Trying to save! but getting no where!

BitterAndTwisted

£5k to extend a lease of 71 years is a very long distance away from extending one with only 58 years.

With 71 years left on the lease the property would still be mortgageable. At 58 it will probably not be.

tea_lover

BitterAndTwisted wrote: »

£5k to extend a lease of 71 years is a very long distance away from extending one with only 58 years.

With 71 years left on the lease the property would still be mortgageable. At 58 it will probably not be.

Thinking about it I think we were just under 70 yrs actually, it was somewhere around that mark. But yes, it will get harder to mortgage the shorter the lease gets. I know not all lenders have the same criteria but we couldn't find a single one that would consider it even at 70ish. It was when we realised it was even putting off cash buyers that we had to do something.

The price can be scary though as it seem to basically be whatever the freeholder wants to charge. £25k does seem like a lot though - which was why I wondered if the OP had spoken to the freeholder or had done what we did which was google it and scare themselves.

Sorry to be focusing on just that one aspect of the OP. I totally agree with other posts suggesting a full SOA and a spending diary to track that 'missing' £1800 a month.

pinkteapot

And think of it this way - £1,800 a month is a holiday a month you could be saving yourself.

belfastgirl23

I'm guessing it all feels overwhelming at the minute and you're paralysed into inaction. I would suggest taking just one step at this stage if the SOA seems like to much - just keep a spending diary. You probably won't get everything written down but it really is surprising how much the little things add up.

Also if it helps, I have several savings accounts with my bank. One is 'holidays' one is 'car' one is 'house' etc. I have direct debits set up when my pay comes in where the money is transferred straight out of my account so that I don't know I ever had it. I find this quite effective and it's a real comfort to know that i have something put away against particular types of emergencies. Though some emergencies are forseeable to some degree (eg car tyres).

But I would urge you to do something. Besides anything else, you feel better for having done something. Doing nothing just makes you feel worse and worse.

partialycloudy

Hi all,

Thanks for all your comments, we got the figure of 25K from a few only calculators. But the 25K was based on a lease of 60years as most calcultors won't go below that!
We have sat and figured out our savings for next month so we should be able to get back on track. I think once we see we have a nice sum saved it will ebcome easier?! Just hope no emergencies need paying for next month that will wipe us out!

Thanks again

Cezzabelle

partialycloudy wrote: »

We bought the flat with a 63 year lease, not all mortgage companies will touch it but some will. We can't afford the 25k it will cost to extend the lease. We can't get any money out of our mortgage company as they have been nationalised so not giving out any more money. We would consider selling and renting for a while to facilitate a quick move, or a small purchase price.

I havent read the whole thread so apologies if you have covered this elsewhere but have you had this price quoted to you? I extended my flat lease a couple of years back and it was no more than a couple of hundred pounds. I actually think it was much lower but cant remember the exact figures. I just remember it didnt involve me saving to do it!

kmmr

If you are definitely selling in August, why don't you do all the work for a lease extension now, and include it in the sale so that it completes on the same day as the property completes. Which means you get the advantage of a long lease, but without having to pay for it upfront.

It means you will be able to sell to a much wider range of people, and are much more likely to get a good price.

So you say - price is £300k, including lease extension. On completion you get £275k, and £25k (or whatever) goes to the freeholder. The new buyers gets an extended lease, and you get a better price. There is a little more legal work, but it resolves nerves of new buyers who don't want to wait 2 years, or have to worry about the uncertainty of a lease extension. I presume it would also be ok for the mortgage company.

Taadaa

savingmummy wrote: »

sounds like you need a separate emergency fund for these emergency needs that way you wont need to dip into savings or income.

reduce an outgoings you can ie, reduce sky, change elec/gas suppliers, cancel anything you dont need or use anymore you can then put aside the extra savings from income for days out etc that way your free of dipping

I agree with this, DH and I earn a little more than you pcm and we manage to save about £500 a month between us. That is long term savings, I also put £60 a month aside for emergencies and car tax etc. I pay all the bills and see what is left, then decide how to carve it up. Yeah sometimes I have no money, but I would rather have le cash in the savings acc for when I really need it over going to the cinema one more time before payday or whatever.