£140,000 Availabe In Unsecured Credit !

[geevlus]

Hi gang, fairly new around these parts, as so many banksmarts,booksmarts,streetsmarts on the forum I'm sure financial advice would be extremley varied and interesting, here goes.

I'm in my twenties, living in the UK with my Thai girl. We were living with my mum, which didn't work out - whilst at my mums house I entered my name on the local housing register and after a few months was offered a flat, there is some stigma around this kind of housing in the UK, but the property is in a not bad area and I've made it quite presentable, current local housing (south of England) is being sold for silly money and I'd not have a chance in hel_l, until.........

The local authority have offered to sell me the flat for £49,000 (British pounds). The flat next door has just sold for £95,000 - Effectivley DOUBLE the price - Now I'm tied in for 5 years so if my intentions were to proceed and if I wanted to, I couldn't sell it until then, although I can, with permission rent it out, If feel it would rent for approx £450 per month.

Now the thought of a mortgage really freaks me out so I went on to moneysupermarket.com and made some hypethetical unsecured loan applications and staggeringly 5 different financial providers offered me £25000 a piece and 1 company offered me £15000 - That's a total of £140,000. Iv'e worked it out and it would take 7 years to pay back the money @ £2500 per month.

I've got a crap office job and my girls job is not much better, certainly not enough to make the above repayments. We would also both love to live in Thailand. Even if I just borrowed the 140 k - How for example could I get that money/capital to create the £2500 monthly repayments? Then after 7 years I would have £14000 - a nice sum to look forward too! These are vast sums of money - There must be oppurtunity here, one shot at life. I'd be willing to pay somebody a fee if they could give me the info which could essentially lead to my semi - financial freedom (please don't pm me though just reply on the board), and out of the rat race, even if just partially. This should make an interesting talking point..........

[kayo]

Hmm... Easy Money, Tears does Bring.

[lannarebirth]

I don't understand why you need to borrow more than the cost of the dwelling. What would the monthly payment be for the home? Can you afford it?

[Thaicoon]

Take the money and run....

[malcolminthemiddle]

How much is the rent and how do you calculate the 14,000?

Edited November 16, 2006 by malcolminthemiddle

[Mr Jones]

£140,000. The finance companies will hunt you down and you will go too jail.

On the application forms you have to state a reason for the loan, if you state you are skipping the country that will be okay, otherwise it is fraud.

On top of that your girlfriend will probably go down for conspiracy.

Do you really think they will all just give you money? They will all do credit checks and little red flags will pop up when lots of credit inquires are made, you may just get a refusal on a loan, you may get your collar felt for conspiracy to defraud.

You pay your money, you take your chance.

[BrissyBoy]

<deleted>???

I can't figure out where you get the figure of 140,000 in unsecured loans. The bank aint going to lend it if you can't pay it back.

Now some math

Value of property 49,000

Interest rate 6.5%

Deposit 0

Rapayments Monthly over 25 years

This will give you repayments of 331 per month

Rent 450

So you would be ahead by 119 per month less any expenses.

But i would be check with local agents as to the real value of the property and their rental value.

You will probably need some deposit so these figures may change.

Hope this helps

[GuestHouse]

You have the chance to get a 95K house for about half its value, but that's not good enough, you want to borrow more so you can finance your life in Thailand.

My advice.

1. Get a mortgage for 49K and buy the house.

2. Get your head down and:

a) get some more education/training so you can get a better job

work harder at the job you have now to get a better job

c) encourage your g/f to do the same

3. Start saving for your pension

4. Buy yourself a life insurance for as much as you can reasonably afford (in your twenties it wil cost you pennies, in your thirties/forties/fifties you'll be glad you've got insurance to look after those who depend on you if you kick the bucket).

What's Wrong With Your Current Plan?

1. You would be committing Fraud

2. You demonstrably have no idea about how money works

3. Any money you take to Thailand will be eased from your child like grasp, with you smiling as you hand it over.

4. The fraud charges waiting for you back home will prevent you from returning

5. When the money has gone (as it will be gone) you'll learn the meaning of "No Money No Honey"

What's Right With My Plan

1. It is making the best of the advantages you have or are being handed on a plate.

2. It will give you time to develop (read grow up)

3. It will give you both time to find out if you can work together when the going is not easy

4. It will provide you with assets, an education, career, respect - a life

5. It will probably save you from doing a Pattaya Roof Top Dive, when all five failings of your own plan come to fruit.

Then after 7 years I would have £14000 - a nice sum to look forward too!

Falls of chair laughing.

Fock, I wish someone had given me half a house when I was in my twenties.

Someone did give me the advice I'm giving you, and that has served me very well or at least I've reached my forties with a certain degree of hapiness and contentment.

That plan of yours would give you about two good years.

Edited November 16, 2006 by GuestHouse

[samran]

Hmm... Easy Money, Tears does Bring.

look at all his previous posts....all about getting something for doing relatively little.

In my experience, some people just can't be told.

[smartecosse]

What's Wrong With Your Current Plan?

