Own Home Scheme Pros and Cons

superfran_uk

tek-monkey wrote: »

Sorry, what exactly do you mean by this? Do morgages forbid you renting a room out? Why? I want my own place, I rent with my brother, are you saying he couldn't move with me? Would be stupid if so, they'd need to dish out 2 loans to help us both rather than just 1. Every place I've lived in has had a mortgage on it, and I've rented it out?

You need a "buy to let" mortgage if you are going to rent your house out (without you in it), if you just want to rent a room out then you would still need your mortgage company's permission (I believe - read more threads in this forum). On top of this you would have to declare any income for tax purposes and obviously pay the tax on it.

tek-monkey

skoods36 wrote: »

The reality is that all of us using this forum need Ownhome, whether we earn £15k p.a. or more. To say you should just get a another job is not living in the real world at all and not helpful, and why should someone earning £15k not have the right to buy a house? There have been spiteful replies from this person for a while now and I really wonder why? Can we keep it positive please??

Everyone has the right to buy a house, if they can afford it. I earn £22k and am single, and I am questioning if I can afford one. On £15k there is no way I could get anything I wanted, even without debts and my pension that would mean 15x4.5 (best the co-op will do for a single person) so with a full 40% equity loan that'd be about £105k? Round here thats a 2 bed semi or a 3 bed fixer upper. Not that I'd want to fix it up, as they'd own 40% of any increase in value. So it'd have to be a house I was happy with from the start, which there aint many round here for that price. It would also mean the mortgage/bills/council tax/water/insurance etc. I'd be pushing £800 a month or so, leaving me little to live on. I'd be too scared of the interest rates going up to put myself in that situation.

Its not condescending, its mathmatics. I'd be too close to not affording it to take that risk, especially with rates currently at rock bottom. If someone wants to take that risk though, its their decision. I'd advise not to, but I'm not a financial advisor.

tek-monkey

superfran_uk wrote: »

You need a "buy to let" mortgage if you are going to rent your house out (without you in it), if you just want to rent a room out then you would still need your mortgage company's permission (I believe - read more threads in this forum). On top of this you would have to declare any income for tax purposes and obviously pay the tax on it.

Thanks for that. Hadn't really considered the tax implications (stupid I know), can't even fart in this country without the gov wanting a share. It'd be renting a room with me in residence, do the mortgage co's look down on this then? You'd think the extra income would be welcomed as you'd be less likely to default.

superfran_uk

skoods36 wrote: »

I agree with the above. People obviously use this forum to get information and support on a big decision in their lives. Unfortunately a nasty and judgemental attitude from one user in particular is common and for some biizarre reason this person has been placed on pedestal as the sage of all knowledge. The reality is that all of us using this forum need Ownhome, whether we earn £15k p.a. or more. To say you should just get a another job is not living in the real world at all and not helpful, and why should someone earning £15k not have the right to buy a house? There have been spiteful replies from this person for a while now and I really wonder why? Can we keep it positive please??

The only reason I have posted here is to offer realistic advice as someone who has been through this scheme as a FTB, as it has been a long slog and I have had to carefully research it every step. There is no point in a 'yeah, go for it!' attitude if it's unrealistic, because then following that you get all the 'this scheme SUCKS' posts. The 'get a new job' thing was not a flippant comment, it is what I had to do. Play the waiting game, retrain, move up the ladder at work, earn a bit more and pay off my debts. I know 100% that on 15k combined income we would not have been eligible for this scheme The disappointment when people are rejected is horrible, read back through the posts. There is little point setting them up for a fall.

superfran_uk

tek-monkey wrote: »

Thanks for that. Hadn't really considered the tax implications (stupid I know), can't even fart in this country without the gov wanting a share. It'd be renting a room with me in residence, do the mortgage co's look down on this then? You'd think the extra income would be welcomed as you'd be less likely to default.

You can rent out a room under a government scheme and earn up to about 4grand a year (you can goolgle it for the exact amount!) tax free. You could possibly share bills etc on top... But again you would have to let your mortgage company know. I would ask the co-op directly, it's a quick free phone call - will save a lot of hassle down the line.

tek-monkey

superfran_uk wrote: »

You can rent out a room under a government scheme and earn up to about 4grand a year (you can goolgle it for the exact amount!) tax free. You could possibly share bills etc on top... But again you would have to let your mortgage company know. I would ask the co-op directly, it's a quick free phone call - will save a lot of hassle down the line.

Thanks again. I'd earn a lot less than that, I'd prob only charge him £200/month, it'd just be to help out a bit. I won't bother with the co-op yet, as my call from ownhome is still over 2 months away minimum it would seem! I'll just wait for their call and discuss options with them, no point getting too involed when for all I know funding will have gone by the time I get a look in.

coffeedog

Surely the purpose of these threads is to support and inform people, not to make their decisions for them?

wildgill

A valued point Superfran.............but unfortunately, with the best will in the world nothing is set in concrete and even if a person earns a decent wage now, does that protect them from unfortunate circumstances in the future. I could be earning 50k now, still qualify for Ownhome, be made redundant next week, seriously reducing my income. A priorty would still be to keep the roof over my head.

I hope everything goes well for you as you must be itching to move into your new home.

superfran_uk

wildgill wrote: »

A valued point Superfran.............but unfortunately, with the best will in the world nothing is set in concrete and even if a person earns a decent wage now, does that protect them from unfortunate circumstances in the future. I could be earning 50k now, still qualify for Ownhome, be made redundant next week, seriously reducing my income. A priorty would still be to keep the roof over my head.

I hope everything goes well for you as you must be itching to move into your new home.

Earning a million quid a a year does not protect a person from anything, but it's surely a better place to start from than struggling from the word go?

On our joint income, we should be able to save enough while paying the mortgage to cope for a while in case that ever happens, although we could technically live on one wage for a while if need be. It wouldn't be fun, but it would be manageable.

I think the point I am trying to make is as tek_monkey made above far more succinctly - yes everyone has the right to buy a home, if they can afford it. I have only decided that I can afford it very recently, and I am very surprised that someone on a joint income of 15k would think they could. I would like to know how!

paperab

superfran_uk wrote: »

It would depend on the surveyor. If he says it's a bedroom then it will be a no no from ownhome and you will have wasted the survey fee.

Every room at 2nd or 1st floor is considered a bedroom (even an additional bathroom) because (do you remember?) there was a dispute with the introduction of the HIP for homes for less than 4 and 3 bedrooms. Someone argue that where you can fit a bed then this is a bedroom.... but this is simply not TRUE or it was true only for home information pack matter.

So the surveyors are in the same position of everyone: who knows ? A room in the loft whit half part unusable because not high enough is still a bedroom ??

In any case, please kindly understand, a ROLE, based on surveyor OPINION is not a role it's a stupid joke (what happens if the surveyor is my friend ???).

I think GB deserve a better legislation then....