Jump to content
House Price Crash Forum
Sign in to follow this  
themarbleman

Newb Question

Recommended Posts

Apologies for the simplistic nature of my question.

Im a FTB in the East Midlands, originally with the idea of purchasing a Flat but now have decided to get a joint place with a life long friend.

Our joint income equates to £56k

The house we've seen is close to a city centre and universities and appears to be below average.

It's a 4/5 bed terrace in which the current owner had bought for her period of university studies.

Our idea is to live in a room each and rent out the other two rooms and keep the 5th bedroom as an etra reception room.

The house is priced at £109.950 having been just reduced from £116k and has now had considerable interest.

Despite having done as much research as possible on mortgages and the housing market im still in two minds whether to go ahead if our offer is accepted and what type of mortgage to get. We have no cpital for a deposit so looked at unsecured borrowing to put down 5%.

I was advised that having part for part repaymnt (25%) and interest only (75%) would be worthwhile. Can some one confirm or advise

Anyway your thoughts and guidance would be much appreciated.

Thnaks

Share this post


Link to post
Share on other sites

hey sucker, wanna buy a bridge?

Nice well thought out answer – maybe he has to buy – I’m sure that he does not want to pay sky-high prices

Although it seems cheap to me and well within his reach – I personally if I had to buy I would go for the simplest mortgage best value 100%

Edited by look to the past

Share this post


Link to post
Share on other sites

A forced buyer? OMG - it really is diiferent this time LOL. :lol::lol:

Themarbleman: Getting serious here... Why are you thinking of buying? Can't you find something nice to rent for much cheaper? Any type of "interest only" mortgage is a very bad idea as you are simply renting from the bank. I have never heard of doing an interest only/ repayment split as you describe. It sounds like another act of desperation from the lender....

Who told you the place was generating "significant interest", the estate agent? Oh dear... Not really known for their honesty and integrity are they?

Good luck with whatever you decide to do....

Share this post


Link to post
Share on other sites

Firstly - your decision to avid flats in Nottingham is

a good one - they are crap, overpriced, and in oversupply.

(Last time I was there it seemed like the entire Lace Market has

been converted to flats, and they are still building more).

109k coudl be a good deal, it really depends where it is.

Avoid Beeston - crime central!

It sound slike you knw the owner - you should find out how

much they paid for the property,and what improvements

have been made.

the fact that it has been reduced would indicate the market is falling,

this type of property is very popular.

I wonder how much of the 'interest' is being invented to try and

force your hand.

It would be usefulif you could tell us a bit more about location and type/age

of the house.

Also, (assuming your salary is half the total) have you considrered

buying it outrightyourself, and renting space to your friend?

It simplifies things a lot when you come to move on.

Lack of a deposit will limit your options, though saving £5k or even £10K

would help you a lot.

ABB

Share this post


Link to post
Share on other sites

Don’t you know – all estate agents in that area have guns ! :lol:

That'll be the next step of our economic miracle. ;)

We've had the "lie to buy" mortgage which is not working anymore... So the next one will no doubt be (and remember you heard it here first folks.....

Buy or Die Mortgage

:lol::lol::lol:

Share this post


Link to post
Share on other sites

Apologies for the simplistic nature of my question.

Im a FTB in the East Midlands, originally with the idea of purchasing a Flat but now have decided to get a joint place with a life long friend.

Our joint income equates to £56k

The house we've seen is close to a city centre and universities and appears to be below average.

It's a 4/5 bed terrace in which the current owner had bought for her period of university studies.

Our idea is to live in a room each and rent out the other two rooms and keep the 5th bedroom as an etra reception room.

The house is priced at £109.950 having been just reduced from £116k and has now had considerable interest.

Despite having done as much research as possible on mortgages and the housing market im still in two minds whether to go ahead if our offer is accepted and what type of mortgage to get. We have no cpital for a deposit so looked at unsecured borrowing to put down 5%.

I was advised that having part for part repaymnt (25%) and interest only (75%) would be worthwhile. Can some one confirm or advise

Anyway your thoughts and guidance would be much appreciated.

Thnaks

When the crash gathers momentum East Midlands will be hit hard as it is definielty on the "less desireable" list. 109k may sound like a bargain at or near the top of the market but I would give it a couple of years and rent a nicer house for less than your potential mortgage for awhile. If the house is former BTL don't touch it as it shows that the rental property market is collapsing and these types of homes can only get cheaper.

