Apparently the youngsters resent the boomers because they have been able to get a cash rich retirement by cashing in the equity in their houses and thus are now spending their kids inheritance.
Furthermore, they resent the fact that we had a house price boom and they haven't got one of their own.
Well, I'm here to set them straight.
Let's compare 1965 with 2005 with regard to buying your own home :
1965 : There are a limitted number of building societies who lend mortgages in order to buy a home
2005 : There are hundred of lenders. It's a competitive market.
1965 : Don't even think of asking for a mortgage unless you have been saving with this society for 2 years
2005 : How much do you want?
1965 : Have you saved at least a 10% deposit?
2005 : Would you like a 110% mortgage or perhaps something larger?
1965 : How much do you earn? How much does your partner earn?
2005 : Please fill in the self certification form.
1965 : This is the rate you pay
2005 : Who is offering the best deal?
1965 : It is generally accepted that married couples will need two incomes to afford to buy a house
2005 : Single people regard the right to own a home as an inalienable human right!
1965 : I can't afford a house here, so I'll have to move further out to a cheaper area
2005 : I should have a right to buy a house in my home town!!
Now I am the first to admit that since the credit crunch, things have got tougher. But just think about it - it's still easier than it was in our day to get a mortgage BUT why the hell do you think that you have a right to be able to buy a home were you have always lived without sufficient income to cover the mortgage and without having to save a deposit?? Get fucking real, will you?!?
Here's the reason we have managed to build up the retirement fund that you resent us having - it's because we didn't use our homes as a cash point machine. Let's illustrate this with a simple example :
You buy a house for £200,000 on a 120% mortgage of £240,000
You spend the £40,000 surplus on supplementing your income, buying a new car, eating out every night, buying designer clobber and going on holiday
After 2 years, the house value has risen to £240,000, so you remortgage at £280,000 and use the surplus £40,000 etc,etc.
After another 2 years, your house is worth £280,000, so you remortgage etc, etc.
And that, in a nutshell, is why you will never be able to do what we did. You cannot accumulate equity in your home if you are continually remortgaging and spending it to subsidise your lifestyle. You can't have the money AND spend it...
We never had that option and whilst house prices are depressed, neither do you. Which is why some of you are in the financial shit - so listen and learn, get a grip on reality and stop wingeing about us!
0 comments:
Post a Comment