So confused, now have more money than I ever thought I would. HELP!

Tembo_2

Hello all….I’m so confused.

I am a FTB, offer accepted on a flat £152,000. Initially I had a normal 10% deposit, but it turns out my Dad has been squirrelling away and now I he has given me £65,000
I’m not sure if I should put all this into the property or maybe the 'odd' £52,000 and save the rest.
I have only just head about offset mortgages, but the calculator on this website confused the hell out me.

Can anyone offer any advice?

Many thanks in advance, I just don’t want to waste such a wonderful opportunity. I’m so worried I’m going to make the wrong decision and lose it. Such an odd predicament to be in after scraping and saving for so long.

19lottie82

Surely it would be wise to get yourself a financial advisor?

WestonDave

If you are set on the flat then an offset mortgage might be a good way to go if you want to keep some of the cash available - its a bit pointless to be paying 3-4% on your mortgage and earning 2% on your savings. We've had a First Direct offset for years - you have different accounts - current or savings - which get no interest, however the balances on them are deducted from the mortgage balance to calculate the daily interest on the mortgage. That means that the kids savings pots are effectively earning 4% net for me, as is my salary for the few days its in the current account!

The other question is whether with this new found wealth a flat is the best investment - they tend to be harder to shift on than houses, with new builds of both notorious for losing money. So the question is - if previously you could afford £152k, and now you have over £200k to play with, would you be better off choosing a small house in the same area rather than the flat. You wouldn't be spending any more on mortgage payments but might have a better asset. Also if you have more rooms in the house you could potentially take in a lodger, use that income to clear the mortgage faster and so totally safeguard your position sooner.

Nice problem to have though.

BitterAndTwisted

Put £60K towards the purchase and keep £5k up your sleeve in savings for the unforeseen. There will always be something and you don't want to find that you can't finance some essential repairs once you're in. The boiler completely failing two days after you've moved in could eat up a fair proportion of £5k

Mallotum_X

With the extra do you still want to live in a flat, perhaps you could miss the living in a flat stage of life and put the extra towards a house?

dodger1

Many people prefer flats rather than houses.

Tembo_2

I have looked at a house, many houses, but this flat is perfect location and cost wise I can afford it comfortably. This is important. Also sq ft wise its the same as a small house that I could afford in the same town.

I suppose I could spend money on a finanacial advisor but Im am just starting my questions and thought here is good a place as any to ask.

Speaking to some brokers this afternoon and my bank on Monday. Shall see what they all say too.

DominicJ_2

Assuming this isnt a wind up....


My first thought was stop looking at flats and start looking at houses.

If your heart is set on the flat, then I'd pretty much agree with Weston and B&T, definatly look into your mortgage again, you had a 10% deposit, you now have a 50% deposit, expect to pay a lower interest rate, lower fees ect.

Look into an offset, compare it with taking out a 55% and 60% mortgage (which would leave you with 11k and 19k left over.
You can always overpay with the 11k/19k in a years time

Do NOT get a £100k mortgage, and spend the remaining £30k on a Porche.
Thats what you buy when you have paid off your mortgage.:beer:

Tembo_2

Deffo not a wind up!

Id like a house, but I still have to pay the mortgage, bills etc etc and this flat will make things easier. It will be second home, I will still live and rent in London. Im only buying as I need to be near my Mum who is very ill.

Even still, I cant find a house I like right now and I dont have the luxury of time to wait for the new year and new properties on the market.

So, flat it is. And as I said, it's HUGE.

So, £100k mortgage and throw the remaining £52 in and save the £13 for other eventualities.

No porche for me

sooz

Tembo wrote: »

So, £100k mortgage and throw the remaining £52 in and save the £13 for other eventualities.

No porche for me

Where has your original 10% deposit gone then? You're missing £15,200. Step away from the second hand car salesman...

If this is to be a second home, do you plan to leave it empty all week? Or longer?

GDB2222

I agree with Dave. Whilst you are a bit uncertain about what you want to do, an offset mortgage seems a brilliant solution.