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    • Silence101
    • By Silence101 3rd Aug 17, 4:27 PM
    • 290Posts
    • 439Thanks
    Silence101
    Half a house
    • #1
    • 3rd Aug 17, 4:27 PM
    Half a house 3rd Aug 17 at 4:27 PM
    So we're applying for a mortgage for a shared ownership. IF it goes ahead I want to try and overpay a little every month and save up for the deposit for the 2nd half.
    If it doesn't go ahead I want to save up more deposit. Either way I need to try and stay accountable!

    I was thinking of dividing our spare monthly cash in 4 (after bills and food etc)
    a) 1/4 to overpay mortgage
    b) 1/4 to save towards deposit
    c) 1/4 to save for emergency fund etc
    d) to spend

    If the mortgage doesn't work out I'll be putting a+b towards a deposit to improve our LTV rates.
    Is it a realistic division or would you add more categories, like home improvement?

    UPDATE (p8)
    We have got the keys! I'll update some more once we have all the paperwork sorted.
    Last edited by Silence101; 27-09-2017 at 7:24 PM. Reason: We've bought the house!
Page 13
    • michelle09
    • By michelle09 11th Nov 17, 11:46 AM
    • 395 Posts
    • 1,466 Thanks
    michelle09
    I think SO is good for people who can't get on to the housing ladder any other way but it has a lot of pitfalls. (Our house is former SO but when we bought they did a simultaneous staircase to 100% and then transfer of the freehold with the money we paid). Sometimes it doesn't pay to staircase - our neighbours are at 75% and would have to buy the remaining 25% which would cost 100k. They pay £200/month in rent and getting a mortgage would be difficult (they're sort of retired) and may cost nearly that much in interest.

    I guess it's best to focus on your current mortgage and then worry about the rest?
    • Silence101
    • By Silence101 11th Nov 17, 2:19 PM
    • 290 Posts
    • 439 Thanks
    Silence101
    I've thought about it, and actually most of the moves lately have been for my husband's jobs (as I'm home looking after the girls). And this last move here was all to do with my husband. I had no interest in buying a house until I had a job, as it really restricts my options, and I think we're in a ridiculous position now where we've bought a house we'll never be able to pay off in its entirety. There was a lot of arguments here, probably the worse arguments we've ever had about moving. I've never had an issue wherever we've lived, going wherever we needed to for jobs, but this house purchase has really tested us. And financially I still don't know if it's made sense to buy here.
    If it were up to me, we would have never bought a S/O. It's less risky to rent forever than to buy an S/O where if there's rent arrears you could not only lose the house but also any shares you've previously bought. On the plus side, at the moment, the rent and mortgage combined is cheaper than local rents, but that's only because we had a huge deposit to put into it.
    We've been told that if we plan on selling the house at some point it might be better to keep our shares as they are as people looking to buy a S/O tend to want to buy less shares (as it's more affordable) instead of us buying more and then not finding a buyer who can afford the shares we've bought, if you see what I mean. So that's another thing to consider.
    At the moment, getting rid of the current mortgage is my goal, and then we can decide what we're doing about the rest of the house. I imagine it's going to take us 15/20 years to get rid of the mortgage if we can keep doing healthy OPs, while saving simultaneously, to give us more options when the time comes.
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £176.54/£100
    • daisy 1571
    • By daisy 1571 11th Nov 17, 6:12 PM
    • 156 Posts
    • 1,941 Thanks
    daisy 1571
    Ah jobs, of course, I didn't think of that one.

    It's so interesting what you say about these share scheme houses. I've seen them advertised of course and thought, without really thinking about it at all, they were designed to help people. I should have thought further about it rather than face value (as i usually do about things, not sure why this one escaped me) - companies rarely do something to help others if they are not also helping themselves.

    I didn't realise that 'your' shares also translate into what the next person has to buy. I think I must have thought the ones advertised were coming direct from the housing association. I thought when you wanted to sell you would sell back to association and then they would sell on.

    Taking all that into account, you probably still have done the right thing. You have somewhere that you are happy to live in just how, you are saving on what you would have rented monthly and perhaps when it is time to sell you will be able to sell for more than you bought but at least getting your deposit back out of it.

