General Chat Thread, Owning your own home..... in General; ...
25th July 2012, 01:22 PM #76
Using the same amount of growth is also unrealistic. The housing boom pushed the prices up dramatically as you know, but how many of those do you think we will be having in the next 10 to 20 years looking at the economy currently?
Originally Posted by localzuk
I am off out to a site visit now, so thanks for the debate - I have enjoyed it as it has been both thought provoking and interesting to hear everyone's views and situations. That is the part I enjoy on here. I have never been one for personal attacks and those of you who know me on here will hopefully agree!
25th July 2012, 01:27 PM #77
Getting a little heated in this thread. Everyone entitled to their own opinion, there is no right or wrong way to do things it just what best suits your circumstances.
I've just got my first house, the Mrs had some savings already and I myself saved up as much as possible over past couple of years. I couldnt have rented while saving, and prefer to save towards something ill own rather than a landlord. Putting all our savings together gave us a healthy deposit, and has paid for a lot in the house which takes a chunk of money, like the solicitor, survey, the boiler, electric rewire, decoration, furniture etc.
My advice to the OP would be to see an independent mortgage / finance advisor. They will run through everything with you and take all your earnings into consideration and give you an "independent" view on what "may" be the best way forward to suit you. These people are normally free, and generally get paid from the mortgage company when or if you take out a mortgage. Usually they will work in estate agents.
25th July 2012, 01:30 PM #78
Thanks everyone for your opinions and advice... alot of it will help in my aim to get onto the property ladder.
As it turns out theres been a spot of luck (maybe) a friend of mine has had a house on the market for 3/4 years and has not sold so he took it off, he has several properties and hes had this one the longest. It used to be a shop so it all needs doing up inside. Downstairs theres a bit of damp which I suspect is from the property being empty for a long time.
It's far from derelict more like "A do-er upper"... needs new bathroom, kitchen etc etc.
my friend who I have known a while for now and have worked along side for for a while has Said "do it up - you can have it rent free until you do" So I have got the keys been for a look round and have a friend of mine who's a builder and project manages properties if/when he can so he knows what he's talking about coming round on Friday to have a look and tell me how much is needed (money wise) to do it up. The friend who the property belongs to has also said "pay as you go to buy it" the kind of situation where ill be living in the property, pay rent when its done up but the rent go's towards buying it and we can do what we like to it while we are there.
Once my builder has told me what needs spending on it to bring it up to scrach.. New boiler, bathroom, kitchen etc I will then present these figures to the owner and if we want we can go ahead or give him the keys back and say thanks but no thanks - if we do want to take it he's agreed to get all the correct legal documents drawn up and signed etc etc,
Opinions ???? Does it sound good ? Would it be a good step towards getting on the property ladder ?
The property has been surveyed and is structurally sounds just needs renovating.
25th July 2012, 02:22 PM #79
Sounds like a great opportunity, assuming of course it's a good enough friend that you know 100% you can trust. Only because otherwise putting the money in to do the house up would be a huge gamble if there was even the smallest risk of the deal falling through, you being told to move out and left with nothing.
Originally Posted by cpjitservices
It's the sort of thing I'd jump at with the right 'landlord' though, good luck to you.
25th July 2012, 02:32 PM #80
'Pay as you go' sounds too good to be true. Friend or no friend make sure something is written down on paper and legal contracts are exchanged or you could end up shafted. I wouldn't agree to anything until contracts have been exchanged. The payment details are up to you and the seller, but they must exchange contracts and 'agree to sell' before you pay them a penny.
Originally Posted by cpjitservices
Also, if you have the readies for the rennovation then go for it! Nothing quite as satisfying as having a blank slate to do whatever you like with! Only difficulty is affording the new kitchen and bathroom and whatever you need. IF you're handy with DIY or have friends/family in the trade that are willing to help then it's great, but if you have to get contractors in it could prove expensive. Although 'live there rent-free' is a real deal-sweetner as that will give you a good £700 a month to play with! Just make sure to cover yourselves legally as you don't want to pay for all the work then get shafted by the seller and having no logal docs to fall back on. My dad always says never mix friends and money and I think he has a point.
Also re: The damp - how old is the property and what is the construction? No-fines are terribly prone to damp by virtue of the metal structural supports encouraging condensation and drops of concrete bridging the damp-proofing. You could tour a street full of no-fines houses and find that perhaps 3 or 4 in 20 of them will have damp somewhere in the lower half. Our house is no-fines and I discovered these delightful little problems after discussing some issues with a neighbour who has been plagued by damp for years. Luckily our house doesn't suffer with this (although some of you may be familiar with the tissue-paper-party-wall situation) but I know of at least 1 other house in our row of 14 that suffers. So that is worth bearing in mind when you have the place surveyed.
I have to say that it's pretty hard not to take it personally when a) I'm the only person to have posted such an opinion in such depth and b) you quote my posts directly then proceed to pass comment on the post directly and criticise people that do exactly as I have done in the way I have done it - sounds pretty personal to me. If it's so non-personal, why quote the post? Why not just say 'as others have pointed out' or 'as I'm sure a majority of posters have done' rather than specifically target examples? Also
Originally Posted by cpltd
I'd say that a specifically targetted personal response wouldn't you? It is referring to me and my situation directly and making a targetted judgement implying that I am not eligable to comment on responsible home ownership by virtue of how I raised my deposit. It's pretty hard not to take something personally when given context like that wouldn't you say?
