I'm fed up with my budget - advice needed

lynzpower

When you say "a little" how much do you mean

You do realise you will have to change your insurance to LLs insurance....???

want2bmortgage3

a little would mean about 20 quid a month. how much extra is LL insurance do you think? funny that i've just got the renewal price for the standard buildings. instead of £13.43 its now £19 something... why i don't know but i'll be shopping around instead of accepting that renewal price.

if this goes through i'll have around £1000 a month free to do what i like with. what would be the best way of using this? overpaying mortgage at 4.89%? saving it elsewhere?

carolt

How on earth did you get a mortgage on 6 times your income? Where from? How did you plan to afford it?

carolt

want2bmortgage3 wrote: »

a little would mean about 20 quid a month. how much extra is LL insurance do you think? funny that i've just got the renewal price for the standard buildings. instead of £13.43 its now £19 something... why i don't know but i'll be shopping around instead of accepting that renewal price.

if this goes through i'll have around £1000 a month free to do what i like with. what would be the best way of using this? overpaying mortgage at 4.89%? saving it elsewhere?

Pay for your gas safety certificate, ensure all furnishings are labelled fire-resistant, put some aside in case tenant doesn't pay/void periods/repairs & emergencies. And overpay.

want2bmortgage3

carolt,
the mortgage was started 7 years ago when it was a lot easier to get them. i think it was either down to the fact i had a big deposit, or that my income was exaggerated. i dont know exactly, as i used a broker.
thinking down the line, minimum 6 months, and depends if the tenant wants to stay, what options do i have?
one option i can see is returning to my property with a lower, more managable mortgage. the other option is just keep letting it out and either stay at the parents longer, or share with a friend or something and still overpay but not quite as much.

Jowo_2

Have you got authorisation from your lender to let the property? And are you aware you need similar permission from your lender.

There are plenty of threads on this forum about accidental landlords that rent out their properties and get stung by the tenant or agency. Does your agent belong to a professional body, such as ARLA.

Do your research on letting, including getting permission from your lender and insurer, obtaining a gas safety certificate, EPC, lodging the deposit in TDS, the benefits of an inventory, etc. When you hand over the tenant find or management to an agency, you are still ultimately responsible for everything. A good book on being a landlord will stand you in good stead.

Ensure you undertake a GAP analysis that includes an average scenario (some voids, some repairs) and pessimistic (tenant stay put for many months, doesn't pay a penny, trashes the place and you have to evict them through the courts).

want2bmortgage3

yes my lender is fine with letting they just have a consent to let form and £100 charge i believe. the agent is well established locally and my grandmother used them in the past to let her old property. The agent only offers a full management service and deals with everything, although I have requested to be informed about any repairs or anything that needs doing before they use their tradesmen as I dont want any surprise bills being deducted from my rent.

want2bmortgage3

normally a rental property would have a buy to let mortgage which i believe is usually interest only? however as i dont have any other mortgages and will myself be renting a room / living at parents then i might as well leave it on repayment? then once i've over paid it a fair bit i have the option of going back with a lower mortgage to pay. or selling up and buying somewhere else with the extra capital from overpaying?

bunnydrumming

other's have said - NEVER take a step down the property ladder until you are old and downsizing for your retirement. So many young people cannot afford to get on the ladder so don't waste your advantage.

I would recommend moving into your parents now - that would save you gas, electricity, broadband, food bills - might not fit into your lifestyle but you need to save money so have to sacrifice something!!

I have been renting a flat for 12 months from a guy in your position - he has moved back in with his mum and my rent covers his mortgage and a bit extra. He has no plans to take his flat back at the moment as he is loving the extra cash!

Move into your parents until you either find a flat mate or someone to rent from you - however you need to make sure your mortgage can be changed to a buy to let one - most can't be changed. Also what insurance will you need to rent your home out!

Are you sure you cannot manage the letting yourself as this will save you lots of money if you don't have to pay the estate agent every month- in two years of renting i have only had to speak to my landlord about a problem with the oven and a problem with the gas - both were easy to sort out!

Change estate agents NOW to get on rightmove and findaproperty.com - those are the only two sites i use and i know they are the only ones most people use!

If possible use all the money you save to pay off your mortgage with a view to moving back to your place eventually and having a bit more money in your pocket

Good luck and get to your parents house tonight!!!!

tommy75

£20 per week on food - cleaning/toiletries/washing blah blah???? Well done... Please tell me the secret.