membrane
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Posts posted by membrane
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Many thanks for that, you've put my mind somewhat at rest. The solicitor was chosen as a recommendation, as we wanted someone we could trust, as you say with the biggest financial decision we'll probably make so budget wasn't a factor & I've no problem with the quality of her work (now you've explained the boundary thing), it's the communication that's so annoying (2 conversations a week? I wish, we've had none, except a couple badgered through by ourselves, where we just get "you don't understand the process, it's your first time", with no explanation of the process) all we got was just various searches through the door with no idea when they will end it how things are going are when they will end.
Anyway we must be close now. Oh & thanks for doing my solicitors job for her
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I'm currently in the process of buying my first house, & have a couple of questions about the process as I'm not over confident with our solicitor, who appears to have taken a vow of silence & only seems to answer 1 question per correspondence & that's in the vaguest terms possible.
Anyway I've had lots of search results through the post all coming up apparently fine, but the priorities of the responses seem odd to say the least ie I've had a massive run down about the chances of getting Japanese knot-weed at the property, but when it came to the house boundaries there was a tiny black & white thumbnail picture no bigger than 5cm with just a red pen line drawn around it, is this normal, I was expecting a massive spiel with coordinates down to a gnats nidger blah blah blah but no. I basically haven't a clue how much will be mine (I can assume with the fence lines, but is that right?)
The other question I have is the we have received the completion statement with all the relevant bills asking for us to pay Asap, but we haven't exchanged contract or anything which a quick Google tells me is the norm (well as far as we know we haven't exchanged contracts but again that may have something to do with the vow of silence), however the mortgage people require 7 days release notice & that hasn't been asked for (check with the mortgage people who do talk to us), so why should I pay the sizeable deposit into just this random account number & sort code we have been given (presumably just taking her word for it that its a business account instead of her own personal in doing a runner account, how can you tell, what protection do you have?) when we haven't even got a completion date?
thanks in advance
Durged
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Just noticed a slight error - above should be +9.50 base rate - rest is correct I think .. Anyway it doesn't matter as the + would change anyway!
I also just realised I didn't re-do the comparison with the lesser fixes
the extra 8 years of peace of mind costs (compared to the Coventry 2.35% rate) : £3645.54 at the end of Year 2 (after that we have uncertainty..)
and the extra 5 years at 2.95% : £5776.87 by the end of Year 5 (again after that who knows..)
Doing all these calculations - I feel rather exposed, having taken a 2 year fix myself (on a slightly larger loan)... but hey - its a problem for 2 years from now. ( la la la la laaaaa )
Hopefully 10 year fixes will still be at 3.99 in 2 years
Thanks for that & yes I do agree to a certain extent, but I've always been up for the short term pain, long term gain, hence the whole position I'm in now to start with. She has every intention of overpaying by as much as possible (may not make the 10k a year max over payment allowable in the first couple of years) & I agree rates arn't going anywhere upward for a couple of years at least barring a real shock, it's years 4 onwards that could give sleepless nights.
Come the end of the fix any residual mortgage left I could stump up if neccesary, but who knows what state we'll be in by then? A 6k loss after 5 years for an insomnia free decade is a hit we're willing to take (especially as I'm not taking it) I/we could be quids in depending on the scenario.
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Well - From what you've said I calculate the payment to be 1150.14.. you still owe 92961.79 at the end of Year 2.
With the same payment and a 2 year fix from (for example Coventry at 2.35%) you will owe 89398.09 at the end of year 2 - thats a saving of approx 3.5k in 2 years.
Or a 5 year fix at 2.95% -- 5k saved at the end of Year 5. (and only 56321.90 needed to bail her out if required then)
Or you pay another product fee out of the "saving" and fix it for another 2 or 5 years if interest rates are still low..
but I understand the "helicopter cash" scenario .. I can totally see it happening to people with mortgages because it is the "right thing to do, to help struggling families in their homes" or something ... As long as you know how much thats actually costing you I guess its a perfectly valid option.