Flats generally look like being a very poor investment in the years ahead:

http://portal.telegraph.co.uk/property/mai...7/ixptop12.html

The souring of the inner-city dream has left a glut of empty, new-build apartments, affordable to few and situated in communities bereft of families. What now for the super-cool, urban living space that stands empty? Caroline McGhie reports on a post-Sipps nightmare

Share this post


Link to post
Share on other sites

Apologies for the simplistic nature of my question.

Im a FTB in the East Midlands, originally with the idea of purchasing a Flat but now have decided to get a joint place with a life long friend.

Our joint income equates to £56k

The house we've seen is close to a city centre and universities and appears to be below average.

It's a 4/5 bed terrace in which the current owner had bought for her period of university studies.

Our idea is to live in a room each and rent out the other two rooms and keep the 5th bedroom as an etra reception room.

The house is priced at £109.950 having been just reduced from £116k and has now had considerable interest.

Despite having done as much research as possible on mortgages and the housing market im still in two minds whether to go ahead if our offer is accepted and what type of mortgage to get. We have no cpital for a deposit so looked at unsecured borrowing to put down 5%.

I was advised that having part for part repaymnt (25%) and interest only (75%) would be worthwhile. Can some one confirm or advise

Anyway your thoughts and guidance would be much appreciated.

Thnaks

Not sure that I believe this post.

Anyway, if it is genuine, then my suggestion is that you are not in a position to buy at the moment. An interest only mortgage without a cash deposit is financial suicide. I would suggest that you save up a deposit and rent a cheap flat or a house with your friend in the meantime. It would probably work out cheaper than the cost of financing this place and much less risky.

Share this post


Link to post
Share on other sites

...and welcome to HPC themarbleman.

Best advice I can give?

Do a lot of research.

Take advice from people you trust (dont include bank managers, estate agents or other Vested Interests).

At first glance, I would suggest that your plan for buying is a bit complicated.

It seems to depend on others (renting rooms) for its success.

If im reading you correctly, you also need the assistance of a friend and you dont have any deposit.

Some questions you should ask yourself -

If your plan to rent rooms failed could you afford the mortgage?

What arrangements have you made with your co-purchaser in the event that one of you wants to sell?

Can you manage to pay a mortgage and make the repayments on the deposit loan at the same time?

Have you priced in the costs of surveys, solicitors, estate agents, repairs, moving?

Above all though, be sure that when you make a decision, its your decision.

Best of luck with whatever you decide to do.

Edited by needle

Share this post


Link to post
Share on other sites

The other question is, what happens when you or your friend want to move out? Particularly if you have an interest-only mortgage with 20/30/40k of negative equity?

Can you afford to buy them out? Can you cover 20k of negative equity if you have to sell in a crash?

I don't know of a single case where buying with a friend hasn't been a disaster for that very reason -- at some point one wants to sell, the other doesn't or can't afford to -- though I'm sure it must have worked sometime, somewhere. I'd never do it myself.

Share this post


Link to post
Share on other sites

why cant people save 5k on 25k salary?

i hear all these people come on here talking of earning 500 pounds a week and not having anything saved at all.

before you buy any house you should sort out why you cant save 100 pounds a week on a 500 week salary.

its this ability to learn how to economise and save that makes all the diffrence in the end, people that have saving attitude to life are the ones able to ride out any financial ups and downs in the future, its the living from month to month brigade that fall on there ass.

one part of the equation is what you earn the other is what you spend.Thats why there are people on 15k better off than people on 25k

learn to use your money right and its as good as a pay rise.

Share this post


Link to post
Share on other sites

I don't know of a single case where buying with a friend hasn't been a disaster for that very reason -- at some point one wants to sell, the other doesn't or can't afford to -- though I'm sure it must have worked sometime, somewhere. I'd never do it myself.

Correct. A terrible way to lose a good friend.

Apologies for the simplistic nature of my question.

Im a FTB in the East Midlands, originally with the idea of purchasing a Flat but now have decided to get a joint place with a life long friend.

Our joint income equates to £56k

The house we've seen is close to a city centre and universities and appears to be below average.

