1st time cash buyer advise please

gettingthere1975

My grandfather passed away recently and we have just found out that we are to receive a fairly substancial sum of inheritence. It will mean that if we move to a cheaper area we could own a house outright.

Neither of us have a clue what to do, how to start etc, we're looking at approx 120,000 so we would need to buy outright and move for that sum.

Can anyone advise on additional costs etc please and anything else i should know.

Thanks in advance.

DVardysShadow

As FTB's it is unusual to buy cash - and daunting because you lack the experience.

One of the worst potential mistakes is to buy something which is unmortgagable. It will be easy to buy, the Estate Agent will be charming and ever so helpful and the path will be made smooth for you. But if you need to sell it, you could find that it is impossible, because you need another buyer in your position.

I presume you are renting somewhere at the moment, so you would not have rent to pay. Can I suggest that unless you have bad credit, you consider buying with a small mortgage [£30,000] and just keep back £30,000 or get a better house. That way, you will have dealt with the question of whether your property is mortgagable.

phoebe1989seb

Agree with DVS regarding the unmortgageability factor......our son and his GF were in a similar situation last Summer. At 22 years old they found themselves in the very fortunate position of being having up to £250,000 to spend on their first home thanks to an inheritance. They were looking to buy a flat in London and their solicitor (and us) warned them of the perils of buying a property which would be ineligibe for a mortgage. There were some issues over the lease (they bought a flat with a share of the freehold and a new 999 year lease in the end) but they did buy entirely via cash.

With the benefit of hindsight I think they should perhaps have done as DVS suggests and taken out a small mortgage but they were both just out of university and embarking on their careers so they felt they may have struggled to be approved.......typical headstrong youngsters they went ahead without taking our advice

Hope it all works out ok for you OP........

gettingthere1975

The opportunity for a mortgage is unfortunately not good, i am stay at home mum and my partner is a fair bit older than me, working part time, term time only as he had brain surgery and has trouble with keeping work due to memory loss.

We are currently renting and i'm keen to own outright to take a lot of the pressure off of myself by not having to worry about rent as this eats the majority of salary at present.

How will i know if a property is mortgagable? I know the house we rent atm is a concrete build and you cant get a mortgage on it because of how it is constructed but how will i know with others? Sory for seeming dim but i really have no clue.

giddypenguin

Forgive me if I'm being naive, but when the buyer gets their survey done, surely they could ask the surveyor the question, would a mortgage be a problem on this property?

As for extra costs, there are legal fees, survey, potentially stamp duty, moving costs, and if in a chain, one heck of a lot of stress!

DVardysShadow

gettingthere1975 wrote: »

The opportunity for a mortgage is unfortunately not good, i am stay at home mum and my partner is a fair bit older than me, working part time, term time only as he had brain surgery and has trouble with keeping work due to memory loss.

We are currently renting and i'm keen to own outright to take a lot of the pressure off of myself by not having to worry about rent as this eats the majority of salary at present.

How will i know if a property is mortgagable? I know the house we rent atm is a concrete build and you cant get a mortgage on it because of how it is constructed but how will i know with others? Sory for seeming dim but i really have no clue.

Try this calculator http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml to see how much a mortgage will cost. £30000 over 25 years will probably cost a lot less than your rent.

For your situation you should probably go for a very short term fix [2 years] and keep your £30000 in the bank. At the end of the 2 years, pay the mortgage off with the money in the bank. Of course you need to avoid the temptation to spend any of the £30000

As for the specifics of whether you would get a mortgage, go to the Mortgages and Endowment forum http://forums.moneysavingexpert.com/forumdisplay.php?f=15 and ask there.

You will be looking at around £200/month on a mortgage, but you will pay off about £1500 over 2 years, so you will effectively get that money back if you clear the mortgage from savings. If you get interest on your £30000, you will probably pay a net £2000 - which is probably less than the rent you would pay. And to my mind it would be worht it for the peace of mind that you were buying a mortgagable property.

giddypenguin wrote: »

Forgive me if I'm being naive, but when the buyer gets their survey done, surely they could ask the surveyor the question, would a mortgage be a problem on this property?

Fair point. But if you ask this, you only get an opinion, although it should be quite reliable