Just bought a house, wrong move?

Lavendyr

fac73 wrote: »

Personally I think if this is the case, the value of your house in the market doesn't mean much. It's a marathon, not a sprint.

That's true, as long as you can afford to keep up repayments on it. That's my main concern - that with the OP's current debt and salary levels (and lack of savings), even if it is a "home" rather than an "investment", it might still be untenable. And the original post did sound as though the OP was relying on the house making money in order for it to remain affordable.

Lavendyr

Reason123 wrote: »

Because most of my family and friends are in the building trade, i get work done for a case of beer. So materials of about £1000 over the next couple of years ive budgetted for.

That's good at least as it means you should certainly be able to raise the house value some way through improvements without having to spend too much yourself.

Reason123 wrote: »

Im on interest only 926 a month.

Have you worked out how you will repay the capital at the end of the mortgage? Or will you switch to a repayment mortgage after a few years time?

Reason123 wrote: »

after alls bills etc between us we are left with about 800 a month to play with. The 12.5k is working out to be 125 a month inc in the 926 a month

That's not too bad, so you can afford to save quite a reasonable sum each month too. Have you looked into the best saving options, e.g. ISAs, high-interest savings accounts, regular savers etc?

I wish you both the best in your new home.

Reason123

I assume im the 'OP'??
And i didnt buy the house for it to remain affordable. Il just remortgage at the best rate possible at the time. I suppose i was fuelled by the 90% mortgage outstanding compared to future value. But if its 100% so be it. Or if i still need 100%+ It was the info i was fed from Countrywide...

Reason123

I intend to swith to repayment after 2 years with my new mortgage co./rate

I have set up both a Natwest ISA and high interest savings account. Plus a Holiday saving with my work.

Doozergirl

That £800 a month to play with, you should be saving hard to get yourself the best mortgage rate possible and to get you out of negative equity! Negative equity = bad. It would have been better to have left your debt unsecured really.

£1000 for materials to do a house? Where's you kitchen coming from? A skip?

Countrywide will use a panel, yes. It probably won't even cover half the market.

You'll be alright if this is your wake-up. You're evidently not entirely stupid

Reason123

I have started saving and will save the most i can for my next mortgage.
Kitchen is going to be revamped rather than replaced. Bath suite plus paint is coming from B&Q as got a brother of a friend working there to get me employees discount.

Doozergirl

Fair 'nuff.

I would just warn over using emplyee discounts naughtily. My uncle works for them and won't even sneak me a thing because people do regularly lose their jobs over abuse of the system

guppy

I assume you'd be renting if you hadn't bought this?

Is your mortgage interest much more than renting?

Can you pay the mortgage ok? And is your job reasonably secure?

Everyone need somewhere to live, and as long as you can keep up with the repayments and you like where you live, why worry so much? Especially now you're committed and have paid all the fees.

hethmar

Im with guppy - its not an expensive house compared with the market - how much was your rent - and that was money for someone elses property. Relax, you can afford the payments now and you have fixed them - though 2 year is an iffy period. Get your kitchen revamped with new doors, sort the bathroom and then enjoy your first house. No one knows how the market may change but in my humble opinion I cant see it can drop that drastically when demand is still outstripping supply.

Rick62

countrywide said that with the current market increase on average of 5% my house in 2 years time 'should' be worth 170k

That has got to be one of the most irrresponsible things I've heard in a long time. There is no guarantee at all that prices will continue up. Its good you're buying as a home, not an investment and that you can get the work done cheaply, but the more you can set aside to reduce the mortgage over the next couple of years the better - having a 115% mortgage in todays climate is not great!

Did the mortgage adviser not recommend going for a 5 year fix? 2 years is a short time to get your finances in better order.