Ask a stupid question….

[air_raid]

Yes yes yes, megathreads. But hear me out.

As a collective people, dare I say community, we know everything. Literally, everything there is to know about topics as diverse as professional wrestling, Bond films, crisps, the 1991-92 Sheffield Wednesday squad, which film your favourite actress showed her norks in, and every conceivable way of using a toilet. We are the font of all knowledge, an Encyclopaedia Shittanica if you will. 

In that spirit, I’d like to create a safe space where you can fill any gaps in your personal knowledge by asking any question that’s plagued you, but that you’ve been too afraid to ask friends, family or your colleagues at McColls for fear of outing yourself as a buffoon, or that you don’t want to put into search engines in case of their AI learning your weaknesses. You can ask that question freely here, without fear of ridicule. Think of this thread as the curious, mawkish-but-still-kind-of-cute little sister to the sexier but my gosh don’t you just know it TIL thread. Share what you wish you knew, that everyone else seems to, but you don’t, i.e. maybe you’ve forever seen pretentious twerps like me use “i.e.” without knowing it’s Latin “Id est” simply meaning “it is” - you can ask that here without having to wait for big sister to sashay in and share it of her own volition.

I’ll start, since I don’t expect anyone else to want to be the first to put their head above the parapet. Why exactly is it whenever I see anyone on telly that’s purportedly doing well in property, do they like to brag about (e.g.) “My portfolio is worth £10 million”? Surely if you’re in sales, telling people how much unsold inventory you have isn’t something really to brag about? Explain.

And yours?

n.b. Fear some ridicule.

Edited March 21 by air_raid
Species.

[MungoChutney]

I think there's a couple of reasons for that. Firstly, they are landlords, probably scumbag ones, who rent out the majority of their portfolio. Or, they own that much property as a security and can/will sell when the market is right for them. 

I do have one of these as well actually, which was discussed on a podcast this week. How do guide dogs know where to go? Presumably they are trained to the owner but how do they know how to reach the desired location such as Asda for the weekly shop?

[HarmonicGenerator]

My one is also property related. You quite often hear of people remortgaging their house, or taking out a second mortgage, to pay for something else. What does that mean though? I thought a mortgage was like a loan that you pay off over many (many many) years. But if you've got one, how do you end up with two, and how does that help you? It sounds like it would be twice as much to pay!

[TibBo]

12 minutes ago, MungoChutney said:

How do guide dogs know where to go? Presumably they are trained to the owner but how do they know how to reach the desired location such as Asda for the weekly shop?

And how did they lean to read the ‘Guide dogs only’ signs?

[deathrey]

47 minutes ago, HarmonicGenerator said:

My one is also property related. You quite often hear of people remortgaging their house, or taking out a second mortgage, to pay for something else. What does that mean though? I thought a mortgage was like a loan that you pay off over many (many many) years. But if you've got one, how do you end up with two, and how does that help you? It sounds like it would be twice as much to pay!

You sell back some of the equity to the bank so for example - I bought my house for £425k, with a deposit of £170k. I decided I want to open a coffee shop and need money to invest in to it, I call my bank, explain my predicament and that I need money and essentially borrow some of my £170k deposit back say £40k so instead of owning 40% of my house, I now own far less of it. Remortgaging is slightly different, I'm on a 5 year fixed, when it ends I'll have to remortgage. I've paid off a chunk over the past 5 years so will need to borrow £200k when I remortgage, but I want to borrow more because I want to do an extension. I invite the bank to revalue my house, they value it at £450k now so I can borrow another 25k in theory to do the work and pay it off with my now £225k mortgage. It all affects your loan to value ratio so you'll often pay higher interest rates if you do this.

People also remortgage on a paid off property essentially using their home as collateral for the loan.

I hope all that makes sense

 

Edited March 21 by deathrey

[gmoney]

28 minutes ago, HarmonicGenerator said:

My one is also property related. You quite often hear of people remortgaging their house, or taking out a second mortgage, to pay for something else. What does that mean though? I thought a mortgage was like a loan that you pay off over many (many many) years. But if you've got one, how do you end up with two, and how does that help you? It sounds like it would be twice as much to pay!