Originally Posted by cpltd
Last edited by AMLightfoot; 25th July 2012 at 03:11 PM.
25th July 2012, 03:31 PM #81
I think you just have to accept that things have changed since our parents day. "Back in the day" it was quite rare if you owned a car, or a colour TV set.
When my folks bought their place, they relied on hand-me-down furniture and lived on beans & toast and generally lived frugally. Then the kids came along when you were in a better financial position.
Now people get a house but that's not enough, they want new carpets, new furniture, a big TV. And they already have the kids.
The mindset of "you must own property" needs to be re-thought. It's not the be-all-and-end-all of life. There's no gold star for having a crippling mortgage and stretching yourself to live beyond your means, particularly buying at a terrible time like now.
25th July 2012, 04:03 PM #82
Interestingly I was reading something about the socio-economic changes that have taken place in our cities and one of the major points was that back in the olden days (industrial revolution right through to pre and post WWII) very few 'common' people owned houses. They rented from their employer or the gentry land-owners. Society has changed in such a way that we've gone from predominantly renting to owning. The reasons being that back in the olden days 'commoners' didn't earn enough to own their own homes, but similarly they tended to live close to their workplaces and large industrial complexes had a housing structure around them that was owned or managed by the company themselves or in co-operation with them (I'm thinking of old mining villages etc). But our society has changed so much that the class boundaries are no longer clear - they've become blurred and the trend towards owning houses is part of this. In the olden times, the manual workers rented homes from their employers, the employers, landowners, managers etc were the ones that owned things. Jobs and hierarchical structures are so different now that there is no division between the common worker and the managers - there is a gradient of roles and responsibilities in between. The same can be said of the trend towards owning houses - as the division between classes has blurred, so, too, has the housing structure. You can still (to some degree) measure a persons economic success by the size and location of their home - someone on a minimum wage job is hardly going to own a 7 bedroom detached mansion in the country unless they're living off the social and have been rehomed there by the council (I refer you to several news articles this year in which newspapers have scandalised the nation by reporting how councils are paying extortionate rents to private landlords to accommodate large families in 'luxury' housing). Renting is unpopular because of the way landlords are poorly regulated and have a tendancy to extort their tennents. I'm certain the same was true back in the olden days but people didn't have a choice. Mortgages weren't given to the common man.
Originally Posted by Gibbo
Perhaps we as a society DO need to rethink our stance on renting, but if this is the case, then the government needs to step in and regulate landlords more effectively. They should not be allowed to exploit tennents and there should be a specific set of rules governing how they deal with faulty appliances or problems in the property. Similarly many landlords have been burned by poor tennants - perhaps if tennents were vetted better then landlords wouldn't need to come down hard on everyone else. I don't know, I don't know how it works but I do hear my friends complaining constantly about their ineffectual and dismissive landlords - you pay good money for a service - they should damn well provide you with one! I've lost count of the number of people I know that complain of broken appliances and end up buying their own when the landlord refuses to replace it. If renting was a more stable option then perhaps more people would do it, but when landlords can suddenly decide to sell the property and give you 3 weeks notice to find a new home I certainly find that kind of uncertainty too stressful!
2 Thanks to AMLightfoot:
cpjitservices (25th July 2012), Gibbo (26th July 2012)
25th July 2012, 04:14 PM #83
I Agree, my landlord COULD sell at any time! As it is my rent has gone up this year as his mortgage rises and the agency fees are added, who knows what can happen and when you get "3 weeks" notice everything is such a rush and thats where the stress comes from.
Originally Posted by AMLightfoot
25th July 2012, 04:50 PM #84
Apologies if this is side tracking a bit here but just wanted to know what was the minimum deposit when buying your first house etc, also which type of mortgage is better to go for or does that depend on the persons circumstances as far as money etc
25th July 2012, 04:59 PM #85
Deposit is generally good to have 10-15% of the value of the house you are after, the more you have, the better you look to the bank.If you can get 30% or more, the cost of the mortgage drops rapidly, and interest rates drop massively also. In my case it would have been £14.5k-21.75k deposit (but as explained previously, someone else purchased for us so we didn't need it).
Mortgage is always dependant on your circumstances. Fixed rate is exactly that, you pay the same interest over a fixed period (usually 5 years or so), and it doesn't matter about inflation or deflation, it stays fixed. Tracker goes with inflation/deflation (at least I think that's the theory).
Thanks to nephilim from:
mac_shinobi (25th July 2012)
25th July 2012, 05:02 PM #86
Mortgages and their deposits are based on 'Loan to Value'. The lower the LTV (loan to value) %, the lower the interest rate. You very rarely see 95% LTV mortgages now. Usually the best you will get is a 90% LTV which means you need 10% of the purchase price.
