Natwest one account.

magicdogsbrain

Another very good thing about offsets worth mentioning is that in the unlikely event that your savings bank goes belly up - if you have the money in an offset - they take the debt into account - so ALL the savings in you offset is covered - no worries.

I agree - don't go with one account - better deals available.

I think I would be more interested in saving though in this uncertain time. Why not buy when the market has gone south by 30 or 40%?

getmore4less

IT_nerd wrote: »

Oh, and another thing. Would it be best to set up all direct debits I might have to fall on something like the 27th, since I get paid on the last of the month.
That way more money is in the account for longer. Is that right?

Keeping the money in the offset accounts for as long as possible is best but it makes a small saving overall.

Better to Stooze(www.stoozing.com) cheaper money into the offset account.

IT_nerd

I will be getting a pay rise in april of £200 extra per month (after tax) so I will just have to struggle for a while.
Also, about houses falling another 20-40%.. I don't believe it will happen. It's a unique view I know, but I just think a lot of this "crisis" is made up and that soon people are going to start buying again.
Also, the flat is dirt cheap even for the credit crunch. I could buy to let and still make money after lowering the rent from what the current landlord is making the tenant pay...

dimbo61

hi IT
think long term fixed offset say 5 years as you dont want your mortgage to
climb too high if you are on a tight budget.
If you want a place of your own as your home then buy what you can afford and save like mad while the waiting to move in!
I have a fixed offset with YBS and have been very happy.
Please go for repayment over 25 years and overpay into offset when you can afford.
Cavendish online great for LEVEL TERM LIFE ASSURANCE at very cheap rates.
GOOD LUCK

IT_nerd

That's a good idea. Take it out for 25 year (My original plan was 10) then overpay as much as I want. But if I need some extra money I'm not going to default if I don't.

Cheers

Locoblade

As others have said, although you're good at saving now, once you have a house it would appear that you're not going to have the money to save even with your payrise, so an offset mortgage is pretty pointless unless the rate is competitive against regular loans (i.e. the First Direct which is now down to +0.79%)

Your SOA as others have said isn't really complete if you're honest. Don't you ever go out to the pub/for a meal, no holidays at all for the forseeable future, no hobbies/interests that cost money etc? Car insurance/tax/MOT/tyres/servicing etc is going to be at least £500 a year (if not significantly more) too, so as others have said you need to put that in the monthly budget as thats at least £40 a month you need to save each month to cover that annual expense. There's always various other one off things you need to buy for the house/car/family, things like Christmas/birthday presents, emergency house/car repairs, house decorating etc. Even with your payrise I think that lot and more will swallow your disposable income so you'll struggle to save.

The SOAs never truly covers everything anyway IMHO, for example if I fill it in for mine and my wife's income/expenses, it suggests we should have about £1k a month over, but it never works out that way, and rarely even gets close. It might be different if you literally watch/budget for every penny you spend and border on being anal about it, but do you really want to do that or put yourself in the situation where you have to do that?

The other thing is even if you go with an offset and you are able to save a bit when there's no unexpected monthly outgoings, you'll generally only have access to the capital/overpayments you put in, not the £16.5k deposit because you'd then effectively be borrowing 100% of the value of the house, so you need to be saving a reasonable amount to use that as your buffer.

IT_nerd

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 960
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 25
Total monthly income.................... 985

Monthly Expense Details
Mortgage................................ 350
Secured loan repayments................. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 86
Electricity............................. 70
Gas..................................... 20
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 17
Mobile phone............................ 30
TV Licence.............................. 9
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 0
Petrol/diesel........................... 60
Road tax................................ 10
Car Insurance........................... 40
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 15
Contents insurance...................... 15
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 862

Assets
Cash.................................... 1500
House value (Gross)..................... 60000
Shares and bonds........................ 0
Car(s).................................. 1700
Other assets............................ 0
Total Assets............................ 63200

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 45000....(350)......5.79
Total secured debts........... 45000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 985
Expenses (including secured debts)....... 862
Available for debt repayments........... 123
Monthly UNsecured debt repayments....... 0
Surplus(deficit if negative)............ 123

Personal Balance Sheet Summary
Total assets (things you own)........... 63,200
Total Secured debt...................... -45,000
Total Unsecured debt.................... -0
Net Assets.............................. 18,200

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

That's my revised one after making the mortgage 25 year, not 10. And budgeting for everything. (Before pay rise)
Basically, the way I look at it is this:
Me and my sis both earn roughly the same amount of money.
My sis is in 4K of credit card debt, rents, and it will take her 3 years to get out of it. She's in a !!!!!! situation.
However I will own my own home, be up by 120 odd a month which if I choose can go into my mortgage.. I don't want to get stuck in a renting ruck.

The housing market could crash 25% and I would still not be in negitive equity. I bet not many first time buyers could say that nowadays.

There's a lot of anti buying here on MSE. I think you're part of the problem more than the solution.

Sure, Ideally everyone would wait and prey on people who are going under with their expensive mortgages. But hey, if I buy this property now maybe the owner will invest it back into the property market?
People have to buy, and it's people not buying that is brining this economy to its knees.

Locoblade

In your case I dont think people are saying not to buy because of the current housing situation, its more because it did appear that you couldn't really afford it.

Even with your revised SOA and your payrise I still think money would be tight as you still haven't really taken into consideration quite a few things (clothes is another Ive just noticed). It may be that you can afford it but do you honestly think you'll be able to save significant amounts? If not I dont think the oneaccount would be the best option, either a more competitive offset or a regular mortgage that allows you to overpay if you had the money, and withdraw it if necessary would be better

Mr_helpful

Locoblade wrote: »

In your case I dont think people are saying not to buy because of the current housing situation, its more because it did appear that you couldn't really afford it.

Even with your revised SOA and your payrise I still think money would be tight as you still haven't really taken into consideration quite a few things (clothes is another Ive just noticed). It may be that you can afford it but do you honestly think you'll be able to save significant amounts? If not I dont think the oneaccount would be the best option, either a more competitive offset or a regular mortgage that allows you to overpay if you had the money, and withdraw it if necessary would be better

This just shows how useless budget planners are. Mortgagfes can be tha same as kids. On paper you cant afford them and in reallity you do. Op peopler are judging you by themselves. If its what you want go for it

IT_nerd

To clarify, I didn't realise that the one account was an offset mortgage.
I am more than happy to go with a cheaper offset mortgage.
Like the IF one, it's something like 5.9% for a fixed 3 years. That seems competitive to me.
As for clothes, I rarely buy them. I buy lots off ebay when I do, for dirt cheap. I don't budget them because I haven't bought clothes in months.
And as for going out, yes. I do like going out. But I also know that if I can't afford it then I wont go out.
It's what I do now.
If I have my own place i'll just invite my friends around. A flim or something.

With ~£350 spare at the end of the month (After payrise) I really don't see how I can't afford this.
I can't think of anything else that costs me money. I even over budgeted for my services.
Sure, there's little expenses. But I can't imagine they go over £100 over the course of a month.
I just don't see it.