The mortgage is based over 20 years, but it's a 10 year fix, the repayments being approx £658, not sure if that makes it a better or worse decision on your calculations, but would be interested to hear what you think as I've not shown a great deal of interest in it as I'm not paying it (just liable for half of it as my name is on it as well), however you have put the statement "if interest rates are still low" which is the big worry & main reason this has been chosen in these interesting times. All I know is £658 a month for 10 years is more than mangeable, & I'm a big fan of peace of mind over piece of ar5e.
As for bailing her out or me paying cash for the rest of the house & her paying me back with interest, I think that would start the relationship down a road I wouldnt want to go down (eg if interest rates were 9%, I couldnt charge her 9% interest even if I could get that from savings.) This way its as clear cut as it can be in our situation & we'll only annoy each other for the more trivial things in life ......hopefully.
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Congratulations on your buy !
I think its a good idea, the only thing I don't understand is why you feel the need to pay an extra 1% (at least) in interest to the banks in order to fix for 10 years.
I'd have gone for the short term fix and encouraged her to pay off as much as she can in 2 / 5 years... If and when interest rates rise you can then become her lender and she will pay you 4 / 5/ 6 % whatever the rate then will be then, I do believe this would have turned out to be much cheaper for the both of you than fixing for 10 years now .. And it keeps some money off the banks so it can't be bad
I see what you're saying, but I want to hedge against all possibilities, what if IR's are 9% in 7 years time, after a bond collapse or something, she couldn't afford the SVR mortgage she'd then be on, on a house that will be worth vastly less than when we bought (especially if IR's are that high.) She has every intention to overpay as it is (the mortgage is for 112k as she's putting in 20k in deposit)
Also I think it's a good idea to have some kind of a mortgage as it wouldn't surprise me if TPTB decide to throw some kind of helicopter money at "hard working families" with mortgages. especially with an election to contest. I bloody hope not, but something has to give in all this.
Peace of mind is a price worth paying in my eyes. No one has a crystal ball, who'd thought we'd be where we are now even just 5 years ago?
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You did the right thing; and it actually has nothing to do with buying a property. In your situation, it is all about reducing your exposure to cash saving, whether you were aware it or not.
I bought last year, too. Knowing that the purchasing power (as oppose to RPI) of cash is decreasing by 5% - 10% a year, it is frightening to hold loads of cash.
This may sound extreme, but I would suggest hold no more than 1 year worth of salary in cash and turn the rest to something else that have better resistance again inflation, e.g. properties, shares, gold and funds etc. In other words, do what rich people do. See how they protect their money and learn.
Reducing my cash exposure certainly was a factor in the decision, & the cyprus theft certainly spooked me, but I don't believe property is the future either, in fact I havn't a clue what will actually keep up with the manufactored infaltion right now, let alone make a profit.. Cash going down in value, property going down in value, i've a few grand in shares, which i'll keep in but have little confidence in that. Gold is just a sentiment investment in my mind (has very little real use.) I'm just trying to hedge against every possible position the morons in charge decide to take....Something is serously going to implode..I just dont what & this seems to be the best I can come up with with the cards i've got.
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sorry yes, I could buy outright, but instead, im going to cash in half the value of the house from my ISAs...loss- 3% compounded interest.
this is called opportunity cost.
so, cash flow wise, you are down the 3% on your "deposit" ( I hate that word) and the 3.99% on your mortgage.
tis all.
My options are.
1) buy the whole house with my hard earned cash I'm down 250k on a depreciating asset, gf lives for for free, but has no house to call her own
2) I pay half of the house with other cash I have (not in ISA's) , so am £125k down on i believe a depreciating asset but gf pays other half on 10 year fix mortgage @ 3.99% on a house she believes will increase in value. Now I have another 125k currently earning ME 3% tax free which I believe will be higher than 4% a few years down the line mitigating "losses" on her paying 3.99 the previous years plus keeping the tax free status of said 125K. We hopefully both win
You choose!
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You will be sorely missed.
