Advice needed on buying.

Guapito

Jorgan wrote: »

If you need to move by Spring, go into rented for six months. Things may have stabalised within the housing market by then, but they may not have. Save the extra money you need and buy then. I'm guessing you are from the generation that has only known house price increases, it hasn't always been like that. The last recession saw prices crashing in '89 to '91, prices didn't really start to rise until '97/'98. This won't be over in a few months.

I do remember the one in the early 90s pretty well and the effect it had but some people say negative equity is only badif you need a new mortgage of you can't pay the monthly payments.

Thanks for the advice.:beer:

Jorgan_2

Does the 25% increase/reduce in value with the property? If it does, it may not be so bad, but if the value of the 25% is fixed at the purchase price, you could find yourself with a problem in the future, especially if prices drop. Many people assume that they can afford to purchase the 25% as they see their careers at a certain level 6-10 years down the line. But things don't always go to plan. Can you afford the property on just your salary if you decide to have more children and your wife stays at home to look after them?

Remember the IFA is there to sell you a mortgage product, not to give you advice on how you live your life. It may well be the best deal on the market, that doesn't make it the best thing to do.

hethmar

Guitario, as you seem really determined to get this house, could you not go back and bargain hard on the price? I see you say you got it a "little under" the sale price -

Guapito

Jorgan wrote: »

Does the 25% increase/reduce in value with the property? If it does, it may not be so bad, but if the value of the 25% is fixed at the purchase price, you could find yourself with a problem in the future, especially if prices drop. Many people assume that they can afford to purchase the 25% as they see their careers at a certain level 6-10 years down the line. But things don't always go to plan. Can you afford the property on just your salary if you decide to have more children and your wife stays at home to look after them?

Remember the IFA is there to sell you a mortgage product, not to give you advice on how you live your life. It may well be the best deal on the market, that doesn't make it the best thing to do.

No, it only reduces if we make payments (obviously). If we don't make any payments we would have have to pay 25% of it's market value.

Can we survive on my salary alone? Not just yet but in 3 years I think it wouldn't be a problem.

bikerqueen

i'm suspicious.

bubblesmoney

no one knows what life brings our way. so its best to be careful and minimise risks rather than be sorry later when u wont be able to do much about it.

i hope u dont go ahead with such a deal but if u do go ahead then atleast take some precautions -
-take adequate life insurance
-make the purchase a joint one so that the share automatically passes to te survivor in case of death of one of the shareholders
-consider making a will
-make sure u have savings / employee benefits / insurance to cover situations of critical illness/injury/redundancy
-have enough savings to tide u by the months incase u r made redundant. have adequate funds to cover all expenses including mortgage during unemployment months
- have a backup plan in case u r made redundant, be prepared to move into a smaller house and rent the property if the mortgage company has no objections so that u can maintain mortgage payments

life throws many surprises just like the pregnancy u mention. someone i know moved countries and ended career in the uk and moved to usa pending marriage in the usa, then days before the wedding the partner died plus when this person got a job later had a skiing accident and seriously damaged their knee and was off work for more than 6m and later couldnt do the job they were appointed to and had to get a more suitable job obviously affecting salary.

also know about another case where the person was an immigrant with family here on a HSMP visa, the main HSMP holder slipped and fell down the stairs and broke the spine and obviously couldnt work many months and landed in financial difficulty. to add to that the HSMP visa renewal criteria has economic activity as a criteria and so didnt get the visa renewal from what i was told and they had to leave the uk. heard they had liquidated everything in their home country and moved to uk and made uk their home as allowed under hsmp, but circumstances changed overnight with the fall down the stairs and the family had to leave the uk after ruining their finances and worse off position than when they arrived and spouse committed suicide soon after leaving the uk from what i heard. life has surprises so best to minimise risks and have backup plans especially since u r expecting a baby and ur partner wont be working for a while after the baby arrives. also dont know what sector u r employed in but with the recession and the redundancies being made by many employers it is better not to overstretch on finances in difficult times or even in goodtimes.