When you pay off your mortgage you're increasing the amount of money that you own in the property. Say you bought it for £100,000, you've paid off £50,000 so you own that bit, but the house is now worth £200,000. The value of of what you own is now £100,000. So if you need some money you can choose to release a bit of the cash that would otherwise just be dormant by taking a second mortgage. Say you want £25,000 for something, then the bank would give you that, and yes you would have another payment to pay it back, but it would be smaller and often a cheaper than a traditional loan. If you took out the original mortgage a long time ago, that payment is possibly not as onerous on your finances as when you first took it out because of inflation, better paying job etc. 

EDIT: also what deathray said.

Edited March 21 by gmoney

[Cousin Jim Bob]

18 minutes ago, MungoChutney said:

I think there's a couple of reasons for that. Firstly, they are landlords, probably scumbag ones, who rent out the majority of their portfolio. Or, they own that much property as a security and can/will sell when the market is right for them. 

I do have one of these as well actually, which was discussed on a podcast this week. How do guide dogs know where to go? Presumably they are trained to the owner but how do they know how to reach the desired location such as Asda for the weekly shop?

Saw a TV program on this a few years a go. The dogs trainer will spend a few weeks with the dog and its new handler first, teaching the dog important routes. Such as going to the shops, going to the doctors etc. It memorises the routes and certain things like road crossings. The handler will normally have experience of doing these routes by themselves with a cane first, so they are working as a team with the dog.

Going to a new place the handler will plan the route using something like Google maps voice feature, then take it very slow first time. The dog then becomes familiar with the route and it is easier in future.

[Devon Malcolm]

27 minutes ago, Cousin Jim Bob said:

Saw a TV program on this a few years a go. The dogs trainer will spend a few weeks with the dog and its new handler first, teaching the dog important routes. Such as going to the shops, going to the doctors etc. It memorises the routes and certain things like road crossings. The handler will normally have experience of doing these routes by themselves with a cane first, so they are working as a team with the dog.

Going to a new place the handler will plan the route using something like Google maps voice feature, then take it very slow first time. The dog then becomes familiar with the route and it is easier in future.

There's an obviously very cute documentary about guide dog selection and training called Pick of the Litter, highly recommend it if anyone's interested in the subject.

[HarmonicGenerator]

Thanks @deathrey and @gmoney - you've explained that better than any bank or financial advisor I've encountered!

[SuperBacon]

Just what in the fuck is a 401k?

Stop talking about your 401k's you yank shitheads. 

Is it a pension?

[deathrey]

9 minutes ago, SuperBacon said:

Just what in the fuck is a 401k?

Stop talking about your 401k's you yank shitheads. 

Is it a pension?

It's what Americans call a pension. Not sure why it's called a 401k. Maybe what's what they aim to invest in it?

[SuperBacon]

2 minutes ago, deathrey said:

Not sure why it's called a 401k.

Because they're dickheads obviously

Edit: it's an IRS code.

Edited March 21 by SuperBacon
Yanks

[deathrey]

Oooohhh. Pension is surely just a universally understood term? Why not just say that

[air_raid]

Re: mortgages. As a former bank employee it’s a Minor Annoyance (TM) when people in and around the industry who should know better throw out “remortgage” for anything from getting onto a new deal when the existing deal comes up, to further borrowing/taking a further advance. In high street lending a “remortgage” only refers to transferring your loan from one provider to another. Or at least it did when I worked for a bank.

[Fog Dude]

10 hours ago, SuperBacon said:

Because they're dickheads obviously

Edit: it's an IRS code.

Apparently it's section 401(k) of the US tax code, but somehow it's lost its brackets over the years so I agree it now sounds like how much people expect a house to cost.

Makes you wonder if it's such a rite of passage to own your own home, why is it tucked all the way down there? You'd think it'd be much further up in like, section 3(b) or something.