N+P have a fee.
you have forgotten to include opportunity cost on the deposit @ 3%, which actually adds to the total cost of ownership...this is of course unavoidable.
So you are spending 3% and the GF is spending, along with you, another 3.99%, call it 4% so in interest alone assuming no payback its costing you almost double in actual £ notes than you think....in other words, your interest gained is now wiped out by interest lost, and you have added the mortgage debt and interest.
Not sure why, if it was such a good idea, you didnt buy outright...you would need hardly anything then to live on. Instead you go all obfuscated on it only costing you 1% etc etc.
Very strange.
Sorry yes there is a fee of £295 with £200 cashback so a massive £95 I do apologise, I'm not spending 3% I'm getting 3% on my ISA's which is compounded every year all tax free, also I believe that interest rates will be higher in 5 years (let alone 10) on my savings but she'll still be paying 3.99% on whatevers left of the mortgage (can overpay by £10k a year without penalty as well.)
If I thought house prices were fair value I would have paid cash for it, however I don't & don't see why I should take the hit on the whole house on the crash I believe is coming .another reason is the gf not only wants to pay half, but believes the market will go up, so wants in. Also having a mortgage it's not our responsibility to look after the deeds. I'm also hedging against whatever hair brained scheme the government might come up with to keep the party going (MIRAS, free money to clear debts, who knows with the nut jobs in charge but if its ever on the cards I/we want a slice of it.
Oh & the mortgage is costing me nothing, nada, zilch, she's paying it all, I'm just on the mortgage as I have to be (but realise I'm liable for half should it all go Peter tong)
You may think very strange, I think very logical.
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Thanks everyone, it's good to get the views of the people on here, it helps my confidence levels in the decision,I would love to see the whole story out & will still frequent this website (still as addictive as it was in 04) , but the whole system seems so rigged I feel this is the best I can do with the cards I have been dealt.
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How much did you say you earn again?
28K, but OT on top
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yes....but be prepared to take on the mortgage repayments when and if kids come along....jointly and severally liable.
She earns more than me, so I'd be the semi retired Mummy, not that kids are on the horizon, who'd want to bring up kids in the world we're living in today, I don't think it's fair on them to have kids because I want them...................in fact I love my kids so much I refuse to have them, hows that for unconditional love? (Another side to my mental-isms.)
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Hefty fees to get out of these 10 year deals.
And no, SHE isnt paying up for half...you both are.
And you arent married, so a split could be devastating for you, joint names means you cant just walk. She will hurt if you leave YOUR savings in YOUR name only....I would be if i was her.
Lucky old you though, to have 250K in savings....hardly a position of poverty and that puts you in the top 1%.
35,000 other people took on a mortgage along with you.
Why would I pull out I've the money in the ISA's to cover any perceivable eventuality? If I want to move I could become on of those evil buy to letters. Both are our names are on the mortgage but she will be paying it (yes I know that could cause complications, but there will be a deed of trust whereby 75% of the house is mine & once she's paid it off transfer the other 25% to her so we own 50% each (oh & she's putting in 20K deposit). The ISA's that is in her name, is a risk, as it has been for the last 20 years I've been with her but I have control over usernames & passwords for the online account. And yes the mortgage is a repayment which you can over pay by 10K a year, which she intends to do as much as possible, but depends what happens with interest rates.
How will she hurt me if I leave my savings in my name only? The ISA's arnt joint accounts.
Oh & there has been no real luck involved, quite the opposite (lost loads in stock market crash 2000), its just been down to saving hard on a average wage job, lots of overtime equivalent to 6 day week & sadly living with the GF parents for over 10 years (all whilst waiting for the madness to end oh & I'm 42.) However In that time I have travelled the world & not had a sober weekend so its not been a totally wasted decade really, just the stigma of living like Ronnie Corbett in Sorry being the only wounder in the whole set up.
I do still feel like a traitor really, like the regime has won, but what can you do?
