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

BitterAndTwisted

I think you'd be mad to buy a flat, so matter how huge it is, rather than buying a house. A freehold is always better than a leasehold. The lease never gets shorter, no quarterly service-charges and any future maintenance and refurbishment costs are under you own control, not some absentee freeholder's.

You can now look at properties selling for £200k and still have the same sized mortgage as you planned. And you could most probably find yourself a lodger and have them pay you £300 a month or more tax-free.

Tembo_2

Ok, I cant buy a house.

Thanks for all the advice, but I CANT BUY A HOUSE.

sonastin

Here's what I would look for in your shoes:

1) set aside between 3-6 months of committed outgoings in case you stopped earning.
2) work out what sort of LTV that would give you if you put the rest in your deposit.
3) at some point, the improvement in interest rates for a higher LTV tails off so if the best rate is e.g. 70% LTV and you have 40% deposit, then put 30% down and get the 70% deposit (not sure I've explained that properly?)
4) point above kinda depends on this being permitted but once you have completed, pay the remaining spare cash as an overpayment on your mortgage. Keep the monthly payments the same but allow them to reduce the term of your mortgage.
that way, if you ever need access to the cash, most mortgages allow you to draw down any overpayments made but in the mean time, you reduce the interest that you're paying on the mortgage.

Kinda works like an offset mortgage but providing that overpayments and drawdown of overpayments are allowed, you might have access to better rates. It also has the advantage that you have to write to the mortgage company to access the overpayment so it reduces the chance of convincing yourself that its OK to dip into the money you're offsetting because after all you've found that you could really do with that porsche!

DominicJ_2

most mortgages allow you to draw down any overpayments made but in the mean time, you reduce the interest that you're paying on the mortgage.

Mine says they "might", but they may also consider it a remortgage, make sure the fine print says *will*

Tembo_2

Morning,
I’ve found a 2.89% 2 yr. fixed, £499 arrangement fee with First Direct. No fee for overpayments, so I based this on £100k mortgage and £52k deposit. If I then want to shove more cash into it I shall, but for now that seems like the best deal for me. £383 home buyer report.
Only thing is bank says it will take 5 WEEKS to finalise! Seems a bit excessive to me, or is this a normal time frame?


What do you think?

DVardysShadow

Tembo wrote: »

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.

Tembo wrote: »

Ok, I cant buy a house.

Thanks for all the advice, but I CANT BUY A HOUSE.

I would say that buying to be near your mother might not be the right way to look at this. And really there is no time pressure on this. Act in haste, repent at leisure.

If you get a rental wrong, you can be out in 6 months. Get a purchase wrong and it could take much longer and be more stressful.

With what you have told us, buying in London might be a better thing to do?

getmore4less

Are you planning to return to the area?

If you main home will still be in London it might be cheaper just staying hotels/B&B/friends/mums etc rather than buy somewhere.

Tembo_2

Look people, I dont really want to go into the finer details of my situation but surfice to say:

I cant buy a house and stay living in London.
I wont be staying in B&B's - this works out more expensive than my mortgage.
I cant afford to buy anywhere decent in London.

ENOUGH!

DVardysShadow

As you have PM'd me, it is plain that you are not telling the whole story as is your right and I respect that. But have the good grace to accept the answers which have been given in good faith to the situation as you have explained it.

As ever, with posters who don't tell the whole story, I suspect that you want to hear certain answers. Please just accept that people here will answer honestly on the information you give. I suggest you contact the mods and get this thread closed or deleted.

And I suggest that everyone else regard it as closed

nollag2006

With a 40% deposit, HSBC have a 2.39% product. £999 booking fee, and no early redemption. Would mean you putting in £60,800 of your £65k windfall, but it still leaves you a small lump sum for contingencies.

Have a look at moneyfacts.co.uk before you speak to your IFA, so you have a better idea of the products available