Fiscal responsibility - Didn't you say your parents laid down the deposit for you?
My view and choice have nothing to do with fiscal responsibility or lack of it - just personal preference and living my life. I can do the same as you after 30 years and have all of my care paid for - which let's face it is what we all would do rather than having to pay for it ourselves. I won't have to hide the money from my house or donate it to my children. The only difference being I wouldn't have worked my whole life, to in effect hand to over to my children for them to get on the ladder. Security as you call it is double edged to me. It revolves around your job/career and if you lost your job, how long can you realistically keep up your mortgage repayments before your house is repossessed. Then how much security do you have and what have you gained.
As I said when it comes to it I will of course get on the ladder, but it will not be an over exertion and I won't put myself in potential trouble because it is the "secure" responsible option!
The mrs and I could never afford our own property...the deposit alone was enough to make it vastly difficult for us...so the Mrs uncle bought the house we wanted...we "rent" it from him, effectively paying the mortgage and a bit extra for his services, and he does the whole landlord bit for us if needed (only ever asked for a new boiler, the rest we did ourselves). Could be a good way to get a house - get someone else to buy and you draw up a contract where you pay back the mortgage payments etc and you own the house when it is paid off. We are 4 years in, so nearly 1/5 of the way
He bought it as a "buy to let" property, and at the end of the term, we will own the house as per the contract drawn up
Last edited by nephilim; 24th July 2012 at 07:11 PM. Reason: added an additional line
The majority of houses for occupation in this country were built during the inter-war years. That's a relatively recent surge of housebuilding that we're unlikely to ever see again despite the resources at the disposal of the government. Not that it really matters to most people as they want to live in prime locations near to good schools, shops and transport. In built up areas redevelopment opportunities for family housing are few and far between even if there was an interest in building.
I'd never recommend anyone shared equity. You actually end up paying for a property several times over. For example (for those unsure) a house that's worth £100K with a shared equity of 50%.
You get a mortgage for 50% (£50K) and you pay the housing association x amount per month. Two mortgages in a way. After a year or two, you may be given the option to buy 10% of the shared equity (totalling 60%), but that 10% would have been paid by yourself several times already.
Basically if my maths are right, you could end up paying £250K + for a house that's only worth £100K and even worse, you won't ever be able to own 100% of it.
See we don't pay anyone else but the Mrs uncle. We effectively own 1/6.25 of the house we live in. Next year it will be 1/5...and continue accruing until we own it all. As soon as the mortgage is paid, its ours
Have you been to a mortgage advisor? They tend to have access to deals you don't or might not find on your own.
I bought my house almost 1 year ago with a 15% deposit. Although I had been in the same job for 6 years I don't believe they required 3 years, they only asked for 3 months pay slips.
My advice is take what you can now and grin and bare it for a couple of years, by which time you should be in positive equity, mortgages will be easier to get anyway, and hopefully you will have saved a few bob extra as well giving you a decent deposit for a decent house.
Agreed. They will put a retention on it which basically means you might spot a house which needs 10k spent on it to make it livable. The bank will then want a "deposit" of at least £10k (probably double) to cover the work they would need to carry out to sell it should you not pay the mortgage. Add that £10-20k to your original deposit and you now own a house. Ok great you can now work away on the house and make it livable in your own time, right? Wrong. You will have around 6 months (iirc) to carry out the work which obviously means you need the £10k sat in your bank as well as your retention and as well as your deposit... as well as your solicitors fees, checks, etc... and then after all that you will need the money to furnish and decorate.You'll not get a Mortgage for a property that needs renovation (short version).
Basically if you find a wrecker house for £50k you will need at least £35k sat in your bank to stand a chance of buying it.
Have you looked at auctions? You can get some bargains and it's not actually as daunting as it initially seems.
Last edited by j17sparky; 24th July 2012 at 08:57 PM.
