Is there any point me owning a property?

want2bmortgage3

Based on my current situation:

I bought this 2 bed maisonette for £140k 3 years ago. I'm not sure whether its current value is more or less than this.

The mortgage I'm paying is about £103k and fixed at 4.89%. This means I'm paying £644 a month.

To simplify the figures if we call it £100k mortgage at 5% then I am paying £5000 per year in interest. This is about £400 a month. So each monthly £644 payment is around £400 interest and £240 repayment.

To top this off I'm also paying council tax, home insurance, ground rent, utility bills which brings the total to about £800. I earn around £1100 a month so dont have anything left after food, petrol, etc.

Wouldn't I be better off renting a room in a shared house with all bills included for say £350 a month. Then I would have about £450 a month spare to put away for a future property. This works out more than the £240 capital repayment I'm paying at the moment.

I could also add that I'm not at the age I'm that worried about owning and living in the same place, I dont particularly love the property I own and I am single

So does the above make any sense and what do you think I should do? Thanks!

jayss

Could you get a lodger in to your spare room?

BabyBetty

Have you thought about renting it out or even getting a lodger to help with the mortgage costs?

ray123

If you dont mind sharing, why not let the other bedroom out?

With a mortgage, in the first ten years, the majority of the money repaid each month covers the interest, rather that capital repayment. However, towards the end of the mortgage, the majority of your repayments will cover the capital repayment.

If your lender will allow and you are willing to let the other room out, make 100-200 pound over-payments each month (towards the capital repayment) and this will dramatically reduce the length of your mortgage.

You have the choice of living in shared accomodation for 25 years and saving a few quid, or paying more towards a mortgage and owning the property at the end of it.

mlz1413

Most people rent rooms or share a house because they can't afford their own space. Your talking about giving up your own space to share to enable saving. Also most house sharing is short term and you would be in a long term situation - 2 yrs +.

Before you give up your home get a lodger and share with them whilst you have the authority of being the one in charge. Then you can decide if you want to share with a stranger and be the one living in their home. Also have a good look round your home, would you need to give away a lot of furniture, pictures, ornaments, clothes etc if you suddenly down-sized to a single room?

From your sums you do have £300 left for food, petrol, clothes etc which is far more than nothing, as others have suggested getting a lodgers seems a good way forward and would give your income a boost of probably £200 a month or more.

Take a long term view of your situation and finances - do you ultimately not want to live where you currently are or would 6 months of extra income give you a boost to have a holiday / redecorate / give you a safety cushion / make you happier.

Cannon_Fodder

If you had had that thought around 2 years ago, it would have been a wise, and well-timed decision.

Today, its too late.

You may not be in negative equity, but to be able to move quickly might take you very close to it.

The deposit and repayments you put into the house will have disappeared.

Much better to do something to the house, i.e. redecorate, to make yourself like it a little more, as they say "a change is as good as a rest"...

Get a lodger to ease the finances.

Going into someone else's house to share, makes you limited by their rules. If you get a lodger they follow your rules or leave...

Cissi

BabyBetty wrote: »

Have you thought about renting it out or even getting a lodger to help with the mortgage costs?

Yes, he has:
http://forums.moneysavingexpert.com/showthread.html?t=1602727&highlight=
http://forums.moneysavingexpert.com/showthread.html?t=1761413

Want2be: you're getting the same replies here as before: the obvious solution is to get a lodger. Why not try it for a while

Cissi

I've just noticed your 4th thread on the subject and seen that you are considering it: http://forums.moneysavingexpert.com/showthread.html?t=1686345

Good luck, it looks like the way forward, even if it takes a while to find the right lodger.

want2bmortgage3

yeah i know and thanks for all the replies, im not opening new thread for no reason. my question on this one was is it worth having a property at all in my current situation as im paying so much interest. i just wondered if there were alternatives and anything better long term, i know half the reason of owning property is the value should go up over time but for a while its not been doing that. as you see in my other threads im already trying to find a lodger but have not had any luck yet!

mlz1413

"i know half the reason of owning property is the value should go up over time "

No that is a recent thought ie buy house, treat it like a cash cow and then sell it when you want the money it should have produced.

Go back 50+ years and a property purchase was for the reason of buying a home, to live in, enjoy, raise a family but absolutely and mainly to have somewhere safe with all your valued possesions in it.

Because for the last 10/15 years property prices have risen and some people have made good money from buying and selling we now have a whole generation who believe a house 'owes' them.

Dinah93

Instead of paying someone else to have a single room, get a lodger to pay you, this might cover most of the interest you pay a month, put the lodgers payment into overpaying the mortgage and in the long run you will save money by paying less interest by paying more than you needed to.