Bought property, big mistake :( any words of wisdom?

Fedupofworrying86

Slinky wrote: »

If you are wanting to move in 2 years, will the development you are on be finished then (they've been building houses on a site near me for 7 years now and still aren't finished and it's only about 400 properties)? You could be competing selling your second hand home against new properties if they haven't finished the site. Renting this flat out may be a better option at that time than selling.

But who knows what will happen in the next couple of years, if crystal balls were accurate, we'd all be rich.

Our development is finished, it is a small one by a local developer and all flats were finished when we moved in thankfully! Yes renting it out wouldnt definitely be an option if needed although i am aiming to keep it in amazing condition to appeal to other buyers as an almost new-like home, not sure a tenant would help with that

Pixie5740

Fedupofworrying86 wrote: »

P.s- overpayments on a mortgage- we can do 10% per year. Is it best to save that 10% in a savings account and pay once a year (or as close as we can afford) or do overpayments monthly- is the new amount owed and therefore interest due, recalculated every time we pay? I am presuming not as our repayments are the same every month for our 2 year fixed period...not sure I fully understand overpaying, thanks again all

You'll need to check the terms of your mortgage. Some let you make one large overpayment a year whilst others have a maximum you can overpay at any one time.


I doubt you'd get a better interest rate on a savings account than you're paying out on your mortgage.

Libber

Don't know if this counts as "words of wisdom", but here's my tuppence.

First of all, stop worrying about might-have-beens. You've made your decision, you (probably!) don't have a time machine with which to go back and un-buy the house, so stop fretting about whether or not it was a good decision and instead focus on what you're going to do now.

Second, you say you may only want to stay for 2-3 years and you can overpay up to 10%/year. If you overpay the full 10%/year, then you'll have paid off 35-40% of your loan at the end of the three years and your outstanding debt should be around 50-60% of your purchase price, depending on how big your deposit was. Even in a really big crash like the one in the late 80s/early 90s, you'd be unlikely to end up in negative equity and would be able to move on. Yes, you'd take a loss but it wouldn't be the end of the world.

Fedupofworrying86

warehouse wrote: »

We purchased a flat in 1988, paid through the nose on our endownment mortgage for 8 years and sold it for an £11K loss!! We then bought a bigger place at the bottom of the market and sold for a massive profit in 2006.

Once you're on the ladder then long term you will be big winners, stop thinking short term, you'll be fine.

Good shout with Watford as well, with the new Metropolitan rail link prices are only going one way.

Thanks Warehouse, this is very reassuring in away, just hearing how it worked out in the end ...I just want our efforts to be worth it as we have put saving ahead of doing a lot of things to get our deposit and now I was supposed to be starting to do more but just feel so scared that I need to keep being extremely cautious to make up for any loss we might make- ridiculous to some people but I think I've just read too many scare stories and complaints from those wanting to become first time buyers...

Very interesting to think that if the market did dip, our next property might be cheaper too though, it's all relative I suppose. I imagine that whatever happens we can't lose that much and if we are careful we will just absorb it as much as poss and move on...

As our mortgage is only fixed for 2 years I imagine I will be back on here asking for advice again then, could go either way right now but I hate the though of being trapped so fingers crossed after the stress of the past year, karma will help us out!!

Now to try and be more positive, don't seem to have stuck to my New Years resolution of 'worry less' so far!!

Winter_Phoenix

There are pros and cons to owning your home rather than renting it, but I'd say that the advantages far outweigh the disadvantages. If you ever fall on hard times, a house/flat which you own can be made to work for you.

I have a friend who owns a house in a big city. When her work dried up, she let out a bedroom to a lodger. Then she moved all her own things into what had been the lounge, and let out her own bedroom to another lodger. She rented out her garage to someone who wanted secure storage, and even her driveway to someone who wanted off-road parking. It paid the bills until her work picked up again, and her only complaint was that the sofa-bed wasn't much fun to sleep on long term! And at the end of the difficult time, she still had her house - if she'd been renting, she would probably have been evicted for being unable to pay her rent and utilities.

So take heart - you've made the right decision.

Crashy_Time

Fedupofworrying86 wrote: »

Well mainly because I am worried that having bought a new build flat at the peak of the market and looking to move further up to the midlands in say 3 years if we can ensure we could work out of London, that we might have to sell for less than we paid, given the way the market seems to be going. I've just been reading the predictions of prices stalling and seeing the out crys of people complaining after the huge price increases seen in London this year....I'm just lacking confidence in what we've done. Il be 100% happy if we sell for what we bought for, I don't care about profit, I've just seen so much negativity in the past 3 months that I'm worried our effort to get out of renting might not work out. Sounds silly to worry in advance but because we only moved in November I suppose it's just on my mind a lot and it's become very consuming!

You are going to lose money, accept it and move on, most importantly LEARN FROM YOUR MISTAKE, and don`t listen to the herd in future.

nubbins

Crashy_Time wrote: »

You are going to lose money, accept it and move on, most importantly LEARN FROM YOUR MISTAKE, and don`t listen to the herd in future.

This chappy is a prime example of why you should get on the ladder as and when you can afford it. I think the houses he was looking at a few years ago for 275k are now selling for at least 100k more. He's still waiting for "the crash" hence the name, bless him

Toptom1

House price values go up and down its basicaly like having money on stocks and shares. If you sat on the house you will always make money but you have a short term plan so it is hard to predict what the London prices will be like as the housing market is riged. London house prices will always be high but they are stupidly over priced at the moment. With it being winter and the elections in May coming up the market will be quiet but I predict it to pick up in the summer.

I'm struggling to get on the proberty ladder at the moment and looking at buying but I'm looking for a home not an investment.

Lord_Baltimore

Fedupofworrying86 wrote: »

Any advice to pull me out of my negativity?

Yes. You're young, healthy, articulate, intelligent, have a partner and you have your whole life ahead of you.

You also worry too much .

Crashy_Time

Toptom1 wrote: »

House price values go up and down its basicaly like having money on stocks and shares. If you sat on the house you will always make money but you have a short term plan so it is hard to predict what the London prices will be like as the housing market is riged. London house prices will always be high but they are stupidly over priced at the moment. With it being winter and the elections in May coming up the market will be quiet but I predict it to pick up in the summer.

I'm struggling to get on the proberty ladder at the moment and looking at buying but I'm looking for a home not an investment.

Problem is that you can`t cash out of property like stocks and shares, it is an illiquid investment, being highly leveraged (Interest Only for example) makes this even more dangerous IMO, especially in the massive bubble that we now have, which could pop at any time.