AMLightfoot (25th July 2012)
Being fortunate enough to be at the other end of the cycle from you guys - I can't recommend buying your own property enough - I've paid off the mortgage and now we can survive on a single wage without all the worry. Its a weight off your shoulders and a boot off your neck - we can give "the finger" to "the man" and not have to dance to his tune anymore. Yes we were fortunate that house prices were a lot lower when we started out - but conversely interest rates have been a LOT higher - 17% really made my eyes water and made the repayments quite a bit bigger than one of our salaries, which made being redundant quite stressful, though I agree with the post that reckoned prices are to high and interest rates will rise...though I've been thinking that for several years and it hasn't happened yet - I'm not sure the govt can take the pain that would be caused by mass repossessions as happened 20 years ago, but we'll see. At least you're in a cheap part of the country - or you could just take over the house across the road and squat and save your money...
If you see yourself moving well up the ladder of earnings, then investing in a house has (in the past) been a reasonable plan as a basic savings vehicle and of course you get to have a lot of control over your living arrangements.
And of course it fulfills the human nesting instinct that a lot of people have.
But renting is by no means (and quite possibly the most sensible) a daft option if you just see your self trundling through life, enjoying it where you can.
its always been the way, that if you want a house, its going to cost you a lot to get on the ladder and a lot (compared to income) during the first 10 years. Most people have familys during this time and if your income is not increasing beyound inflation and/or interest rates then a lot of pain can follow.
Educational IT support is not renowned for its progression and good salaries
PS I married someone who already had a house so I was lucky
I don't think .5% is going to last. While I agree we're unlikely to the heady heights of 17% again, 1% buy christmas is likely. Within the next 5-10 years I think we'll see 5-6% again. The question is when and how fast?
I bought a house with my other half about 3 years ago (so during the recession) with a 10% mortgage and no money lent from our parents.
However, we have a distinct advantage compared to a lot of people in this thread, both working and no children. Now I don't know exactly how much children cost, but I am imaging they cost enough to make saving for a deposit difficult.
As for getting a renovation project, we did. Don't worry about what people say about mortgage not touching them, a mortgage company never sees the place, a surveyor does. I got a house that was on the market for 100k for 85k, as long as the surveyor thinks it is worth what you are offering then a mortgage company doesn't care.
Don't be disheartened by people telling you how hard it is to get on the property ladder, you got to do the leg work yourself sometimes to. My other half was a postgraduate student (with a tax free stipend for research), all mortgage brokers told us no one would recognise that income so they wouldn't lend us money. I didn't believe no one would and got a mortgage directly myself, with my first question as I rung round places being regarding this income. It was probably a lot more effort then using an adviser but I am better for it. I know exactly what is going on etc.
Also remember buying a house is for the long term and can take months anyway. You need to speak to a company and work out what they would lend you if you had a 10% deposit, then your problem is finding a house and getting the deposit together, you don't need to provide proof of deposit till you are actually getting the money from the mortgage company. Then obviously you need the money when you are asked to transfer it.
I took out a mortgage in 2000 and to be honest I'm glad I got out of it. I didn't like the idea of being tied down, or the hassle of selling and buying again, and the whole chain.
It's nice to own your own house (but isn't it the bank's until you pay it off?) but there's the associated repairs and upkeep. And what happens when you die? It gets sold and then your kids argue over who gets what percentage which they'll probably blow on a car or holiday. Is it really worth all that effort?
I much prefer my philosophy of renting and then moving on when I get bored of an area, not have to worry about repairs and just enjoy my life.
There are a LOT of costs associated with buying a house. What makes you think that just because our parents helped us with the deposit that we didn't plough our savings into the other costs - the solicitors fees, the furniture, the survey, etc? These little costs eat money really quickly.
I find your comment offensive, actually. Suggesting that we are irresponsible with money simply because we needed help with the deposit. There is a HUGE difference between needing help with the deposit and being fiscally irresponsible. An irresponsible person is a person who fritters their money away on pointless things, expensive holidays they can't afford, running up credit card bills, living beyond their means. A Responsible person is a person that lives within their means and saves for their luxuries and only has what they can afford. We couldn't afford to have a holiday AT ALL this year, so we didn't. We've been saving specially and can afford a week in Andorra in January. This doesn't make us irresponsible. If I was constantly crying to Mum and Dad whinging about not having any money and asking for handouts, I'd say I was irresponsible. But we don't. We live within our means and have a modest amount left after all the bills are paid to invest in the house (there is a lot of work to do and we'd rather do the house up and increase our equity share than 'save' it) and to save for a little holiday.
I'm quite angry now. I assume that was your intention with your offensive little jibe.
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