as for me- how do i minimise risks -
-buy a much cheaper house than i can afford
-make a bigger deposit
-take a tracker lifetime mortgage with no fees. so that i dont have remortgaging worries. also even though i only need 4-5y mortgage i deliberately opted for 25y mortgage so that i can make small payments incase i lose my job or my wife can keep up on payments if i die. ut we plan on and are doing overpayments and there are no overpayment penalties.
-chose to live in a city where property prices are more saner as my salary prospects will be similar in most places in uk with only small allowances extra for living in and around london but that wont make up for the increased costs of london living or travel/housing costs
-have life insurance for both me and spouse
-have ID fraud protection
-have all gas appliances, electrical and plumbing checked at home and plan o doing that annually
-havent yet installed a CO alarm but will get one installed soon
-will get the security alarm annually serviced because i want to and not because it gives a building+contents insurance discount
-discussed with spouse backup plans on what should happen regarding finances incase i die (as i am the main earner and wife at home now since we have a small baby). in that scenario she will get rid of thie house we bought even if it is for a loss and use the capital for her and childs needs and relocate where ever suitable
-discussed backup plans if made redundant / fall ill and cant work
-have extra savings (instant access)at hand as a backup incase i am not earning to cover expenses and mortgage
-didnt buy a house till the retrospective hsmp rules were struck down by the courts as illegal and i dont need any more visa renewals (unless the govt pulls more illegal surprises). hopefully the 4-5y ILR retrospectively effective changes made by the govt now under legal challenge will be similarly declared illegal by the courts but i have backup plans even otherwise
- i dont do things that risk my health afterseeing what happened to the other person who was on hsmp and injured themselves and got booted out at short notice. even though i had plans on skiing bungee jumping etc all that has been binned as i dont want to put the financial seurity of me and my family at risk. i dont ever lift boxes while moving home etc or travelling and rather pay for someone to move heavy items as in my line of work if i hurt my back i wont be able to work. earlier i used to do all my removals myself and in 1st year in the uk think i moved 5 times but now dont do the removals myself after seeing what happened to the other person who injured their back and couldnt work and got booted out. so even if i want to do the adventure activities i dont do them anymore for the sake of my familys security.
- slog extra shifts when ever i can so that i can pay off the mortgage ASAP probably in 4y or less
- no more holidays hopefully or very rarely till i pay off the mortgage
-will do anything else that may be necessary to minimise risks that will affect my family. guess i dont need to say that i am risk averse when it comes to family

Guapito

After all the advice that been posted here and after talking to the missus we have decided not to go ahead, as it would be borrowing on the never never and at such a large amount it would cost us even more in the long run than if we went for the 7.2% on the old deal.

Wimpey asked me to give them an answer this morning and I will tell them our position. Before the deal was offered to us yesterday I offered them 220k with no gifted deposit (raising the extra wouldn't be too difficult) but they turned it down. When I call them this morning do you think I should say the offer is still open and let them sit on it for a while?

We have looked at other properties around the same area and even though it is furthur out from where we currently work and live (an extra 15 miles or so) prices are still high when compared to the rest of the country. Where we currently live prices are even higher. It's a village near Heathrow (plenty of overhead noise!) which doesn't really have much going for it yet prices are high (230k for a 2 bed terrace anyone?). Moving further out gives us more for our money hence the excitement of being offered a 4 bed semi for 250k.

With regards to insurance etc, yeah you are right that I should cover my !!!! as you never know.

Jorgan_2

Personally I'd sit back & take a deep breath. Have a good look around at what else is available and then decide whats best.

Guapito

Jorgan wrote: »

Does the 25% increase/reduce in value with the property? If it does, it may not be so bad, but if the value of the 25% is fixed at the purchase price, you could find yourself with a problem in the future, especially if prices drop. Many people assume that they can afford to purchase the 25% as they see their careers at a certain level 6-10 years down the line. But things don't always go to plan. Can you afford the property on just your salary if you decide to have more children and your wife stays at home to look after them?

Remember the IFA is there to sell you a mortgage product, not to give you advice on how you live your life. It may well be the best deal on the market, that doesn't make it the best thing to do.

Just got off the phone to Wimpey to give them the bad news and they asked me to speak to the IFA to find a better solution.

He told me that the 25% DOES increase/decrease in value to the property, so if we make a loss so does Wimpey it's not fixxed to the purchase price. He also suggested that we use our initial deposit to pay back part of the 25% to Wimpey to decrease their share.

I dunno.

bubblesmoney

Guapito wrote: »

Just got off the phone to Wimpey to give them the bad news and they asked me to speak to the IFA to find a better solution.

He told me that the 25% DOES increase/decrease in value to the property, so if we make a loss so does Wimpey it's not fixxed to the purchase price. He also suggested that we use our initial deposit to pay back part of the 25% to Wimpey to decrease their share.

I dunno.

looks like they are desperate to get it off their hands. so sit tight and let them drop the price by 25% and even then think very hard whether the deal is worth it. any links to the development and property, others in the know might be able to comment