1. You would be committing Fraud

2. You demonstrably have no idea about how money works

3. Any money you take to Thailand will be eased from your child like grasp, with you smiling as you hand it over.

4. The fraud charges waiting for you back home will prevent you from returning

5. When the money has gone (as it will be gone) you'll learn the meaning of "No Money No Honey"

[Neeranam]

Give the guy a break. He asked a reasonable question.

My brother borrowed heaps of cash when he was a young bank clerk - now he owns one house worth 1 million pounds, and about 10 apartments(flats). He also continues to borrow and rent out flats.

Go for it, I regret not doing that when I was 20.

[naka]

Give the guy a break. He asked a reasonable question.

My brother borrowed heaps of cash when he was a young bank clerk - now he owns one house worth 1 million pounds, and about 10 apartments(flats). He also continues to borrow and rent out flats.

Go for it, I regret not doing that when I was 20.

Neeranam.

Methinks your brother was perhaps a tad smarter.

Naka.

[bendix]

Neeranam . . . i think the difference between your brother and the OP is that your brother presumably borrowed money to buy investment properties - there's nothing wrong with leveraging investments. It's the smart thing to do.

But the OP wants to borrow money to fund a life in Thailand. Hardly a wise course of action, I think. If you can't afford to be here, dont come here.

[younghusband]

Give the guy a break. He asked a reasonable question.

My brother borrowed heaps of cash when he was a young bank clerk - now he owns one house worth 1 million pounds, and about 10 apartments(flats). He also continues to borrow and rent out flats.

Go for it, I regret not doing that when I was 20.

Nonsense.It's not a reasonable question and I wouldn't rule out a troll.If not a troll, internal evidence suggests a child like naivety on matters financial..

Having said that it's been quite good advice for some time in UK housing to borrow as much as possible (and a little more until it hurts) through a legitimate mortgage provider.Your brother sounds as if he has good business acumen.Whether this advice is good for the future is anyone's guess as the estimates on growth vary so wildly.I think cental London will continue to do well, but not so sure elsewhere.The Nationwide expects 7% growth in 2007.The FSA has on the other hand recently required banks to stress test for a fall in value of 40%.Clearly there are some bubble elements in the UK market but so far no real signs of a crash.

Incidentally what a brilliant post by Guesthouse.

[naka]

How for example could I get that money/capital to create the £2500 monthly repayments?

How, oh How ?

I'd be willing to pay somebody a fee if they could give me the info which could essentially lead to my semi - financial freedom.

No doubt you would !.

Sorry to burst your bubble, but 140,000 will not give you semi - financial freedom at your age.

Naka.

[geevlus]

Thanks for the advice so far guys......Especially Guesthouse. Now I'm sorry if I lead anybody to believe that my intentions were in anyway fraudulant - I may be a bit naive about financial matters but I wouldn't EVER dream of taking the money and running. I was just stating how much credit I'm potentially elidgable for and how this capital could potentially be used to generate its own repayments - All hypethetical I've not borrowed the money yet and wouldn't unless I had some idea as to how I could pay it back legitimitly. Mentioned the flat in the equasion and my dream to live in Thailand just to highlight my situation. Again, Thankyou Guesthouse for the advice, I will take heed!

[malcolminthemiddle]

You could sell the option now to buy the flat in 5 years?

[geevlus]

sorry I don't understand

[JimsKnight]

Well I'd listen to Guesthouses words of wisdom Geevus!

I've met falang living on the fringe in Thailand who have big debts waiting for them back home. They all set off with 50k, 100k which was borrowed from the bank / financial lenders etc. All of them now are on the bones of their arse scrounging for money and scamming like sewer monkeys! A majority of them are Brits, as a brit myself its shameful to see this.

Without a savings plan back home feeding them investments (as the banks have seized their assets) they have no income, the amount of spongers and temptations there are for someone with that amount of money is unbelievable.

Also your wife may suddenly attempt to fly the nest and disappear with a chunk of the money!

Skint falang returns home...

You won't go to Jail as there is (at least in the UK) no such thing as a debtors prison, lending money is a essentially a private matter, forms stating fraud charges will be levied yeah ok maybe, your unlikely to be arrested and do hard time.

Although you'll probably have to be declared Bankrupt on return (no bank account / credit card for five years, cannot own property for five years etc)

The disturbing thing is that the money is probably being loaned to you on the strength of your mothers property and that will be under threat if you do a runner!

Listen to Guesthouse and get your head down and work hard until you're in your thirties and review the plan, its not pleasant but once you've attained early retirement you can hold your head up high and feel glad you didn't listen to the wild notions of dodgyness.

Edited November 17, 2006 by JimsKnight

[kdvsn]

Thanks for the advice so far guys......Especially Guesthouse. Now I'm sorry if I lead anybody to believe that my intentions were in anyway fraudulant - I may be a bit naive about financial matters but I wouldn't EVER dream of taking the money and running. I was just stating how much credit I'm potentially elidgable for and how this capital could potentially be used to generate its own repayments - All hypethetical I've not borrowed the money yet and wouldn't unless I had some idea as to how I could pay it back legitimitly. Mentioned the flat in the equasion and my dream to live in Thailand just to highlight my situation. Again, Thankyou Guesthouse for the advice, I will take heed!

