borich

times going so quick for me and in 8 weeks time ill be starting to apply for jobs and the prospect or relocating once again will occur. Anyway After renting since the age of 18-23 I have had enough of wasting money on rent and wanna get myself onto the property ladder. However looking around house prices are really crazy atm and the best option is for shared ownership. If i buy somewhere on my own and rent rooms out any people don't pay up or move out im scewed. At least with a shared ownership theres less worry as people are jointly responsible and more respect will be given if they own it and are not tenants... some questions im wondering are

1) Who does a good 100% mortage I have looked At HSBC and natwest who both offer graduate mortgages.

2) If i was to purchase to a house @ 150k , 100K or 80k what type of montly interest repayments would I be looking at? (interest and repayment methods)

3) what advice on writing up a contract for the owners. eg when to sell.. what if one of them dies (write a will) etc etc

Any general comments are welcomed

Borich

davegtt

Hi, good thinking, shame you couldnt have done this a few years back, would have saved you alot of hassle and money. But I started out with a 105% morgage with Bank Of Scotland a few years back (took the extra 5% to pay for fees etc as I didnt have a penny to my name when I originally wanted to buy an house.) I wouldnt recommend it now as even a slight drop in the housing market would put you into Negative equity although that doesnt matter aslong as its a long term thing and you can afford the payments.

For an 100% 80k morgage Portman Building Society would do a 5.25% fixed rate for 5 years @ £484 a month....

For an 100% 100k morgage Portman Building Society would do a 5.25% fixed rate for 5 years @ £606 a month....

Both on Repayment deals, Id only look at Interest only if I expected the market value to shift highly which at todays point I wouldnt know what to expect.

Scottish Widows and Bank of Ireland offer similar deals too....

have a look on http://moneycentral.moneyextra.com/c...e6dd68d14cf79a

Should give you a good starting point IMO.

This is also a good little link, give you a quick calculation on a size of morgage, an interest rate and over a period of time, should tell you the monthly payments it'll cost you

http://money.uk.msn.com/mortgages/ca...estimator.aspx

Good luck. its a big step but you shouldnt regret it if done sensibly

TopBanana

If you think house prices are crazy just now, and you're sick of wasting money, how did you conclude that buying a house is the right move?

EP82

But are house prices ever not going to be crazy?

I am wondering wether or not to take the plunge with my long term g/f. Being only 21 i think we are going to see a bit more of the world before we shack up, haha!

richardg

...i would guess that because in the long term he'll have something to show for his money. there are a number of ways of looking at it - for instance, if you buy a house which would have cost you £1,000 a month in rent and you sell it for £12,000 less after a year (once you've taken account of moving costs, fees etc) you're still no worse off in theory, plus you will have been paying a mortgage for a year and earned yourself a boost to your credit rating.

borich

top banana i should of explained my situation better, I am 23 now and am currently doing a MA (that what all my savings have been spent on) and so in total I have been at uni from 18-23 and thus renting. So when i leave uni i don't wanna go into the situation of renting again where money is just gonna go down the drain. Was looking at house prices and doesn't look like you can get much for even 100k these days... Wheres all these affordable houses we were promised.. 30% of all new developments should be affordable.....

Borich

p.s the guy im consdiering with already has a stable job and ill be starting my career as a town planner so were both in the right situation to be looking for a house.

davegtt

EP82, there is never a right time to take the plunge, only when you feel ready, if you intend on buying the right house for you and something you can picture yourself in for at least the next 10 years I would disregard house prices, as long as you can afford the payments and an increase in interest rates then I say go for it, over a long term thing it will always be an investment IMO. Otherwise sit and wait for another couple of year and by then, if its not crashed then the only thing youve lost is 2 years of waiting.

scoobyster

Look into the rules about lodgers (licensees), they have far fewer rights than tenants where the landlord is not resident. IIRC you just have to give 'reasonable notice' if you want them to leave (my tenancy agreement says 1 month) then you can kick them out if needs be.