It's a 4/5 bed terrace in which the current owner had bought for her period of university studies.

Our idea is to live in a room each and rent out the other two rooms and keep the 5th bedroom as an etra reception room.

The house is priced at £109.950 having been just reduced from £116k and has now had considerable interest.

Despite having done as much research as possible on mortgages and the housing market im still in two minds whether to go ahead if our offer is accepted and what type of mortgage to get. We have no cpital for a deposit so looked at unsecured borrowing to put down 5%.

I was advised that having part for part repaymnt (25%) and interest only (75%) would be worthwhile. Can some one confirm or advise

Anyway your thoughts and guidance would be much appreciated.

Thnaks

BTW. If you do buy, please tell me where it is because I'll be there to snap it up at 20% of what you paid for it when it is repossessed. :)

Share this post


Link to post
Share on other sites

Apologies for the simplistic nature of my question.

Im a FTB in the East Midlands, originally with the idea of purchasing a Flat but now have decided to get a joint place with a life long friend.

Our joint income equates to £56k

The house we've seen is close to a city centre and universities and appears to be below average.

It's a 4/5 bed terrace in which the current owner had bought for her period of university studies.

Our idea is to live in a room each and rent out the other two rooms and keep the 5th bedroom as an etra reception room.

The house is priced at £109.950 having been just reduced from £116k and has now had considerable interest.

Despite having done as much research as possible on mortgages and the housing market im still in two minds whether to go ahead if our offer is accepted and what type of mortgage to get. We have no cpital for a deposit so looked at unsecured borrowing to put down 5%.

I was advised that having part for part repaymnt (25%) and interest only (75%) would be worthwhile. Can some one confirm or advise

Anyway your thoughts and guidance would be much appreciated.

Thnaks

4/5 bed for just over £100,000??

Really.. are you sure, only it would be three to four time that in Devon..

there is no bubble to bust if a large family home costs that much.. not in that house

Share this post


Link to post
Share on other sites

4/5 bed for just over £100,000??

Really.. are you sure, only it would be three to four time that in Devon..

there is no bubble to bust if a large family home costs that much.. not in that house

Well, i was brought up there - there are large areas with 2/3 storey

late victorian seims and large terraces that can easily have 4/5 beds.

Equally, the same money can get you a two bedder in a somewhat nicer

area...just depends on the suburb. IIRC the west side of Nottingham is the

less desirable (on average)

ABB

Share this post


Link to post
Share on other sites

Not sure that I believe this post.

Anyway, if it is genuine, then my suggestion is that you are not in a position to buy at the moment. An interest only mortgage without a cash deposit is financial suicide. I would suggest that you save up a deposit and rent a cheap flat or a house with your friend in the meantime. It would probably work out cheaper than the cost of financing this place and much less risky.

I second this post. On £56,000 income you should be able to save £1,000 pcm EACH with no problems whatsoever. In 10 months you will have £20K which is about 15% deposit. Borrowing with a LTV of 85% or 80% if you can save harder will get you better deals.

ONLY FOOLS RUSH IN! SAVE LIKE EVERYONE ELSE AND THEN GO IN WITH A GOOD DEPOSIT.

This November I expect the bubble bursting will be everyday news and I expect the demise will gather momentum!

TB

Share this post


Link to post
Share on other sites

why cant people save 5k on 25k salary?

i hear all these people come on here talking of earning 500 pounds a week and not having anything saved at all.

before you buy any house you should sort out why you cant save 100 pounds a week on a 500 week salary.

its this ability to learn how to economise and save that makes all the diffrence in the end, people that have saving attitude to life are the ones able to ride out any financial ups and downs in the future, its the living from month to month brigade that fall on there ass.

one part of the equation is what you earn the other is what you spend.Thats why there are people on 15k better off than people on 25k

learn to use your money right and its as good as a pay rise.

My sentiments exactly. I was wondering if anyone had noticed these glaring statement... Our joint income equates to £56k ... We have no cpital for a deposit so looked at unsecured borrowing to put down 5%.

How anyone can not save on such income levels above the average salary I just dont know.

I can only go by my own, somewhat fortunate experience. I manage to save a considerable amount each month. So much that when I started looking a couple of years back I have £5k as a deposit on my own and now with my partner we have £50k.

