Some Advice Please!

kira2009

Hi All,

I am in the process of buying my first house. Its a council right to buy, 3 bedroom. I put the application in when the market was low and they knocked a furthur 8 thousond off for repairs. They have offered it to me for 66 thousond. Its worth 100 thousond. :j

I have a deposit to put down and everything was looking good until i heard about redunduncies in the council. I work for the council and was told job are safe for this year but they are not sure about the next 2 -3 years after. :mad:

Its only me buying the house, So if made redundant in the next few years what happens?!? Is this too risky? i need some advice.

tim_n

I can't offer advice but I can offer my opinion kira2009

1st it's only worth what people will pay, though it's fair to look at it as an investment if you'll make 34k straight off if you could find a buyer in this tough climate. Current speculation from numerous sources say house prices will stay static - though it's anyones guess what they'll do at the moment, it's notoriously difficult to predict. Even if it's worth £100k you may loose your job and can't pay the bank will sell it quickly and probably at a loss meaning you pick up the tab even when you can't afford it.

In this current day no-ones jobs are truely safe, it's fair to say it's a risk and you need to assess how important your job is to the council, could you be replaced? how vital is your job to the community? If this is in question you need to start planning now.

Not knowing your age etc how long is it going to take to pay off 66k, will you still be working? how long have you been in your job and do you actually get redundancy pay?

Do you have savings? Several financial advisors recommend you have enough savings to cover all your expenses for six months should the worse happen.

downshifted

No one has a job they know will be safe forever these days

Make sure you get good redundancy insurance for the sake of peace of mind

Good luck with your purchase - and get on with the repairs/renovations so you can sell it if you need to in due course

poppysarah

Check out any redundency cover as most will probably wriggle out of it because you know it's on the cards...

If you have doubts then don't buy now. Losing a job is much harder with a mortgage to pay.

Jowo_2

Currently, there is support for homeowners with their mortgage interest after 13 weeks so make sure you have sufficient contingency for this period or greater.

Also, the Shelter website lists government schemes in place to prevent home owners from having their properties repossessed. Who knows if these schemes will be around in the future.

DVardysShadow

tim_n wrote: »

I can't offer advice but I can offer my opinion kira2009

1st it's only worth what people will pay, though it's fair to look at it as an investment if you'll make 34k straight off if you could find a buyer in this tough climate. Current speculation from numerous sources say house prices will stay static - though it's anyones guess what they'll do at the moment, it's notoriously difficult to predict. Even if it's worth £100k you may loose your job and can't pay the bank will sell it quickly and probably at a loss meaning you pick up the tab even when you can't afford it.

In this current day no-ones jobs are truely safe, it's fair to say it's a risk and you need to assess how important your job is to the council, could you be replaced? how vital is your job to the community? If this is in question you need to start planning now.

Not knowing your age etc how long is it going to take to pay off 66k, will you still be working? how long have you been in your job and do you actually get redundancy pay?

Do you have savings? Several financial advisors recommend you have enough savings to cover all your expenses for six months should the worse happen.

An unduly pessimistic analysis.

If the house is worth £100, then you could always expect to get £85 for it. Which is not bad if you paid £66. OK, if it happened soon after buying, the council may have some clawback, but you won't lose - and the value of the house would tend to generate some leeway for a private sale if things became dire.

It looks a lot better prospect for a FTB than most FTB purchases. This one has a fair amount of inbuilt equity.

Sammy85_2

Dont forget that if you know that redundancy is on the cards and you take a mortgage without declaring this you could be commiting fraud.

tim_n

DVardysShadow wrote: »

An unduly pessimistic analysis.

from an unduly pessimistic person I assure you - especially since my house has been valued today at 3k more and 17k less than I paid for it in 2007 by two different estate agents.

Two more to visit, then I'll take the median I guess!

Sammy85_2

tim_n wrote: »

from an unduly pessimistic person I assure you - especially since my house has been valued today at 3k more and 17k less than I paid for it in 2007 by two different estate agents.

Two more to visit, then I'll take the median I guess!

and the lenders surveyor will most likely go with the lowest... as we found out!

kira2009

Thanks 4 all your comments.

Tim, Im 25 and my morgage will be 50k. I have had the job for 7 years and they do pay redundancy.

I am not buying the house to sell and make a profit, i have grew up there and would love to keep in the family. Thats why im so worried about losing it. It means alot!

Its good to hear there is help out there if all else fails.

I will def make sure i have enough saving to keep me affloat for 6 months plus.

DVardysShadow

kira2009 wrote: »

Thanks 4 all your comments.

Tim, Im 25 and my morgage will be 50k. I have had the job for 7 years and they do pay redundancy.

Hey, you have your head screwed on. £50 loan on £66 value is an LTV of about 75% - but 50% on the open market value of £100. Not bad for an FTB. And the lower your LTV, the more secure your position.