First time Buyers, Shared Equity Help

BeccaBell

scobie140 wrote: »

By off plan do you mean not built yet/ in the process of being built or not even started? this is one of the things that confused me, as would the mortgage be taken out/applied for after the reservation has been paid or would it be nearer the time of compleation? as i have only just finished my apprenticeship and dont have any payslips of my new wage as evidence of income. do we pay the %5 deposit required before we move in or when the house is ready to be moved into? I will need to remember and try to bargin some extra's in as carpeting the full house could save us a fair few quid

With reference to this, my partner was in the exact same position, as his wage increase wouldn't be confirmed until he had his final results after a 2 year apprenticeship . We were upfront about this with our mortgage provider from the start and they agreed to base the AIP on his future wage. When his results were confirmed his boss confirmed in a letter the start date and amount of his new earnings and we had no problems!

wymondham

scobie140 wrote: »

Got to learn somehow, hence why i registred here to get people with experiance advice. No one in my family has been in the financial position to buy a house so i have not had the experiance of even witnessing the procedures to have any slight backround knowledge. I'm a quick learner and since you know about it could you please explain the basics to me so i can get a proper understanding for the foundations of it then i'll work on understanding the more complicated parts of the topic

OK, credit to you for wanting to know....

The big danger with housebuying is many people assume prices will only go up. This is definately not so, especially at the moment - they have never been so volatile and we are a long way to the edge of the woods yet.

If you take a out a mortgage for X on a property, then you are responsible for settling this debt when you either finish the mortgage at the end of the term or sell the house. If your house has gone down in value the lender still wants that same money back, and it's up to you to find it - thats negative equity.

As an example, we got stung in the '90s when we moved and had to pay £8,000 cash to clear our current mortgage before we could buy our next house .... ouch! and thats relatively small for negative equity amounts, they can be many tens of thousands!! This is why many people (an increasing amount) get stuck in a house - cant afford to move and often cant afford to stay - take lots of advice as often if you buy on a scheme you are even more exposed as you can bet your bottom dollar you are the one who takes the hit on negative equity, not your 'friendly, helpful' house builder!!

Keep in mind if you buy new you are more exposed as well as you are paying for the builders profit as well. If you have lots of nice 'included' furnishings you are more exposed, if they fit nice plasma screen TV's etc you are more exposed..... there is no free ride.

poppysarah

scobie140 wrote: »

From my understanding of what we were told is .

Told by who? A salesman? Your independent solicitor?

Work it all out on paper what happens if prices go up a lot, down a lot, or stay the same.

And if it's not written down and agreed in a contract it means NOTHING!

scobie140

BeccaBell wrote: »

With reference to this, my partner was in the exact same position, as his wage increase wouldn't be confirmed until he had his final results after a 2 year apprenticeship . We were upfront about this with our mortgage provider from the start and they agreed to base the AIP on his future wage. When his results were confirmed his boss confirmed in a letter the start date and amount of his new earnings and we had no problems!

Thanks that has given me some confidence about the situation to know that it has been done before

wymondham wrote: »

OK, credit to you for wanting to know....

The big danger with housebuying is many people assume prices will only go up. This is definately not so, especially at the moment - they have never been so volatile and we are a long way to the edge of the woods yet.

If you take a out a mortgage for X on a property, then you are responsible for settling this debt when you either finish the mortgage at the end of the term or sell the house. If your house has gone down in value the lender still wants that same money back, and it's up to you to find it - thats negative equity.

As an example, we got stung in the '90s when we moved and had to pay £8,000 cash to clear our current mortgage before we could buy our next house .... ouch! and thats relatively small for negative equity amounts, they can be many tens of thousands!! This is why many people (an increasing amount) get stuck in a house - cant afford to move and often cant afford to stay - take lots of advice as often if you buy on a scheme you are even more exposed as you can bet your bottom dollar you are the one who takes the hit on negative equity, not your 'friendly, helpful' house builder!!

Keep in mind if you buy new you are more exposed as well as you are paying for the builders profit as well. If you have lots of nice 'included' furnishings you are more exposed, if they fit nice plasma screen TV's etc you are more exposed..... there is no free ride.

Well that was alot easyer than i thought, i understand what you mean about the risk that we could end up with a mortgage which is higher than the value of the house and if we sold it then would need to clear the origianal amount not the new potentialy lower value.
Every day's a school day

poppysarah wrote: »

Told by who? A salesman? Your independent solicitor?

Work it all out on paper what happens if prices go up a lot, down a lot, or stay the same.

And if it's not written down and agreed in a contract it means NOTHING!

Well yes we were told that as we haven't had the oppertunity to go and see the sales person yet only spoke to them over the phone and then given a call by a finiancial advisor who was rather helpful with al the questions i could think of at the time.but we will be having a good look over all the paper work

badmoon

neverdespairgirl wrote: »

Call me a cynic, but "regeneration area" sounds like "!!!!!! hole" to me.

Ok, cynic!

I've looked at the area and know it quite well already. Some parts not that far away aren't brilliant, but equally there are parts just as close which are absolutely fine.

Time will tell of course.