I have a £60k mortgage (with YBS - costs me £250 interest/month + £100 repayment, I needed a safe guarantor though as I was 19 when I bought it) on my 2 bed flat, my lodger pays almost all of that in rent and is getting a relatively good deal!

davegtt

Aparently the new builds are some sort of government thing where you buy 50% of the house, 3 years later you can buy another 20% etc. but after you bought the initial 50% and paying the morgage on that you still have to pay rent on the other 50%. Bit stupid really ohh and theres a massive list with the council to get in one of these house. Well there is round our way anyhow (Lincolnshire)

MikeCardiff

iTrader: (2)

I'd hang fire for a bit and try and save a deposit - two good reasons for this - one is that you'll get a better deal on the mortgage if you dont take out a 100% one ( 100% mortgages are generally loaded in the banks favour as they know the person taking it out doesnt have any other options so they can charge what they like ), the other is that in 6 months time what are house prices going to be ? I'd bet that in most areas they arent going to be as high as they are now.

I think its still a bit early for the effect of the static market to make that much of an impression, although a lot of sellers are having problems selling unless they drop their prices.

If you look at the cost of renting compared to mortgage repayments, in a lot of areas its quite a bit cheaper to rent at the moment, so it isnt dead money if you consider that if you buy a house now for £100,000 in 6 months time you may be able to buy it for £80,000, and I bet you wont have spent £20K in rent in 6 months !

I know a few people who sold their flats and houses when the market peaked, pocketed the equity, and are renting ( one of my mates bought a flat for £28K 7 years ago, and sold it 18 months ago for £115K !!! he currently rents a house for less than £5K a year ) - even if they rent for 2 or 3 years, the amount is a lot less than they made on selling their house - when prices come down a bit they can buy another place and pay off a big chunk of the cost in one go with the money they have from the first property.

I know when you rent you always want your own place, but buying just after prices have peaked is pretty daft - remember that if you take out £150K mortgage now, you'll be paying that off for 25 years - if you waited 6 to 12 months and bought the same house for say £120K thats a big difference in what the house eventually costs you.

The ideal situation to aim for is to have the smallest mortgage you can, on the cheapest house that suits your needs and pay it off as quickly as possible.

Paying a mortgage over 25 years is really the dead money as all you're doing is lining the banks pockets with the interest. ( Work out how much your £100K house has actually cost you 25 years on and its frightening ).

borich

after looking on www.rightmove.co.uk i can't seem to find anything good down south for 100k, don't wanna live in a real rough area or a shed a decent 2 bedroom house or flat would do... I can't really wait to years as my parents live in cornwall and no jobs down there so the living at home isn't an option. 2 years or so renting will be a waste of money. So i believe my best option is to buy. Does anyone know any good areas down south around Londonish,. M4 corridor or north in hertfordshire where theres decent prices...

Borich

richardg

try the a12 corridor. ipswich is about 45 mins from london by train i think and there are some reasonable properties there for the money at the moment

borich

cheers mike for the feedback. Im still considering the options jsut so much to think about. If I could get my hands on one of the affordable 60k new build affordable houses id he happpy.. but im not sure how easy they are to come buy or if theres waiting lists.

Borich

davegtt

Mike, completely understand what your saying but that £100k house, who says in 6 months its going to be £80k? I bet it isnt. Its a gamble, and unless you doing it to make a buck or 2 there is never a right time to buy IMO... you could be waiting for ages, When I bought back in 2000 in 2001 and 2002 houses were rising rapidly and a friend of mine was considering buying but he held off as alot of his friends at work kept saying its going to come back down soon. Now there is no way he can afford anything at all and hes on a fair wedge.... I personally think we'll be in a stagnated market for at least about 12-18 months. then might see some significant falls. But again its all guess work.

I agree with this to an extent. BUT. as frightening as it may look on paper, I dare bet the value of the house is alot more than that frightening figure in 25 years....

MikeCardiff

iTrader: (2)

Other thing to remember is that all your debts from Uni will be taken off how much you can borrow - so if you had no debts and qualified for a £100K mortgage based on your wages, then if you have £20K in debts, they will only lend you £80K.

