Best/most efficient way to buy if you have a lot of cash?

GDB2222

There is a risk on offset mortgages - see this link:
http://www.rpoints.com/bb/viewtopic.php?t=1178536

teabelly

Conrad wrote: »

!!!!!!

As you may have seen I have been putting in low offers (50% down on peak) on new builds. This is in the South East.

So market value then... :rotfl:

Realy

Conrad wrote: »

!!!!!!

As you may have seen I have been putting in low offers (50% down on peak) on new builds. I am wavvering, but the consensus amongst my skilled investors is now is probably the optimum time to buy as interest rates are dropping which will draw back the buyers. This is in the South East.

The OP said he wanted a house not flats though.
If you want to / had tobuy a house now reaserch builders who are trying to renegotiate debt or repos any other peoperty you would not get 30%+ off.

WTF?_2

Conrad wrote: »

!!!!!!

As you may have seen I have been putting in low offers (50% down on peak) on new builds. I am wavvering, but the consensus amongst my skilled investors is now is probably the optimum time to buy as interest rates are dropping which will draw back the buyers. This is in the South East.

That might make sense for BTL if it means a good yield but I want to buy a house that I'd be happy to live in for a decade without saddling myself with mortgage debt.

I should have enough cash to buy a suitable place outright by 2010 but I don't want to sink it all into the property in case I have an emergency requiring ready cash.

Dithering_Dad

!!!!!!? wrote: »

I was planning on buying outright as prices come down and eventually stabilise (I reckon 2010 will see me able to get a 3-bed semi in a good area given my current levels of savings and earnings and the decline in prices) but I'm wondering if it's a good idea to tie pretty much all my capital up in a house.

I'm now thinking something like an offset mortgage. Putting maybe 60% down and holding the other 40% in the account to offset the capital loan. Essentially, I'd be maintaining a line of equity against my house that I could draw on.

Does that make sense or are there better ways to go about it? What sort of financial penalties would I pay for doing this?

Depends on where your current house deposit savings are. If you have a lot of your savings in ISAs and they're getting better returns than your expected mortgage rate, then you're better off leaving your savings where they are, especially as they are inside a tax-free wrapper that you will lose forever once you withdraw savings. Remember to factor in the cost of your mortgage arrangement fees when you do the calculations.

If you go with Intelligent Finance, you are allowed to offset your savings, current account and importantly, ISAs. The advantage here is that you keep the tax-free wrapper of your ISA, the disadvantage is that your ISA interest does not compound within the ISA but is used to offset the mortgage.

I think you're wise not to put all of your savings onto the mortgage, you just need to make sure that the saving returns are higher than your mortgage interest rate.

Who knows, if you buy 18 months hence, you could be one of the first members of my Mortgage Free in Three Pt II thread. You'd be very welcome.

p.s. forgot to ask - do you have adequate pension savings? This could be an area to look into if you don't.

Conrad

Realy

I have seen non new build houses in reasonable areas with 25% off. A few newbuild houses Ive seen with 50% off.

The flat I really want is right next to a station in a great town centre, massive flat, not lived in, immaculate and very high standard. I'm hoping to get it for £135,000. At peak the highest price paid was £300,000, the average just after peak was £240 - £250. In Jan this year they were completing at £227995 and some more recent sales completed at £177000.

I think £135 for this property is outstanding value and over 10 years I should thin it will be back to £300k. The rent yield is just over 7% which is not bad, and there is not a glut of rental property available. These flats are never empty.

Too many people make generalisations about the market and unemployment - you have to focus on the area you are interested in and decide locally whether its a good investment.

I was very bearish but now Im seeing increased activity on the back of the rate fall.

Realy

Dithering_Dad wrote: »

Who knows, if you buy 18 months hence, you could be one of the first members of my Mortgage Free in Three Pt II thread. You'd be very welcome.

I won't be allowed in for a bit. Unless I find a decrepit rich relative with a dodgy ticker to whom I am the sole heir.
If I do it’s off to stringfellows for him.

Realy

Conrad wrote: »

Realy

I have seen non new build houses in reasonable areas with 25% off. A few newbuild houses Ive seen with 50% off.

.

Got to be asked link?

Increased activity rate, must be All them FTB's coming back!
I have a family member who is an EA and he rightly says things will not start to shift in numbers again untill the FTBs are back in the market.

Don't get me wrong I am no bear but if there was a number of properties (houses) with 50% off FTBs would be back and the crash would be off.

MrDT

Realy wrote: »

if there was a number of properties (houses) with 50% off FTBs would be back and the crash would be off.

Surely you mean the crash would have happened?

dopester

!!!!!!? wrote: »

That might make sense for BTL if it means a good yield but I want to buy a house that I'd be happy to live in for a decade without saddling myself with mortgage debt.

I should have enough cash to buy a suitable place outright by 2010 but I don't want to sink it all into the property in case I have an emergency requiring ready cash.

Same predicament as me. Sounds to me like you just need to work all angles to get your house even cheaper than you currently are expecting.

The need was obvious; to defeat what opposed the right to a house at great value. The method was that taking and bending of materials and people to one purpose, the outlook that everything could be used in the fight; that nothing could be excluded, that everything was a weapon, and the ability to handle those weapons, to find them and choose which one to aim and fire; that talent, that ability, that use of weapons.