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I've given in to the madness & bought. I will be paying £250K for a 4 bed detached (south west) when it was on for £285K (& apparently 310K in 2007) so avoided the ridiculous 3% stamp duty. I could have bought the house cash myself but the gf insisted (I put up no resisitence to that funnily enough) on paying her half, so now I'll pay half cash & I'll go on the mortgage for the other half which she will just pay entirely. The mortgage is a 10 year fix @ 3.99% with no fees, this was the clincher for me to finally give in, as now the rest of the cash is sat in our ISA's paying 3% (first direct for over 40K...still on offer.) so she's effectively paying 1% for the mortgage & if interest rates go up in the next 10 years, it'll pay for itself (don't think we'll start to realise that for the first 5 years but the next 5 who knows) plus I get to keep the tax free status of what was supposed to be the house buying fund originally.
I have a very firm belief that the value will go down hugely eventually but over many years & none of us are getting any younger (she obviously thinks it will go up based on absolutely no facts, but we've just agreed to disagree.)
Have I completely sold out or does this seem like a no brainer for a hedge against these interesting times we live in (FFL, homebuyers schemes, threat of legalised theft from savings accounts a la Cyprus (even though QE , inflation is doing that anyway) etc etc?
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I know this is on another thread but thought this deserved a thread of its own as I frankly cannot believe it & sets a very scary precedence, how can that even be legal?
http://www.bbc.co.uk/news/business-21797888
membrane
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Where does it say that any help will be for 30 & under only in his speech, from what I've read (& it's easy to glaze over when reading this kind of tripe) he only mentions what the average age is, has the mail just made that bit up.
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I've lived with my partner for over 10 years & I do trust her, she's holds many K's of my money already (ISA allowances & unit trusts) admittedly money that I could just withdraw as I have her log in details, but I think I'm just cautious of killing the goose that lays the golden egg really & being paranoid, but I've seen so many people commit & lose out badly, I don't want to be another victim, I'm not nave to think I just struck lucky. Still not sure about the offset mortgage as is like to buy another house outright to let out, once they are fair value (several years from now if form is anything to go by.) love to hear others points of view, see if I can make some sense of it all.
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There is an option i just thought of which will eliminate your mortgage liability.
Follow the below, your legal advisor will able to expand on the wording to make it fancy..
1) Have the following burden stated on the land registry deeds “No sale by a sole proprietor or trust corporation, without court order”
2) Have the following burden placed on the land registry deed “No sale of the subject property without prior written permission from YOUR NAME AND ADDRESS”
3) Place a Charge on the property for your 50% Contribution and the amount in £.
4) Make a Deed of trust with your girlfriend that you shall state your 50% contribution plus ½ of any uplift of the property.
Now you can freely place the property in only your girlfriends name,, and state her as the trustee of the estate, this way you go not take any legal liability for the loan on the property from the bank but also you have protected your financial interests. Even if your girlfriend was unable to pay the mortgage in the future or was made bankrupt your interests in the property would be legally protected.
Regards
Hmmm thanks for that, feel a little google time coming on
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have seen too many friends thrown out of their houses..
You ll have to think if/how the situation changes if:
-you have a kid
-you need to get married
I would buy outright and suggest to her that she does not have to pay rent to you, so she can save to buy her own property..
If I buy outright I'm circa £125k (won't pay more than £250k cos of the stamp duty theft) down from the start let alone what I'd lose on any interest should the banks start paying any again & remember I believe houses have a lot further to fall hence my reluctance to buy outright which was my original plan, besides I'm not planning on a split (we've suffered each other for 20 years already)
Also with your suggestion of buying outright, if we did have kids, I couldn't chuck them out of MY house, so I'd lose all.
Basically I'm not buying outright because they do not represent value (not even close) & just because I can don't see why I should fund entirely something I believe is seriously going to lose value, but I'm happy to 'lose' half. If I were the biggest bread winner in the relationship It may be slightly different. She wants to pay half & is more than happy with deed of trust or whatever, but as I like you know too many people thrown out, so just nervous being my first buy etc etc . I know it's impossible in today's would, but I just want fairness ....greedy arn't I?
