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Re: Mortgages

Postby Bel Bel » Fri Aug 14, 2009 12:44 pm

don't forget your solicitors fees and stmap duty (if relevant)
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Re: Mortgages

Postby dipsydoodlenoodle » Fri Aug 14, 2009 2:42 pm

Stamp duty won't be relevant :) I have additional money for fees and stuff.
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Re: Mortgages

Postby Bel Bel » Fri Aug 14, 2009 3:58 pm

Good, you have a nice size deposit then and that should help getting a good rate
Good Luck with the viewings
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Re: Mortgages

Postby dipsydoodlenoodle » Mon Aug 17, 2009 8:19 am

Well I saw three houses on Friday. I liked one, there would be nothing to do, which would mean I could put more deposit down...OR there was another house on the same street which needed updating (around the same price actually) which would mean less depsit. :-k
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Re: Mortgages

Postby bellajennie » Tue Aug 18, 2009 1:39 am

I think you need to ask yourself what your main priority is. It is always tempting to try to find a house that needs updating to get some money made on it.

You say this will mean you will have less deposit if you do this. The question is really whether you would have the money to do jobs on a house, because many things are more expensive than we realise. In many cases as well, houses that just need a little cosmetic updating to your taste will cost money to do but not necessarily add a great deal in value as more major renovations.

If you are planning to buy because you feel you are wasting money that you spend on rent, it might be more pertinent to use the biggest deposit you can on a house you can easily move in to. This will mean that you can lower your monthly repayments, perhaps leaving a little extra each month to save up. If you were happy to stay in that property for a few years you could then use the money you've saved, plus what you've repayed on the mortgage to do a more adventurous project.

A fixed interest rate for say three years may also help you know where you stand for that time period.

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Re: Mortgages

Postby dipsydoodlenoodle » Tue Aug 18, 2009 8:44 am

No muttering bellajennie, it's always good to have advice from people who have done it before.

I agree entirely with you. I am looking for a house I could live in for 10 years; with the current climate I'm not going to be able to selll easily.

The house that needed nothing doing was better laid out, they'd made better use of the space, the kitchen and bathroom were new and clean. I could live there 10 years and not have to replace the kitchen or bathroom. The other house...it would need a new kitchen, bathroom....the carpets were thread bare; so I'd need new flooring ASAP, the house smelt; actually they had 2 bathrooms...it was only a 2 bedroomed house, but both bathrooms would need doing, . The first house was light, airey and had all been re-plastered, the other house hadn't and it was dark. They are opposite ends of the street both on the same side (8 houses apart). One had a plain garden, with tall secure fencing (the nice house) the other, the fences were falling down, it wouldn't be secure...I want dogs so it's a priority. The neighbours at the nicer house had a nice clean looking house with a clean garden, the neighbours at the not so nice house had a delapadated house with a majorly overgrown garden. One is up for £120,000 (the nice one) and the not so nice one £119,500. I know I could fix the not so nice house up, but I don't have the finances to do so at those prices.

I don't mind a project so long as the house is cheaper; I looked at a fantastic house, really big, small garden....lovely really...however it NEEDED a kitchen (There wasn't one), the bathroom wasn't nice - it could have been used); it needed decorating (I know every where you'll want to decorate but it NEEDED it), it NEEDED carpets, unless you like 1960's thread bare carpet. It needed a damp course (the house stunk of damp) - the estate agent assured us it wasn't damp...we even pointed out a patch of damp on the wall - but no we were mistaken according to the estate agent. The house needed heating, re-plastering etc. I estimated for heating and replasteing and a kitchen alone (looking at cheapish kitchens) the hosue would have taken £10,000 then there would be the carpets then the walls, plus some of that lovely 1970's wood panneling. The house was lovely, the work didn't scare me...it was just a shame that the house plus the renovations would have cost far too much (for me).
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Re: Mortgages

Postby bellajennie » Tue Aug 18, 2009 10:13 am

It sounds like the first one seems a better bet. It's probably at the top of the price range so unless house prices go up again then you probably won't make mega bucks on it. If the kitchen and bathroom are fairly neutral anyway, in 10 years when you want to sell you will be able to just do some cheaper paint jobs perhaps re-tiling to ensure it keeps its value. As the walls are replastered you will be able to keep painting over as many times as you like to keep the house fresh and clean.