Originally Posted by mac_shinobi
So, if you buy a house that is 150,000 with a 90% LTV Mortgage, you will need to put in 15,000 and the bank will loan you the 135,000. This means that on the day you buy, you OWN 10% of that house, you OWE the bank 90% of that value. If the value of your house then drops below 135,000 you enter what is known as 'negative equity' because the house is not worth the amount you owe on it.
The lower the % LTV (eg. 80% LTV meaning you need to put in 20%) the better the interest rate and lower the repayments.
There are lots of types of mortgage but most commonly people have repayment mortgages meaning you repay both the capital and the interest.
Interest can be fixed or variable but usually fixed rates are only fixed for a certain period after that the variable rate goes up and down in line with inflation. Most people like us with limited incomes tend to prefer the higher cost but better stability of fixed rate and will 'remortgage' at the end of the fixed term.
Definitely speak to a mortgage broker - they are GREAT. We used 'Town and Country Mortgage services' and Gary was wonderful, but they are the best people to help you decide. It is worth speaking to banks directly though as they might offer a better deal but usually brokers have better access to rates.
Thanks to AMLightfoot from:
mac_shinobi (25th July 2012)
25th July 2012, 07:41 PM #87
right on cue, today's economic numbers show that we will certainly not be going to 1% by christmas.
Originally Posted by tmcd35
there's very little or no upside to rates rising by 1 or 2%. It hurts borrowing for starters, which is desperately needed for creating jobs and investment. But more important the Bank of England cannot implement QE without rates being at or near 0%. So straight away the bank of england loses it's main bazooka if it raises rates. it may be firing blanks but they won't want to risk not having it at their disposal.
The issue around deposits is that we're in an era where 10% is way too low, surely young upwardly mobile folk have parents/grandparents who wouldn't miss another 10%. the best deals are at 60% Loan to value, which i bought at some time ago...and even then it was/is a struggle - and i'm one of those who don't have to worry about negative equity. I do have major concerns about trading up and upkeep of a property.... the government will struggle to ever raise rates above where we are today because there are too many people on the edge, and it's morally not justifiable just so as people who do nothing with their money get a little boost. that's really money for nothing, those who talk about fiscal responsibility really don't have a clue about how the modern world works. If i was fiscally responsible the inheritors who are busy divvying up the cash that they received courtesy of my hard earned deposit and loans, would be divvying up diddly squat. How's that for fiscal responsibility!!! my money stays in the bank, and they have nothing to spend...just a pile of bricks and mortar they can't get shot of. no economic growth is precisely a result of fiscal responsibility and nobody spending any money!!
26th July 2012, 11:03 AM #88
2012 is a year for new things for me and Mrs RAD we got married in April and are home owners in May, both financially stressful.
We bought a 2 bed place with a 20% deposit, we were asked to try and get 25% but it felt wrong to beg for money, so as we wanted to do this ourselves we went with the original amount. After the initial deposit you have solicitor fees, survey fees and mortgage fees to take into account. Some need money up front others dont. If one of you has had a property in the past, that means you can't get out of stamp duty, so for us another 1% of property price.
If you buy at auction, you need to have a mortgage already set up, I would get loads of advice, I am sure,watching day time tv, it looks great but you could end up buying a shoddy place. When we looked, right move had a place which was obviously a mortgage repossession as everything was a mess, to the point it had to stairs, the previous owners ripped that out too.
My advice is to seek financial advice through an ndependant mortgage advisor, we were lucky to have a friend in the business who advised us n the best mortgage available. We also took out medical insurance, etc so in the event of us getting Ill the mortgage is covered. For us IT guys this is about £30 in total for the 3 policies I have, as other half works out doors,s it's more expensive for her as she has a high risk job. We took these out so instead of us having to find money, it's a reassurance we won't end up in trouble, basically an insurance on the mortgage.
I have been lucky to save up, I know not everyone can, but for us it has been worth it to call somewhere our "home"
26th July 2012, 11:29 AM #89
I totally agree - the mortgage advisor is a brilliant idea! Best thing we ever did. We decided not to go with the insurance as the 'core bills' can be covered by 1 salary in our household so worst case scenario we'd be able to manage a couple of months on 1 salary (bear in mind the 'core bills' includes our monthly food budget so we won't starve!) but we DID decide to go with a life insurance policy that will pay out specified sums in the event of one of us dying or having a terminal illness. Limb amputation is covered as is Breast cancer and loss of an eye although the payouts for those are much smaller and would not pay off the mortgage - I think if I lost a breast due to cancer I'd get 25,000 from the policy IIRC. I believe our policy also pays off the mortgage in the event of us contracting certain types of non-terminal cancer provided that the cancer is of a certain severity level/stage (morbid I know) as life expectancy is low. So whilst we didn't go with payment protection, we did go with the life insurance and our advisor really helped us to work out which policy we wanted and what was best.
Originally Posted by rad
26th July 2012, 11:32 AM #90
rad what you bought was the now so famous PPI.
I couldn't get that when i got a mortgage as my other half's income wouldn't have been covered.
As for Life Insurance, I thought it was usually a condition of the mortgage now, because they(mortgage provider) don't want to get given a house after you die, they would rather get the money and leave the house to family etc.
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