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Great 'What I wish I’d known before I bought my first home' Hunt

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Comments

  • sjware
    sjware Posts: 4 Newbie
    Don't pay the asking price - set yourself a figure and do not get "auction fever" in offering up a few grand - I did, and paid £20k more than I could have...

    Doh...
  • dave2
    dave2 Posts: 264 Forumite
    First Anniversary Combo Breaker
    edited 3 March 2010 at 9:28PM
    I've been investigating buying myself there seems so many great tips in this thread. But one thing that doesn't seem to have gotten enough coverage is the all-important mortgage, it can end up costing multiples of what the property does!

    Do a lot of work on the mortgage, there's a huge amount of variation. Small differences in interest rates and restrictions can save you thousands.

    There's some tricks too like interest-only seems to have a much lower interest rate. Yet, some interest-only have frequent renegotiation intervals which OK, is a negative because there's the stress and you may have to pay fees (always try to work out total cost i.e. including all fees). But, there can be a big positive: you can find another provider and/or make a capital repayment with no penalty.

    So if you are very responsible you can take the payment you would have made under a capital repayment mortgage, pay your interest-only and then save the difference. Thus:
    - You get the reduced rate from an interest-only;
    - earn a little interest on the savings;
    - when it comes to renegotiate you effectively have a bigger deposit (= lower rate);
    - when it comes to renegotiate you need a smaller loan amount for the rate to be calculated on;
    - meantime you have money sitting in the bank for absolute emergencies. But seriously you have to forget it's there, set up a standing order into a savings account and turn off paper statements.

    But you'd have to be really careful with the paperwork to ensure you can do this.

    I'd also be wary of "independent" financial advisers, I did accounts for one and at least 3/4 of the income was from commission. My sis got one which she thought was great, I found out the interest rate she's on and it was bad even at the time. IFA also recommended going fixed, about a month later the interest rate collapsed like everyone else on the planet knew it would. I'm not saying avoid them by any means, just do some checking of your own too.

    Don't trust the bank either, their very nice very helpful girl almost had my mum re-mortgaged but fortunately she asked me to have a look. First thing I looked for, not in their calculations, took me two minutes to change the bank's supposed £'000's of savings into £'000's of extra cost. Next visit to the bank my the girl's saying that she "forgot" about the penalty from the existing provider - and still trying to sell the re-mortgage even as she's agreeing my figures and admitting it'd cost more!

    FTB also have some government assistance. Here in Scotland there is the Open Market Shared Equity Pilot scheme. They'll contribute up to 40% of the price. This can mean getting a property at all, getting a decent property, and of course paying "up to" 40% less interest each month. If you sell at a profit they will take their share, and that ignores anything you spent on improvements. Of course it also means extra hassle getting it done, and you need permission to rent it out (though a colleage has moved to NZ for a year+ and they okayed it).
  • Abbafan1972
    Abbafan1972 Posts: 6,887 Forumite
    Name Dropper Photogenic First Anniversary First Post
    The house we live in, we've been there since 1995 and it's our 1st house (can't afford to move).

    It didn't register when viewing, but the house had plug in air fresheners all over the place and they were still there when we moved in. Found out the reason when we moved in, we hadn't checked out the neighbours, as the vendor just said they were a "young Couple", so in our ignorance we believed them. Found out that the air fresheners was to hide curry smells from next door, didn't work though. It's not very pleasant smelling onions when your in the shower :eek:. They have since moved out though, thank god.

    The vendors conned us into paying extra for the light fittings in the lounge and dining room, should have said take the light fittings. Also paid extra for breakfast bar stools in the kitchen. Will never fall for that one again.
    Striving to clear the mortgage before it finishes in Dec 2028 - amount currently owed - £43,915.98
  • slbhill
    slbhill Posts: 5,441 Forumite
    First Anniversary First Post
    spirit wrote: »
    ....is paramount. Beware of buying a property that has been built on a floodplain.
    ...
    Always check this out on the environment agency's website. If the property is in a red highlighted area, then walk away.

    Good advice. And if you're in Scotland then it's SEPA that provides the information - they have a mapping utility at http://www.multimap.com/clients/places.cgi?client=sepa
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