If you're looking the get generate £2500 in monthly income for a number of years out of a lump sum of £140,000 and still have £140,000 in principle at the end of those years, then you would need to invest the £140,000 in something that would return about 21% annually. You could get lucky and make that much, but you won't get a "guarantee" of 21% without taking on a lot of risk. An example of a risky investment that would yield 21% is lending money to people who run up balances on credit cards and unsecured credit lines.

Edited November 17, 2006 by kdvsn

[Jim's_a_Thai_Fox]

Hi there,

here's another view:

Get a mortgage on the property, you may 'freak out', but it really isn't a major deal. A 49k mortgage, even if it were a 100% (i.e. no deposit) with your old dear's house as collateral would be easily paid for by either:

a) renting the place out (if in a university town in southern England, should be a doddle - check with estate agents as to how much you can get realistically get each month) and come to Thailand now. Move up north, where life is lovely, get a job teaching English and happily live the next 5 years on a working visa. you can live on 20,000baht a month very nicely indeed. If your missus skips out, you don't need to be married in order to stay. Then, after 5 years of living here, sell your gaff and supplement your income with the money you make from your investments in the profit from the house sale.

or

by you continuing to live in the UK with your missus for five years and paying the mortgage out of your salaries. You have 5 years of grief and <deleted> food, then sell the pad for a nice profit and come to Thailand, teaching a bit, relaxing a lot and supplementing your income with your investments.

I know a few young thirty year olds who work here (Thailand) and have about 50k nest egg invested here (cashed in on their house sales) which nets them about another 10k bhat per month, cash in interest.

Depends where you want to spend the next five years of your life and what you want to do with your life I suppose.

If you decide to get the 140,000 (personally, I wouldn't) you'd have to do well to earn the 2500 per month to pay it back. You could try Zopa.com, a UK peer to peer lending site, but even there, the 21% APR needed would be a stretch. You could invest it in property, as per Neeranam's brother, but to be honest, you don't like that sort of character.

So, my advice, get a mortgage. In five years you'll have made 50k extra, at least. You live in the south, so selling shouldn't be too much of an issue... The question I'd ask is where will you decide to spend the next five years awaiting your investment to mature? If you hate the prospect of teaching, that really narrows down your options down in Thailand - but I did it for 2.5 years with no experience, and it's a good crack.

Don't worry about the cynical responses (especially pertaining to the gf!) - they mean well. they simply know this country isn't all 'smiles and wai's' and they've seen many dreams go up in smoke. You have a great opportunity to make 50k for virtually free, choke dee.

James

[roamer]

I find it really surprising that there shold be such a huge differential in the price being offered to you and the apparent value of the flat. I believe current legislation limits discounts to about £6k to current tenants, certainly no more for such a short tenure, and its hard to see how such a discrepancy would pass the council auditors.

And in the wake of the "homes for votes" scandal that had Westminster council penalised for millions and the then Leader of the Council Dame Shirly Porter permanently exiled to Israel to avoid prosecution....they are pretty hard on their prices these days. To be honest, the situation you are describing has a hole in it, a rather cavernous one.

So if the council aren't jerrymandering, and I can't believe they would dare, there could be other reasons for the low price....like the impending repairs to roof/elevators/windows etc that you will pick up the bill for. All councils nationwide are obliged under govt, legislation to bring its housing stock up to certain standards within the next couple of years. Much publicity in London at least for buyers of council properties being handed bills for £15/20K for replacing windows, a job that would have been unlikely to cost more than £2k if done privately. A friend of mine just got his share of a bill for for 4 road humps that had been placced in his small estate, cost the tenants nothing, cost him £800, turned out the humps cost £9K apeice!

From a BBC website, google buying council property,

"The other main consideration when buying this type of property is a statutory notice of intention to carry out work, specifically major refurbishments of the block.

It is not uncommon to see bills upward of £20,000 for work.

One example I recently saw was a guy who bought for £65,000 and, within 5 months, had been asked for £23,000 towards a new roof, new double glazing and concrete repairs.

As a major incentive for buying this type of property is the low cost, being asked to find a further 35% so soon after is a real kick in the teeth.

Therefore, the general state of the building needs to be a major consideration before you buy."

I'll concede the maximun discounts that I mentioned above apply in London and maybe not where you are. However I still think the reason for the discount might lie in the facts above.

Buying this property may make your dream of living in Thailand even more unattainable. If it sounds too good to be true it usually is.

[englishoak]

As roamer just stated if the deal seems "too good to be true" It probably is. Whats the groundrent, owner responsibilities etc etc ? Take a good hard look before purchase.

In principal it sounds like a great idea to purchase and forget about it as a retirement plan, for the next 5 years at least. By then the price will possibly be in excess of £150,000.

Once you have it you can look at other options to change your lifestyle.