Hard News: Make you crazy like datura
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the smaller option means a smaller mortgage, less stress, and more discretionary spending (i.e. holidays in vietnam). the banks are the enemy, but everyone seems to think they're your best friend...
Exactly what we did and you"re absolutely right, makes for a quality lifestyle, but this hasn't made the bank the enemy for us. The mortgage is affordable,the suburb is great (people in the street talk to each other) and the dog has a garden.Without the bank, our nterest would have been more. I still feel, if you make a decision to own, figure out what is in your budget. The nice thing about owning gives one security.(Am I getting old?)
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What I find strange is that whenever interest rates go up the media always portrays this as a bad thing. Yet there are more people living in their own mortgage-free homes than there are with mortgages.
Is it another case of the media people perversely believing that they themselves are typical ?
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on $200k pa you could easily pay off a $350k house, and save a huge sum of money in other investments. something beyond the abilities of the actual average couples income of <$90k.
Or save $50k/year for five years while renting and skip the bank altogether.
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Or save $50k/year for five years while renting and skip the bank altogether.
our combined income is a hang of a lot less than $200k. and we rent a not-cheap place in central wellington.
i worked out that with a reasonable degree of prudence we could actually save $120k in 5 years.
how? by banking the difference between the amount we pay for rent, and the amount we'd be paying to a bank if we had a $350k mortgage.
and they say rent money is wasted money...
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Is it another case of the media people perversely believing that they themselves are typical ?
No, it's just that bad news sells. So even good news has to be spun into bad. Higher interest rates also have a lot of winners via the higher dollar, but that news always has to focus on exporters. Which I find strange being an exporter myself, and having innoculated myself to currency movement by setting my prices in NZ dollars.
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by banking the difference between the amount we pay for rent, and the amount we'd be paying to a bank if we had a $350k mortgage.
You could, if, and only if, you have the fiscal toughness to do so. Many people find that very hard - expenses somehow accumulate to fill the income available. So one of the traditional arguments for buying a house is that it'll force you to build equity instead of frittering it away.
Having said that, renting + rigorous saving is exactly our strategy too.
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You could, if, and only if, you have the fiscal toughness
true. but if *have* to spend the money then locking yourself in a huge debt is bound to cause a reasonably high amount of stress...
so, "forcing yourself to build equity" equates to "being depressed because i'm unable to buy a new couch [that we don't actually need]". again with the kiwi crisis of expectations.
i think people think that "saving" means "never spending"?
to which i say, "fck that, we're off on holiday with 5% of our savings!! WOOT!!"
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There's a fantastic playground in Wanganui, of all places.
That's an amazing playground indeed... huge and grassy (the grassy part is distinctly un-Sydney like, what's Adelaide like?) Is the fact that I can't see sun-shade because it's seldom required (joke)?
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There's a fantastic playground in Wanganui, of all places.
Deborah, you've made my day. It's great to see that's still there. We used to go there when I was little and we lived in Taihape.
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If you can't pay a $500k mortgage out of $200k pa, you are managing your money very poorly, it seems to me.
Yes. Cambell Live last night had on some ChCh chap who had returned from 6 years teaching in Japan with a wife, child, and $40k for a deposit. He tried to buy a house for $275k but couldn't secure the finance, even with the bank including $120 a week from a presumed boarder (wink wink nudge nudge) if he bought the house.
I had to wonder what pathetic salary he was on that he couldn't manage it. Oh yes, and the other issue was that he'd done the right thing by paying off his $30k student loan. Silly boy, he should have let it run, since it's interest free. Then he might have double the deposit.
Olly Newland had it right when he commented that with Labour's proposed housing initiatives the chap will be even worse off because he won't qualify for that programme and yet someone who hasn't saved up a deposit will.
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I had to wonder what pathetic salary he was on that he couldn't manage it.
Banks will let you borrow, what... four times your wage before tax? That would mean he'd have to be earning about... $60,000 a year? (Assuming his wife didn't have a wage-earning job.) Is that a 'pathetic salary'?
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Is that a 'pathetic salary'?
That was my point. I wondering how 'pathetic' his salary was that he couldn't get mortgage finance for a $235k loan. Teachers aren't that badly paid anymore (__"Avalanche!!!"__) and the cost of living in ChCh is supposedly lower than Akl.
What kind of society are we living in that people on above average wages are still reliant on Government handouts ("Working for Families" et al) to live? This has long been a bug bear of mine, way before National jumped on it.
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was wondering
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It depends whether you consider them handouts or a more targeted form of tax relief. Not having children it doesn't help me much, but I can't say I'm against the concept.