I have to say that even with a decent deposit I am reluctant to buy my first home. Although having saved so much I am eager to buy, but I'm not that brave.

My 2 pence worth, save yourself a deposit and buy yourself time to see how the market will fall.

Share this post


Link to post
Share on other sites

For what it's worth, awhile ago we went to look at a "bargain" house.

We were not sure of the area. The EA said he couldn't give his opinion but gave us a no. for police crime stats. The lady was very helpful advising how many violent crimes in the past x months etc.

It was very useful info as the area was a nightmare! - Sorry I can't remember the no. though.

Share this post


Link to post
Share on other sites

Apologies for the simplistic nature of my question.

Im a FTB in the East Midlands, originally with the idea of purchasing a Flat but now have decided to get a joint place with a life long friend.

Our joint income equates to £56k

The house we've seen is close to a city centre and universities and appears to be below average.

It's a 4/5 bed terrace in which the current owner had bought for her period of university studies.

Our idea is to live in a room each and rent out the other two rooms and keep the 5th bedroom as an etra reception room.

The house is priced at £109.950 having been just reduced from £116k and has now had considerable interest.

Despite having done as much research as possible on mortgages and the housing market im still in two minds whether to go ahead if our offer is accepted and what type of mortgage to get. We have no cpital for a deposit so looked at unsecured borrowing to put down 5%.

I was advised that having part for part repaymnt (25%) and interest only (75%) would be worthwhile. Can some one confirm or advise

Anyway your thoughts and guidance would be much appreciated.

Thnaks

You sound young, perhaps a student or just graduated from Nottingham and fancy staying in the area ?

If I'm right, and you are young - then I can forgive your naivety. Otherwise you are a dickhead or a troll

Just some pointers - the house is cheap because there is a problem with it - find out what this is.

If you intend to pay the deposit on a credit card - then make sure you have 0% for an extended period of time and also that you have the cash to pay it all off at the drop of a hat anyway.

Yes, it makes sense to get other people in to rent and you can cover the mortgage anyway if you earn £56k between you, so this shouldn't be a problem.

The house should be as tenants in common from a legal point of view and should define the % of the property you both own.

You need a proper contract between you and your friend which outlines who is responsible for what costs and under what circumstances

.. ahh, I've had enough, go on buy it !

Share this post


Link to post
Share on other sites

Hi Marbleman

If you want to buy then go for it but I would not buy with your mate, thats a recipe for disaster. If you are paid £25000 pa you should easily get a £87500 mortgage (3.5*£25000), if you are looking in Nottingham there is quite alot of 2/3 bedroom houses for that price round there.

Perhaps you could rent out a room to your friend??

Good Luck

T1

Share this post


Link to post
Share on other sites

Apologies for the simplistic nature of my question.

Im a FTB in the East Midlands, originally with the idea of purchasing a Flat but now have decided to get a joint place with a life long friend.

Our joint income equates to £56k

The house we've seen is close to a city centre and universities and appears to be below average.

It's a 4/5 bed terrace in which the current owner had bought for her period of university studies.

Our idea is to live in a room each and rent out the other two rooms and keep the 5th bedroom as an etra reception room.

The house is priced at £109.950 having been just reduced from £116k and has now had considerable interest.

Despite having done as much research as possible on mortgages and the housing market im still in two minds whether to go ahead if our offer is accepted and what type of mortgage to get. We have no cpital for a deposit so looked at unsecured borrowing to put down 5%.

I was advised that having part for part repaymnt (25%) and interest only (75%) would be worthwhile. Can some one confirm or advise

Anyway your thoughts and guidance would be much appreciated.

Thnaks

who can say they can call the bottom of a falling market?..i can't but i will not be buying until i know the bottom has been reached. i don't mind losing a few grand by missing the bottom but i'd hate to to lose those thousands before it bottomed out.

marbleman..letting rooms out in a house is a pain and and a grind...you won't believe me until you've done it for a few months...listen to the excuses and whines and drivel and live in the mess and filth, with no rent and no help with the bills...it won't be long until you will be buying a roll of black bin bags and chucking your "friends" out on the street.

you are getting a lot of good advice...for the same price that you will have to payi f you buy, you could rent your own place and be responsible for your own life......listen carefully...the advice is good...and it is given with concern and kindness, for free, to you...that's rare...enjoy...

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.