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I have a few suggestions which you could explore.
1) Buy the property outright in your name, Have your girlfriend pay towards the house to you including the rate of interest she would have paid if borrowed, every time she has contributed and cleared 10% of the property value, add a charge on the property land registry paperwork reflecting her contribution.
2) As someone mentioned pay towards the property but minimum, have the remainder borrowed offset aginst your savings with the bank, hence your money safe, and just have your girlfriend pay you her portion of the interest for ½ the property.
3) Buy the property in both your names however have your 50% placed as 1st charge on the land registry deeds, and ringfence the charge in a limited company, hence that money would have to be paid first before the property is every sold, only the surplus would be shared between the owners.
4) You can have the property in both of your names, but have an external Deed of trust document making your external agreement with your girlfriend, have this notaries and hold 2 copies one for each. So when ever it came time to sell it would state that the capital in the property was paid by you, hence only the surplus is divided.
There are various ways you can do this, however as for the loan on the property from the bank as someone mentioned it will be secured against the property and not an individual and hence the bank will always get paid before any other charges on the deed are paid.
Thanks for that, I realise any loan is secured against the property & they'll get paid first, I'm just struggling to get my head around something which should be simple, I just want to walk away with half of the house value at the time. it shouldn't be difficult but yet seems to be. Deed of trust seems to be the way forward I think, but I'll look into offset mortgages, there's something else I don't understand. Thanks for the advice.
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If she's the right person to buy a house with I'd stop worrying about the cash, and just enjoy your lives together.
If you're worried about the security of your money, then (1) definitely speak with a solicitor about the financial arrangements related to the property, and (2) are you sure that buying together is the best idea?
Whichever you decide, focus on what's valuable in life - it isn't always the cash....
Your right of course, it's just piece of mind for everyone, she may want to boot me out. Better these things are laid out then everyone knows where they stand, so any parting can be as amiceable as possible, seen too much bitter & twistedness over the years & can't be doing with it. I'm more interested in the legalities (for her to get cheapest mortgage as well), as I said don't mind losing whatever on my half whenever.
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I'm not worried about selling or losing however much of my half should it all go pear shaped, I just don't want to be left with a mortgage on a house that will probably have lost money & be forced to pay for the whole house, happy to sell at a loss from my "half", just dont want to be liable for the other half.
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I'm thinking about buying a house with my girlfriend (yes I know what's going to happen, but hear me out.) I'm in the lucky position to be able to buy outright & until recently the GF was unaware of this, when I told her that I would buy us a place outright when the price was right she said she didn't want that as she would never see the house as hers (yeah I know she's a keeper!)
So now I'm in a position where as far as I can see I may as well buy (because a) I've saved half the cost of the overinflated house I'm buying &
she can get a mortgage for practically what I'm getting in savings on the rest.) My question is how does this work legally as I want to buy my half with cash & her half as mortgage/part deposit, but obviously want her to get the cheapest deal with my half as part equity. We want a setup where should things go Pete Tong I can walk away with half of the value of the house (however much more/less that is so don't mind sharing that risk) but I don't want any of the mortgage burden should it be in negative equity. Hope that makes sense.Regards
Membrane
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Stick with paper money and you will have your wealth wiped out and you will have no options.
How with no wage inflation, unless you're suggesting the Armageddon scenario in which wealth will be the least of anyone's worries
Transfer Of Charges On A House
in All about buying, selling and mortgages
Posted
We're in the process of buying our first house, but the stumbling appears to be a transfer of a charge (loan for his estate agency business) from the house we are buying to the sellers new home. This appears to have been dragging on for about 4 weeks now & unfortunately the owner is the estate agent, we've been fobbed of for a number of excuses the latest has been that the cheque the company sent to transfer the charge was for the wrong amount & will take another 7 to 10 days does this sound fishy , do they even send cheques any more pram I just being sceptical because its an estate agent & they know we know nothing of the process?
Thanks in advance
Membrane