    If there is ANY possibility that you could lose it by having rent arrears I think you are really sensible to be saving as well as overpaying so you know you can pay mortgage and rent should anything happen to the job. That will help you both feel more secure if that was an issue when buying.

    It seems it will only make sense to buy more shares of you know you are going to content to stay there until you own the whole thing outright. Then you will be selling to the 'normal' market rather than to those that want smaller shares.

    Well done for how far you have already got in only a few weeks of living there

    Daisy xx
    "Never save something for a special occasion. Every day in your life is a special occasion" Take hold of every moment by anon

    The difference between what you were yesterday and what you will be tomorrow is what you do today
    • Silence101
    • By Silence101 11th Nov 17, 10:34 PM
    • 290 Posts
    • 439 Thanks
    Silence101
    Thanks! I go through phases of thinking this is an OK deal, at least we know what we signed up for, and panicking about the whole thing. Hopefully the feelings will settle and we'll be happy here. I think the plan (if jobs etc go well) we'll be here until youngest finishes primary school at least. As she's not even 3 we've got a while yet!
    We're also OPing as much as we can now before the rates go up. I'm not sure what deals will be available in 2 years time, but maybe by then I'll have a job and we should have made a good dent into the mortgage compared to the initial timeline.
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £176.54/£100
    • Silence101
    • By Silence101 13th Nov 17, 4:37 PM
    • 290 Posts
    • 439 Thanks
    Silence101
    School photos... cute but oh so expensive. I think this might be one of the last we buy, as the cost just gets more and more ridiculous by the year. We'll have to try and do some ourselves instead (although I don't know if it'll be any cheaper in the end, and the photographer does take good pictures!)
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £176.54/£100
    • Silence101
    • By Silence101 17th Nov 17, 3:04 PM
    • 290 Posts
    • 439 Thanks
    Silence101
    We've managed another £100 OP. I'm hoping that by the end of the year we'll have paid off £1000 of capital from the mortgage amount. I'm not sure how much we'd need to OP next month to make that happen as I'm still trying to figure out how the interest works. I think it might just be a £40 OP needed. We'll have almost matched our capital repayment in OPs if we plan carefully.
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £176.54/£100
    • Silence101
    • By Silence101 18th Nov 17, 12:08 PM
    • 290 Posts
    • 439 Thanks
    Silence101
    Spreadsheet
    I've finally made a spreadsheet to see how quickly the OPs have an impact. If I've calculated it right, our OPs so far have saved us £0.02 a day in interest.
    I'm not sure how to do a savings spreadsheet as we might have to dip in our savings, so it's unlikely to be a constant up curve. But I'll keep matching our OP payments to our savings until we reach the £5000 emergency fund amount. After that we might put more into the mortgage, to try and get rid of it quicker. We had a shock to see that once we're out of our fixed period and if we can't find a similar interest deal, we will be paying £8 a day on interest! That's if it's on 3.99% so quite high compared to current rates, but still low compared to the 8% or 15% from years ago.
    And I'm not sure how interest rates affect the rental part. The lease showed the calculation of how they come up with the rental increase, but to say it was confusing would be an understatement. Similar to "if A = B, then C is 2xDxE, but if A > B then C=2xD/30+Y." So all we really know if it'll go up year on year, just not sure how much by. And the service charge will also probably go up quite a bit once they've opened up the whole estate.
    But I've been looking and most rental properties in the area, for similar properties (house 2 beds) are £825 a month. That's £100 more than what we were paying in the last property, and over £250 than we are paying now. I'm not sure how likely we'd be able to OP that amount monthly but it's my aim to try and match current rental rates so that if we ever have to rent again we are used to paying similar amounts.
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £176.54/£100
    • Silence101
    • By Silence101 20th Nov 17, 5:38 PM
    • 290 Posts
    • 439 Thanks
    Silence101
    I had to buy new school shoes for the eldest as she managed to make holes in her old shoes and had been walking with puddles in her shoes. The new shoes were half price so I was happy with that (although having to walk past all the dressing up clothes and toys to get to the tills was a frustrating experience, as I had to keep reminding the girls we only came for the shoes).
    It’s the one thing that we can’t pass down from the eldest to the youngest as she wears out the shoes in a very uneven way.
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £176.54/£100
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