Getting onto the Property Ladder

Romani_Ite_Domum

lynzpower wrote: »

I work in property and make 24 before tax- but on top of this I do mystery shopping as and when ( negligible amount less than 50 quid, but I get free meals and you cant grumble at that) I do focus groups that pay quite well ( 40= upwards) again as and when I can - obviously they are popular.

I also do freelance work doing inventories on rented properties, again as and when and Ive just started this really, reckon on this taking about 250 a month.

Of copurse on top of this I do all the freebie sites, quidco, pigsback, yougov etc which again varies but I guess on about 50pcm on a slack month, some months its more depending on quidco payouts.

I also get every freebie going that i any use to me.

Ive toyed with the idea of bar work too as I do love it, but I expect Id be knackered after doing a 40 hour week plus extras and besides I dont need all this to live on, Im just banking the money cos Im a committed moneysavingexpert :cool:

Blimey! and you still have time to post on here every day and fill in your tax returns etc.
Bottle some of that lynzpower, you could make a fortune;)

Donnaalana

We did exactly the same as you and used online calculators to work out what we might be able to borrow. Chat to a good financial advisor who will help. Ours is great - based in Cornwall but we're in Kent and had no probs.

TTMCMschine

olive84 wrote: »

My bf and I have a 100% mortgage and earn roughly what you do. We're borrowing £177,500. Having said that neither of us have any debt, so no other monthly payments. I know there are some people on this forum who are going to say that we're mad, but believe it or not we can afford it. We took a long long time going over the costs of owning a house though, because obviously its not just the mortgage, but c tax, bills and all the rest of it.

So, I just wanted to add something positive here, because it can be done. Talk to a broker because they will let you know what you can really borrow!

So in other words you have an interest only mortgage. You're not paying anything off the capital, so you're just renting at a very high cost from the bank, you are not actually buying until you repay the £177,500 at the end - Personally I can think of better things to spend my money on. I rent from a landlady instead, I bet I have a far bigger house than you & in a better location & I only pay £400 pm.

In 25 years time you'll be struggling to find £177,500 because most of your money is going in interest on your loan. In 3 years I already have saved & made (from investing my savings) £130K.

Which is the better plan financially?

PS the wife is a full time mum & my salary is not as much as your combined salaries - & it still works out better.

TTMCMschine

CB1979 wrote: »

hmm interesting phirefly, but what happens in 25 years of renting, you have nothing to show for it.

whereas all i have to do is sell my place and give back £165k to the banks, it's quite likely though, that the price of my place would have gone up a fair bit.

basic I know, but THAT is a FACT!

And if houses have gone up in value so that you can sell it & repay the principle, WHERE do you LIVE afterwards? Or are you planning on renting at that point or just taking out another (even bigger mortgage).

Your sums don't add up & THATS a FACT!

aloiseb

My husband was unlucky enough to buy a flat which turned out to have lease and management problems just at the end of the last property boom (Isn't hindsight a wonderful thing?!)
Because of these problems - which were basically the reason why it was cheap enough for him to afford- it became impossible to sell a year later, when a) prices had taken a downturn and b) he'd met me and we wanted a house.
We had to sell the flat at a knockdown price (half what he paid) and are still feeling the financial consequences twelve years on.
Moral of story: Don't be tempted to buy something which looks affordable but may have problems which are unbelievably expensive, or even impossible, to resolve,making YOUR property the one which suffers negative equity. Make sure the one you buy, if you do, is not going to be one you regret.

$$$_12

Definitely save, save, save as much as you can before you move out.

London is unusual in that the majority of people rent rather than buy (and I would imagine it's even more true at your age).

I would definitely rent before you buy (why not try a flat share with another couple to save costs?). If nothing else you can try out areas of London before you buy (and you'll have some stories to share with the kids when you're older).

With relationships - things can change (particularly when you are youngish). Have you and the OH lived together before? Adding the pressure of a massive economic burden that is a mortgage to the mix has placed a strain on many a couple's relationship. Personally I would enjoy some time together before adding a mortgage (it's certainly not dead money if viewed from that perspective).