House prices are going to stop being crazy because economically they have to - having house prices rise at a much higher rate than wages is unsustainable in the long term. There is a finite amount of money people can borrow, and it looks as though in the UK we are getting pretty close to it.

The only question is how much they will drop, and if it will be a sudden crash like last time ( which a few percent on the interest rate would cause ) or a gradual drop of say 1% a month over a couple of years.

borich

I jsut don't wanna be in a situation where im paying a load of rent for 2 or 3 years and the housing market keeps on rising and i can't afford anything

Borich

MikeCardiff

iTrader: (2)

Didnt the government say a lot of this affordable housing thing was mainly going to be for essential workers ? so coppers, teachers, nurses etc... get first dibs, and if theres anything left at the end they get offered to people already in council houses ?

Dave, agree, but my point is would you rather have a house you bought for £100K that 25 years on is worth £250K that you paid overall £200K for, or one worth £250K that you paid £130K for because you paid off your mortgage a lot quicker ?

I realise that for some people paying off the mortgage quickly isnt an option, but not overstretching yourself to buy in the first place means that you are more likely to be able to do this, and in the long term will save yourself a lot of money, and maybe even be able to have some sort of pension when you retire.

MikeCardiff

iTrader: (2)

#16 - I wouldnt worry about that, the market isnt going to keep rising for the next 2 or 3 years - people did find themselves in that situation of not being able to buy if they didnt buy 3 or 4 years ago, but with prices as they are now, there is no way they are going to go up again by anything like the same amounts.

borich

thanks for all the advice, think im gonna see what type of Job i get and go from there, ill keep you all informed with any decsisions I come to.

Borich

davegtt

Agreed, prices will not rise like they have done over the last few years, well the might in say a few years but I should guess there would be a significant drop in the prices first.

Again, I wouldnt worry about "total costs" etc. more of a if you can afford to do it without overstretching yourself then do it. More to life than making as much profit on your property as you can. The place is somewhere you intend to live and if you intend on living there for a long term then its a no brainer IMO. buy.

OllyK

Have you considered moving north? Dunno what you're qualified for, but I've seen senior developer roles going for £30K+ in Notts and you can buy a 2/3 bed terrace in Derbyshire (Potentially less than 10 miles away) for under £100K still. You could get a 3 bed detached for just over £100K 12 months ago.

borich

Im gonna be a town planner RTPI acredited course with MA so the pay is gonna be pretty sweet once i get the experience in. Im happy enough to move north as i like it up there, but my m8 whos in computing might find the wages less up there as hes working down near london atm

Borich

OllyK

Yes the wages may be less, but so is housing and the cost of living!

borich

exactly, id like to live up there manchester is an awesome city and mountain biking etc loads of better places to do that over what the south east has to offer.

Borich

Brendan Hughes

Is it only me who sees the irony of a town planner who can't find affordable housing?

Good luck borich, you're doing the right thing

Patt@firstime

PM Fast Bloke - he's a very knowledgable man

OllyK

Worth a look - but prepared to look out of the city centre for accomodation. Less opportunity in Manchester - but a lot of the old mining towns in Derbyshire / Yorkshire etc are starting to see some major regeneration. Prices are low compared to the national average at the moment - have a look on Your Move and compare what you get in DE25 7 against NG1 and they are only 10 miles apart. These areas are seeing investment as they are close enough to comute to the cities like Notts and Derby and are the last little areas of cheap housing, I expect house prices to continue to rise against the national average in these areas for some time as the FTBs from Notts and Derby are forced to lok further afield. It may be similar in Manchester, but I haven't lived there in the best part of 20 years!

borich

ill make sure we get those 30% affordable housing stocks in new developments...

Borich

borich

Just came across that

http://www.rightmove.co.uk/viewdetai...a_n=1&tr_t=buy

Borich

watto52

the house will be his to do what he wants to. Im in a similar situation. A the mo im renting, money down the drain, so ive decided to buy. Because im a first time buyer, i went for a 100% mortgage with northern rock through your move. Im only paying £57000 for the house which is quite good. I live out in the country in cumbria so house prices are pretty good.