The other one sounds too much of a committment financially. You'd have to spend more to get it to the same standard.
For example, central heating and a new boiler in my 2 bed terrace is costing me £5500, the bathroom and tiling is £1000 (this is a basic suite) and plastering can be between 200-400 a room depending on size. The integrated appliances for the kitchen are £1200 alone. It quickly adds up!

With the 'nice' house, you will just be able to concentrate on paying back as much of the mortgage as you can. In this case perhaps you should look at a mortgage which will allow you to make overpayments. My mortgage allows up to 10% overpayment of the total sum borrowed each year, which for me is 10k. However, if you are borrowing less, it might be worth looking at getting one that has no limit on repayments. This is if you are going to have extra money each month. Extra money is usually better off going towards paying your mortgage then sitting in a savings account. The interest you'd earn on the savings is much less than the mortgage interest in most cases. However, it is difficult to get the money you've put in back out, so think about that if you plan to use any lump sums for anything like holidays, cars, or weddings etc.

You say you want a fixed deal. My opinion would be to look for something that gives you a fixed rate for 2-3 years. You can then often remortgage with the same company for a better fixed rate deal after that time with no mortgage fee. Switching to another company may incur a fee, but their rates may be cheaper so don't be put off by that.

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Re: Mortgages

Postby dipsydoodlenoodle » Tue Aug 18, 2009 10:55 am

I'm just in a pickle at what to do BellaJennie.

bellajennie wrote: However, it is difficult to get the money you've put in back out, so think about that if you plan to use any lump sums for anything like holidays, cars, or weddings etc.


This is my problem. My parents have a little amount for me for when I get married, but they would give it to me for the house. But I'd like to keep it to be honest. I just don't know. I think it will end up just costing too much alone. The bills and mortgage will take up ALL of my wages. My bf is jobless so he couln't help. If I was going it with someone then I could manage fine :(.
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Re: Mortgages

Postby bellajennie » Tue Aug 18, 2009 5:17 pm

It is possible to remortgage after the initial period you have fixed for.

For example, say you buy a house for 100k and have 20k deposit your mortgage is 80k.

After 3 years you decide to plan a wedding. House is worth 100k, you need 10k for wedding. So you remortgage for 90k. Your monthly rate would go up because you would have more to pay back to the bank, but you'd have your wedding money and probably could afford a bigger mortgage because hopefully future hubby has job by then!
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Re: Mortgages

Postby dipsydoodlenoodle » Wed Aug 19, 2009 8:04 am

True. I was talking to my dad about it last night and he said he'd help me out (my poor dad doesn't have the finances to help - they have money saved but I wouldn't want to touch it becasue he'll be retiring soon).

I'm just going to wait and see what the Mortgage man says tonight, as I got quotes ages ago but they were for cheaper houses.
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Re: Mortgages

Postby Bel Bel » Wed Aug 19, 2009 11:53 am

I have a large amount of cash in my house from inheritence but when I went to the mortgae company for a small loan against the morthage they told me at the moment they are only lending out if you have more than 25% equity, I have exactly 25% so they wouldn't help. So be careful because alot of companies are chaning their criteria in lending especially once your committed.
I mean it's my money but I couldn't actually access it without moving :o
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Re: Mortgages

Postby dipsydoodlenoodle » Wed Aug 19, 2009 11:59 am

Bel Bel wrote:I mean it's my money but I couldn't actually access it without moving


It's stupid. I'll ask all the relevant questions tonight since this time I have seen something and I have more of an idea than I did last time.
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Re: Mortgages

Postby Bel Bel » Wed Aug 19, 2009 3:47 pm

Out of interest I looked at some mortgage calculators and compare sites and most of the best deals are now against 70% loan to value. In other words 30% deposit :o :o
There were a few 80% but anything after that seemed really high rates
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Re: Mortgages

Postby dipsydoodlenoodle » Thu Aug 20, 2009 8:30 am

I know, I think they are more lenient on first time buyers but then they charge excessive interest. I think it's typically around 6% for a FTB. My only issue is if I wait, do I miss out on being able to afford a house because prices will rise, or do I jump in now... ](*,)
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Re: Mortgages

Postby Bel Bel » Thu Aug 20, 2009 9:52 am

God yeah 6% :o :o :o

It's impossible to predict the right time to buy. I have always bought at the height of the market :x It's ok as long as you don't move again until the market comes back round.
They claim recovery has started though so things could suddenly start moving again at any time really

I don't think anyone can make this decision for you
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