The average age of the FTB is 30 something. A lot can happen in 10 years. You could be both earning lots of cash (or not). The economy could be booming (or not) House prices may have gone up (or not). Either way - the past ten years is no guide to the future.

The missus and I looked at buying a place in London shortly after we got married in 2003. Thank goodness we didn't as soon afterwards she was diagnosed with cancer and her debts which seemed manageable beforehand no longer were.

Fortunately I had savings (would have been wiped out if we'd bought) which helped to smooth things out while she was recovering. And we weren't depending on both of us earning to pay the rent (would have been if paying a mortgage).

Melissa177

TTMCMschine wrote: »

So in other words you have an interest only mortgage. You're not paying anything off the capital, so you're just renting at a very high cost from the bank, you are not actually buying until you repay the £177,500 at the end - Personally I can think of better things to spend my money on. I rent from a landlady instead, I bet I have a far bigger house than you & in a better location & I only pay £400 pm.

In 25 years time you'll be struggling to find £177,500 because most of your money is going in interest on your loan. In 3 years I already have saved & made (from investing my savings) £130K.

Which is the better plan financially?

PS the wife is a full time mum & my salary is not as much as your combined salaries - & it still works out better.

Whoops, I thanked this post rather than quoting it.

There is nothing wrong with an interest-only mortgage, if you can make more money elsewhere with the additional money you would be paying on a repayment mortgage (ie, perhaps in one of those 10% regular saver accounts, in an ISA, a unit trust, index linked fund (as long as you're feeling bullish about the market!) etc.

I DO think rent is dead money. I'm paying as much on my interest-only mortgage than I would be on rent in London. And I have a much nicer place. And I can decorate my place how I like. And I get the capital appreciation out of it as well. If the market goes down, I sit tight for a bit. I'm confident in my "investment" though (not really an "investment", as it's my only property, and you always need somewhere to live)


I might have had a different attitutude if I could have rented for significantly less than buying a place on an interest only mortgage, but that wasn't going to happen.

victoriaplum1

I bought my first house in 2002 when I was only earning 15k I had a 100% mortgage fixed for a few years....house cost 49k I lent 53k (through independant broker), was scary and not cheapest way to do it but paid off cos house prices went up and I ended up selling last year for 96k, paid off all my student and credit card debts which I would never have been able to do so fast any other way. Now I have a house with my fiance, it cost us 105k cos it needs a bit of work but its great, we had 95% mortgage this time. Its not easy or cheap but am glad we bought again instead of renting, we looked into all sorts of schemes part ownership, renting, low cost housing options etc but ended up doing the tried and tested. We rented privately off my mum for a while and that was a mare...my advice never ever mix family and business, well not with my mum anyway, she is ruthless!

Snow_Dog

TTMCMschine wrote: »

So in other words you have an interest only mortgage. You're not paying anything off the capital, so you're just renting at a very high cost from the bank, you are not actually buying until you repay the £177,500 at the end - Personally I can think of better things to spend my money on. I rent from a landlady instead, I bet I have a far bigger house than you & in a better location & I only pay £400 pm.

In 25 years time you'll be struggling to find £177,500 because most of your money is going in interest on your loan. In 3 years I already have saved & made (from investing my savings) £130K.

Which is the better plan financially?

PS the wife is a full time mum & my salary is not as much as your combined salaries - & it still works out better.

Errrr, where in olive84's post that you quoted does it state they are paying interest only? It states they have a 100% mortgage, which means they borrowed 100% of the value of the property but I cannot see where they admit to it being interest only.

dean182

We have rented for 8 years and I would never consider that money to be 'dead' it has kept a roof over my husband, children and I.

We are about to purchase our first property and it is with a 100% mortgage, we are not buying to make money, the house has everything that we could possibly want from our first home and is large enough for our family to grow up in. We will be paying the same for the mortgage as we do rent and it isn't interest only.

Given the chance again though my husband and I would have stayed at home and saved for a deposit etc. it is the best possibly start that you can give yourself. There is probebly no other time in your life where your outgoings will be so small.

All the best whatever your decision!