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

Dithering_Dad

!!!!!!? wrote: »

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.

Just noticed this. I'd agree with this up to a point, but you'll probably find that insurance covers a lot of the emergencies that can crop up. The rest can be covered by your 3x to 6x monthly expenditure emergency savings.

Being mortgage free is probably the safest position you can be in. Even if you lose your job you will always be able to get enough money coming in to be able to afford your monthly food, council tax and utility bills, even if it means working evenings in a pub or stacking shelves. Also, savings are means-tested for state benefits, housing equity is not.

I would certainly feel a lot better about the current financial crisis if I had my mortgage paid off. I just wish that the banks/economy had managed to limp along for 3 more years. :rolleyes:

Conrad

Realy wrote: »

Got to be asked link?


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.

There are plenty of newbuild flats with 50% off. I dont want to give links as I am currently negotiating, so youll have to do your own leg work. Countrywide group seem to get a lot of repos and desperate developers;)

The problem remains for first time buyers that only 2 or so lenders will give 90% on such flats, with all other lenders restricted to 70 - 75%. THATS WHY THEY ARE CHEAP FOR NOW

In time the lending will return on these flats as they will no longer be classed as new build;) and an extra side helping of;)

Realy

Conrad wrote: »

There are plenty of newbuild flats with 50% off. I dont want to give links as I am currently negotiating, so youll have to do your own leg work. Countrywide group seem to get a lot of repos and desperate developers;)

You said houses.;)

mr.broderick

!!!!!!? 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?

If you wait until 2010 you will have waited too long imho.
I hope for your sake i am wrong but i rarely am :cool:

Dithering_Dad

mr.broderick wrote: »

If you wait until 2010 you will have waited too long imho.
I hope for your sake i am wrong but i rarely am :cool:

I'm sure that as soon as !!!!!! sees those 'grass shoots' appearing he'll buy. I dare say his 2010 purchase date is arbitrary and could move between 2009 and 2011 as required.

!!!!!! is a savvy/clever guy and so I doubt he'll miss the bottom of the market.

mr.broderick

Dithering_Dad wrote: »

I'm sure that as soon as !!!!!! sees those 'grass shoots' appearing he'll buy. I dare say his 2010 purchase date is arbitrary and could move between 2009 and 2011 as required.

!!!!!! is a savvy/clever guy and so I doubt he'll miss the bottom of the market.

Isn't this the guy who has just bought a load of gold at its highest point in decades?

mewbie_2

Conrad wrote: »

In time the lending will return on these flats as they will no longer be classed as new build;) and an extra side helping of;)

That's one view. Another view might be that these executive apartments, which were a scam from builder through surveyors/banks/Insidetrack to gullible investor will become slum tenements, and will be pulled down / redeveloped, used for DHSS / social housing, or possibly even prisons. I kid you not. If ever there was a time for a balanced portfolio - then now is that time.

Walletwatch

One general query that I have always wondered about on offset mortgages. Say I buy a house for 100,000 with an upfront cash component of 30,000 and take an offset mortgage for 70,000. I assume that my EMIs would then start based on a principal amount of 70,000 and the interest on that amount (assume this amount is £700 pm). If I were to run into some lump sum of 100,000 and put 70,000 totally in my offset account for six months, what would be my monthly outflow for those six months - would it still be 700 pm or lower. Given that I should not be charged interest for these six months, how would my monthly payables be worked out then, and when do I get to see the benefit of the float in the form of reduced interest outflows?

I ask this question because I am pretty much in the same position as !!!!!! and by 2010, should have enough saved up in cash to dream of buying outright assuming further 15-20% falls in prices.

mr.broderick

Walletwatch wrote: »

One general query that I have always wondered about on offset mortgages. Say I buy a house for 100,000 with an upfront cash component of 30,000 and take an offset mortgage for 70,000. I assume that my EMIs would then start based on a principal amount of 70,000 and the interest on that amount (assume this amount is £700 pm). If I were to run into some lump sum of 100,000 and put 70,000 totally in my offset account for six months, what would be my monthly outflow for those six months - would it still be 700 pm or lower. Given that I should not be charged interest for these six months, how would my monthly payables be worked out then, and when do I get to see the benefit of the float in the form of reduced interest outflows?

I ask this question because I am pretty much in the same position as !!!!!! and by 2010, should have enough saved up in cash to dream of buying outright assuming further 15-20% falls in prices.

Always amazes me, biggest financial meltdown in history, record yoy falls of house prices and yet, still, people plotting their future purchase. Amazing.

Walletwatch

mr.broderick wrote: »

Always amazes me, biggest financial meltdown in history, record yoy falls of house prices and yet, still, people plotting their future purchase. Amazing.

Maybe the financial meltdown and prices potentially falling to ridiculous levels is the precise reason people are plotting their future purchase