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

fc123

!!!!!!...Are you in a position to buy outright now (or in next 6 mnths) but at auction price?

WTF?_2

fc123 wrote: »

!!!!!!...Are you in a position to buy outright now (or in next 6 mnths) but at auction price?

I could by a typical FTB place in a crap area, around now at market price.

I could buy an FTB place in a good area in around 6-9 months.

I'm figuring a better 3-bed property should be in my reach by mid 2010.


It all depends on how quick prices come down and whether or not the banks where I have my savings go bust.......

But yeah, you have a point about auctions. Hadn't considered that for some reason.

JonnyBravo

Realy wrote: »

Your main costs are arrangement fee, & valuation but if you went for worst rate you most probably looking at £399 arrangement and £99 drive by valuation.

Your biggest penalty would be obviously no intrest on your offset but then no tax either.

Open up an offset pay your 60% down. put the 40% in offset or leave it in an ISA if you have one.
Then pay wages in and save in the offset account and drip feed the ISA
(you could get first direct offset at the moment at 4.99% [£999 arrangement though ouch] and an isa would provide a better return than that)

That is what I am going to do when I re-mortgage.

Compleat sense getting rid of the interest + having funds for when you are in the poop is the idea when a housholder.(well it is mine anyway)

Clearly if you do follow this route !!!!!! then you'd choose an offset with the lowest set up fee. eg FD also do an offset which iscurrently at 5.29% but doesn't have the £999 fee. This is preferrable as the interest rate is academic if you totally offset.

I have to say I echo the thoughts of DD though. Think carefully about losing any ISA status.
I'm really not usre that just paying off the mortgage would be all that bad.... what kind of emergency needs you to have access to 40% of your house value and wouldn't end up with you needing to sell the house anyhow? Most emergencies can be covered by insurance and by your 6 month "emergency fund"

WTF?_2

ess0two wrote: »

I'll phrase it another way,every turn down on the market he seems to be always on top.
Its b-o-l-x............gold,buying houses,money for emergencies,blah blah.
This guy talks it good from the cover of his mothers back bedroom.

Well DD, I'd point out that I went on record as having bought gold almost 4 weeks back, just before it went ballistic.

So if that hadn't worked out, your personalities would be haranguing me about it now.

WTF?_2

JonnyBravo wrote: »

Clearly if you do follow this route !!!!!! then you'd choose an offset with the lowest set up fee. eg FD also do an offset which iscurrently at 5.29% but doesn't have the £999 fee. This is preferrable as the interest rate is academic if you totally offset.

I have to say I echo the thoughts of DD though. Think carefully about losing any ISA status.
I'm really not usre that just paying off the mortgage would be all that bad.... what kind of emergency needs you to have access to 40% of your house value and wouldn't end up with you needing to sell the house anyhow? Most emergencies can be covered by insurance and by your 6 month "emergency fund"

I was abroad for many years so only could open ISAs in the last 2 financial years. My savings are pretty much all non-ISA, mostly denominated in foreign currency though a growing amount of sterling from what I am earning and saving now.

The 40% would be there to give me a lot of breathing room. In return for a set-up fee of £400-£1000 I figure it would be well worth it for the flexibility in the longer term.

eg. If I wanted to build an extension, do a loft conversion etc.

And borrowing against your property is almost certainly the cheapest way to do it. An offset mortgage seems ideal given I would already have the full amount and could just dip in and out of the equity as needed. If I didn't need it, no worries. The money would just sit there offsetting the outstanding capital (no interest to pay) and I'd be slowly reducing the borrowed capital every month putting me in a stronger and stronger position as time goes by.

I really don't want to have a large debt hanging over me but I do appreciate the concept of having access to credit. This seems to be best of no worlds - no actual debt against the house (on balance) therefore no interest to pay but I could access the money I have tied up in it at any time.

