10% off my (already cheap) rent.
P
phoenix_n
Guest
Like the saying, men are motivated by two emotions : Interest and Fear. Interest has spawned the property boom and fear will burst it.
whizzbang said:
This was in today's Independent:
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1649377&issue_id=14329
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1649377&issue_id=14329
G
Guest107
Guest
spanish investors hget hit
Todays Irish times, some 100,000 Irish who own property in Spain are being chased for local taxes (like rates) and a 'wealth tax' on top.
http://www.andalucia.com/law/wealthtax.htm
http://www.andalucia.com/property/propertytaxes.htm
Todays Irish times, some 100,000 Irish who own property in Spain are being chased for local taxes (like rates) and a 'wealth tax' on top.
http://www.andalucia.com/law/wealthtax.htm
http://www.andalucia.com/property/propertytaxes.htm
P
phoenix_n
Guest
M
miju
Guest
my guess is that it's the creaking of the last support columns of FTB's propping up the market about to give way
Wow that was a pretty scary anecdote about a specu-vestor not understanding the "reset" on his interest-only loan. I wonder how much the joe-soap-specu-vestors understand about their exotic mortgage products..
Here's a question about IO mortgages. Alot of speculation appears to be carried out using them. AFAIK most of them reset to being interest+capital after a period of e.g. 3-5 years. But what is there to stop speculators from switching mortgage providers each time the 'reset' is about to kick in..? (assuming they always have the cashflow to pay even v high interest rates). I'm unfamiliar with the smallprint of mortgages, so I don't know if they are somehow locked-in or pay hefty charges for transferring institutions.
Here's a question about IO mortgages. Alot of speculation appears to be carried out using them. AFAIK most of them reset to being interest+capital after a period of e.g. 3-5 years. But what is there to stop speculators from switching mortgage providers each time the 'reset' is about to kick in..? (assuming they always have the cashflow to pay even v high interest rates). I'm unfamiliar with the smallprint of mortgages, so I don't know if they are somehow locked-in or pay hefty charges for transferring institutions.
soma said:
Nothing AFAIK, although if the market value of the property drops below the loan amount then obviously they cannot borrow more than what the property is worth.
You'll find though, that once interest rates are high enough, the monthly savings that result from having long terms or repaying only the interest are greatly reduced.
N
Neffa
Guest
soma said:
AFAIK you can have IO for the term of the mortgage now - BoSI currently do that and I think others do too. In any event, you can certainly flip providers at no cost if you have a 3-year "introductory" IO term.
Z
z107
Guest
How does that work? - I thought with interest only mortgages, you're only paying off the interest, so you always owe the amount borrowed.
- Status