Taking the biggest mortgage i can out

motherofstudents

It's so hard when you don't have a crystal ball. Our first mortgage was 8% and I can still remember the day when that shot up to 15% - very scary. I think you just can't say what is going to happen to the housing market/economy, not with any certainty anyway so all you can do is do what is best for you. Personally I would not go for a one bed flat. That is just my view and what is right for me may not work for you.

Just something my grandad told me (so I am going back quite far now to the days when most people rented). He had the chance to buy a house for £400 (four hundred pounds) and turned it down as he was worried he wouldn't be able to keep up the payments, he might lose his job etc. Instead he rented at more than it would have cost to buy and kicked himself years later.

And if it all goes pear shaped there's always the bank of mum and dad, I like that !

EvilJaz

Decided probably wrongfully i am going to go for it.

If i rent i will kick myself i didn't buy. And if i buy a cheaper flat i will kick myself in a few years line when i have to sell it and payout £10k+ to buy a house of that standard.

Any issues like car, i got the bank of mum and dad. Car issues can easily be solved as my dad use to be a mechanic. I get a 10% discount on gas and electricity.

Worse case scenario if in the first year or so i start struggling i can rent out the spare room cheaply. I'll switch my expensive nights out with BBQ's in my own garden hehe.

bodmil

EvilJaz wrote: »

Motch, what repayments are you basing that off?

I did make an error in my previous post, the house value is 240k. The mortgage would be 215k.

I think i was going 4.44% fixed for 5 years.

The renting the room is a good option i guess for a year or so could ask around if any friends were interested. Is there any good websites where i can find out some more info about renting out the spare room?

Try spareroom.co.UK or easyroommate both for a place to rent or for potential rental income if you were to buy. Absolutely don't use all of your money, you will need an emergency fund at the beginning and get a lodger in as soon as possible, the sooner you get used to sharing the better. I have struggled a little to get my head around sharing my pride and joy but it pays all but £32 of my mortgage so it's worth it from day one!

motch

EvilJaz wrote: »

Motch, what repayments are you basing that off?

I did make an error in my previous post, the house value is 240k. The mortgage would be 215k.

I think i was going 4.44% fixed for 5 years.

The renting the room is a good option i guess for a year or so could ask around if any friends were interested. Is there any good websites where i can find out some more info about renting out the spare room?

Hi EJ

from your figures £240k, 25 year term, 2% rate would make it £1017 per month.

on your figures below, I make it.
£1188 per month on £215k. 4.44% with a 25 year mortgage (i've based that on 4.44% for the whole 25 year term)

£773 for £140K as above

EvilJaz

Having a 35 year mortgage

whatyadoinsucka

i'd avoid a massive mortgage for the fact that house prices aren't going up in the insane way they did during the 2000s..

the economy is still shoddy, base rate doesn't seem to be moving (but when it does it will go). i'm repaying £750net a month on our mortgage just to knock it down and build the equity up, i don't see the point presently of moving as doubling/trebling my interest rate per month is pointless and what we can reduce in equity presently vast outweighs paying towards the banks profit.

motch

EvilJaz wrote: »

Having a 35 year mortgage

Just remember after 5 years that mortgage will hardly go down, would be like renting as such.

Another option although would be a complete step back in alot of peoples minds is to move back in with Parents, if enough space. Tell them you're saving like mad nutters for a house in a few years, building up a big deposit for a better rate and the right house at the right time/price. You might even get £0 rent if you're lucky (taking the above bit into account)

Also are parents of the mindset - Property ALWAYS goes up ?

EvilJaz

Thanks for all the advice.

What i've decided is to not be in a rush to get a house and hope prices remain static, allowing me time to build more and more equity. That being said if a house comes on the market which i 'love' and is at say 240k i will most likely go for it as i am confident after the discussion here i can afford it.

mrluke

Jesus there's a lot of haters on this forum !

I'm in a similar position to you

We also have a 50k joint income and a 10% deposit

All the houses round here which are sub 200k need a *lot* of work .

We are looking to spend 230k inc deposit

Go for it , remember buy cheap you buy twice .

addyboy1982

mrluke wrote: »

Jesus there's a lot of haters on this forum !

I'm in a similar position to you

We also have a 50k joint income and a 10% deposit

All the houses round here which are sub 200k need a *lot* of work .

We are looking to spend 230k inc deposit

Go for it , remember buy cheap you buy twice .

Nothing wrong with doing a lot of work. I bought my place on 85% LTV knowing it needed loads doing. 2 years down the line now and when I've finished doing it up it should be worth £35k more than I paid. Not bad when I'll have spent £21k on it:

All depends on what the market does of course, but I've been overpaying the mortgage so regardless of what happens I'll have a lot more equity than when I bought it.