First Time Buyer Mortgage

emilyka

Aleph wrote: »

Renting is dead money as you're just paying off some elses mortgage - What's good about that?! I'd much rather pay my own and pay for things that go wrong myself so I knw I'm not gettting over charged.

The deposit is one of the problems as it's the first starting point that is impossile to get over.

Thanks to the last person. We've look at the shared ownership but I've heard mixed reviews about that as they can put up the rent money whenever they want, so you have no choice but to pay it. Plus with purpoe built new houses like that, you have to have what everyone else has and pay just for someone to cut your grass!!

I'm hoping the government find that thing called common sense and get things sorted. Although the minute they do that - The house prices go up! Can't win!!

I must admit I have heard mixed reviews about shared ownership- the main one that worries me is often you are not allowed to sell to others outside those looking for shared ownership but I guess would still get a foot on the ladder.

Have you looked into Co-buying? I'm not sure whether you'd be happy about sharing a property with another likeminded individual? You can (if lucky!!) get a co-investor who is happy to make the investment with you (ie put down a deposit) in return for a reduced rent (kind of like private shared ownership). That way you would have a little more control over the property. Not sure how the economic downturn will affect these kind of things but it's worth a look. I would recommend looking at http://www.sharedspaces.co.uk/ for more info.

Good luck,

Em

beecher2

emilyka wrote: »

Have you looked into Co-buying? I'm not sure whether you'd be happy about sharing a property with another likeminded individual? You can (if lucky!!) get a co-investor who is happy to make the investment with you (ie put down a deposit) in return for a reduced rent (kind of like private shared ownership). That way you would have a little more control over the property. Not sure how the economic downturn will affect these kind of things but it's worth a look. I would recommend looking at http://www.sharedspaces.co.uk/ for more info.

Good luck,

Em

Sounds like a very bad idea to me, and thinking of a house purely in investment terms is what got us in this situation in the first place.

Best advice for the OP is to keep saving, and to go on the Debt Free Wannabe forums for help in saving even more.

blueberrypie

Aleph wrote: »

Renting is dead money as you're just paying off some elses mortgage - What's good about that?! I'd much rather pay my own and pay for things that go wrong myself so I knw I'm not gettting over charged.

The deposit is one of the problems as it's the first starting point that is impossile to get over.

Paying interest on a mortgage is just as much "dead money" as paying rent - and the bulk of your mortgage payment goes to interest in the first few years of a mortgage. If you take out a mortgage at 5% for £160,000 over 25 years, you'll pay about £935 a month - almost £700 of which is interest. It would be almost five years before the interest portion of your mortgage fell below £600/month. Over 25 years, you'll pay over £250,000. That extra £90,000 is no less dead money than your rent.

I don't know how much rent you're paying - but is it more than £935/month? If not, how are you going to manage your mortgage payment *and* all the extra costs (council tax, insurance, maintenance, repairs...)? What if interest rates go up? At 6% your monthly payment would be about £1035 (a total of £310,000 over 25 years) - can you afford that? Alongside the council tax, insurance, etc? Will you still be able to put money aside every month just in case the boiler dies or the windows need replaced?

If you can't save a deposit while paying rent, it's very likely you'll struggle to pay a mortgage too.

kaych

blueberrypie wrote: »

Paying interest on a mortgage is just as much "dead money" as paying rent - and the bulk of your mortgage payment goes to interest in the first few years of a mortgage. If you take out a mortgage at 5% for £160,000 over 25 years, you'll pay about £935 a month - almost £700 of which is interest. It would be almost five years before the interest portion of your mortgage fell below £600/month. Over 25 years, you'll pay over £250,000. That extra £90,000 is no less dead money than your rent.

I don't know how much rent you're paying - but is it more than £935/month? If not, how are you going to manage your mortgage payment *and* all the extra costs (council tax, insurance, maintenance, repairs...)? What if interest rates go up? At 6% your monthly payment would be about £1035 (a total of £310,000 over 25 years) - can you afford that? Alongside the council tax, insurance, etc? Will you still be able to put money aside every month just in case the boiler dies or the windows need replaced?

If you can't save a deposit while paying rent, it's very likely you'll struggle to pay a mortgage too.

Don't forget the solicitor fee (around £1200 for us for a 217k flat, so maybe slightly less for you) and the stamp duty too! Buying a house costs more than just buying a house!