Dithering_Dad

mr.broderick wrote: »

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

I think he bought in and it went up further. One is rarely lucky enough to buy at the absolute bottom and sell at the absolute top. He won't gain or lose any money until he sells, so as long as he keeps his eye on the market he should turn a profit.

The worry I have with gold is that it's such a volatile commodity and can change radically in such a short period. If !!!!!! has a week away on holiday without access to the internet, he could come back and find that he's now making a loss on his Gold.

I think he would be well advised to start bailing out of Gold. It's still a safe haven at the moment, so will be bouyed up by this, but the original reason Gold was so expensive was because of its use in manufacturing, and China was buying an awful lot. With a downturn in the economy this requirement will ease and so Gold prices will fall.

As with everything, timing is key. I always think it's better to make a decent profit and get out than to stay in too long chasing a huge profit and ending up making a loss. I'm a bit risk adverse though and so I'll never make a fortune with my investments. Conversely I'll never lose one either.

chucky

!!!!!!? wrote: »

I was abroad for many years so only could open ISAs in the last 2 financial years.

when you say "abroad" do you mean another country or do you mean you were "away" for many years?

chucky

!!!!!!? wrote: »

Well DD, I'd point out that I went on record as having bought gold almost 4 weeks back, just before it went ballistic.

So if that hadn't worked out, your personalities would be haranguing me about it now.

you don't have to prove anyting on here !!!!!! - don't worry this is only a sub board on a money savers forum.

i hope that you do make money on your gold investment and get your home.
i also hope that you make money on your home too when you go to sell it.

Dithering_Dad

!!!!!!? wrote: »

Well DD, I'd point out that I went on record as having bought gold almost 4 weeks back, just before it went ballistic.

So if that hadn't worked out, your personalities would be haranguing me about it now.

!!!!!!, please see my various posts in your thread, especially my one about your Gold that I just posted (I was writing it as you posted the above, so have only just seen your post - which incidently you've written as though you're replying to me, which you're not).

I have never harangued you about buying Gold or about saving for your house. As I said in an earlier post, I think you are a pretty savvy investor and I do know that you bought before the lastest huge gains - hence my response to Mr. B.

While I don't particularly like your internet personality, you are like me in the way you invest. You talk the talk and walk the walk. Good luck with the gold investment but bear in mind what I said about it turning soon.

p.s. I really don't have any other 'personalities' on MSE, I post whatever I like under my DD username and get a lot of flack about some of it. If I really cared about my 'forum presence' I would post sensible stuff with DD and daft stuff with 'XYZ'.

JonnyBravo

!!!!!!? wrote: »

I was abroad for many years so only could open ISAs in the last 2 financial years. My savings are pretty much all non-ISA, mostly denominated in foreign currency though a growing amount of sterling from what I am earning and saving now.

The 40% would be there to give me a lot of breathing room. In return for a set-up fee of £400-£1000 I figure it would be well worth it for the flexibility in the longer term.

eg. If I wanted to build an extension, do a loft conversion etc.

And borrowing against your property is almost certainly the cheapest way to do it. An offset mortgage seems ideal given I would already have the full amount and could just dip in and out of the equity as needed. If I didn't need it, no worries. The money would just sit there offsetting the outstanding capital (no interest to pay) and I'd be slowly reducing the borrowed capital every month putting me in a stronger and stronger position as time goes by.

I really don't want to have a large debt hanging over me but I do appreciate the concept of having access to credit. This seems to be best of no worlds - no actual debt against the house (on balance) therefore no interest to pay but I could access the money I have tied up in it at any time.

Ah right.

I still think I'd go for the buy outright option and look to borrow against the house when I wanted to do the work.

You'll then be able to work out exactly which mortgage is best for you but with the benefit of knowing what you want exactly.

eg if you only borrow £20k for a loft conversion then the no/low fee but with a slightly higher rate offset may be the right option but if you end up doing an extension and spending £80k it may not be, you may wish you'd paid the £1k fee for the lower rate..... however if you've already chosen your product you'll be tied to your choice of months/years ago.