Although to some extent it's a matter of semiotics, people's interpretation would depend, I guess, a lot on implimentation - is it a case of having to turn up to WINZ and fill in forms, and consequently feel like you're being interrogated and made to feel grateful to the govt for something you're completetly entitled to? Or is it just pop up as part of your tax filing, except you have to throw in a couple of birth certificates? (honest question, I wouldn't have a clue)
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I had to wonder what pathetic salary he was on that he couldn't manage it. Oh yes, and the other issue was that he'd done the right thing by paying off his $30k student loan. Silly boy, he should have let it run, since it's interest free. Then he might have double the deposit.
If he was overseas then he still gets charged interest, so it might have made sense at the time, though perhaps he wasn't thinking far enough ahead to when he came back to NZ.
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Or is it just pop up as part of your tax filing, except you have to throw in a couple of birth certificates? (honest question, I wouldn't have a clue)
It's largely the latter in my experience. Fill in a form, send in a birth certificate - voila. Though the processing time is very long - I missed out on about a month of money because... I dunno. It only starts when it starts, not when you give them the form, which seems silly to me.
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Although to some extent it's a matter of semiotics, people's interpretation would depend, I guess, a lot on implimentation - is it a case of having to turn up to WINZ and fill in forms, and consequently feel like you're being interrogated and made to feel grateful to the govt for something you're completetly entitled to? Or is it just pop up as part of your tax filing, except you have to throw in a couple of birth certificates? (honest question, I wouldn't have a clue)
As a perfectly happy 'welfare recipient' (though, gosh, thanks to the conservatives for seemingly being much more concerned about my mental anguish than my financial state) I can tell you it's all handled through the IRD, no need to deal with the charming and perfectly logical systems of WINZ at all.
Also, because Mr Chch man has the deposit, he won't be getting the Accommodation Supplement he otherwise would to help pay his rent.
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feel like you're being interrogated and made to feel grateful to the govt for something you're completetly entitled to?
You should try being sick on Sickness Benefit.
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Could "Mr ChCh man" perhaps, umm, "give" his $40k to, say, his parents, who of course informally loaned him this exact amount some years ago, and thereby improve his lot?
I think the formula for bank lending on homes is about 4x the annual income of the primary applicant + 1.5x the annual income of any secondary applicant? I remember those figures from a while back ... I'm sure someone out there could update us though.
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Further to that ... if ChCh dude had been overseas for 6 years (say, 2001-07) he would have been:
a) required to make repayments on his student loan. Can't remember the exact details but the IRD do "insist" you make certain minimum repayments if living abroad.
b) incurring interest on the loan the whole time
c) had no idea student loans would be made interest free (this was announced in about July 05?).
d) probably paid most, or all, of it off before mid-05 anyway.
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You should try being sick on Sickness Benefit.
I feel your pain.
No pun intended obviously. I tried to think of something else but "I strongly sypathise with your plight" sounds silly.
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is it a case of having to turn up to WINZ and fill in forms, and consequently feel like you're being interrogated and made to feel grateful to the govt for something you're completetly entitled to? Or is it just pop up as part of your tax filing,
I wonder if this explains the swing to National? There has been much musing over why people feel it's time for a change when actually the economy is going quite well and people don't really have much to complain about.
Maybe the middle classes (responsible for the bulk of the swing) just begrudge having to apply for their 'entitlements'. They may be entitled to those payments but they still can't help feeling a little bit like a 'beneficiary' when they do, and it rankles a little bit?
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IO:
[...] some ChCh chap who had returned from 6 years teaching in Japan with a wife, child, and $40k for a deposit
[...] I wondering how 'pathetic' his salary was that he couldn't get mortgage finance for a $235k loan. Teachers aren't that badly paid anymore[...]
There's a whole back story to this, I'm sure.
To be teaching in Japan for 6 years and only have $40k to show for it is a disaster. It almost certainly indicates he was teaching at a language school -- for which typical salaries are fairly close to subsistence level by urban Japanese standards -- rather than at a university. (Possibly the return to NZ at this time was occasioned by the collapse of the Nova language school.) It also suggests he may not be well qualified for teaching in NZ. Even the teaching experience thus gained won't be very relevant to NZ conditions, even in a Chch English language school, which would seem his most likely destination job. Which may explain why banks were less than enthusiastic. -
@linger. that all makes sense.
he probably didn't get the loan because he's on a $40k wage with 2 dependants. there's no way you could service a $235k mortgage on that kind of money.
the brother needs a 2nd job.
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That's an amazing playground indeed... huge and grassy (the grassy part is distinctly un-Sydney like, what's Adelaide like?) Is the fact that I can't see sun-shade because it's seldom required (joke)?
Adelaide playgrounds? Dull. Plenty of them, plenty of grass and shade, but the play equipment is just the usual metal climbing frames, and plastic twisty slides. Nothing approaching the mad joy of Kowhai Park. Having said that, there is a huge playground up at St Kilda, but we haven't made our way there yet - it's about 30 minutes drive away.
Sunshades on the wet west coast of the lower North Island? You've got to be joking!
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