Just bought a house, wrong move?

glitzy

Hi Reason123

I have been on the housing market for awhile and to know when the right time is hard, so just brave it out - you are young, even if renting was cheaper, you have got your foot on the ladder.

Can you move some of your debt to 0% cards or low rate for life bt? You should live in your house for awhile before you do too many changes - we moved last dec & our kitchen & bathroom need updating but we just gave the whole house a coat of paint, & will save up 1st.

If you post a full SOA you could be making more savings, people have excellent ideas on here, you definitely came to the right place for advice.

When your 2 yrs are up i would defo try to get a repayment mortgage & ditch the interest only. Keep us updated as to how your doing- good luck.

daisyroots_2

hethmar is right - for the housing market to crash seriously and permanently, you need over supply. This is one of the factors in the US housing market crash - they have so much land, they can build and build, hence over supply. We are a small and overcrowded island with strict planning laws, I don't see anything in the near future which will change this. So the fundamental economic principle of supply and demand will prevail for a few decades yet.

As doosergirl says, the important thing is not to get into any more debt. Get your house looking great, as you plan - it will bring you a lot of joy. In two years time you'll have a lovely house and - I suspect - it will be worth a little bit more than what you've just paid. Brace yourselves for when that fixed interest period expires, though. You've done well to invest in a home, live modestly for the next few years and I believe you'll reap the rewards in future. Good Luck

Guy_Montag

yup what with only having 85% of the country unbuilt on, we're seriously short of land:rolleyes:

What we are short of is land with planning permission, but that only takes the stroke of a pen to change:o

Gorgeous_George

Reason123 wrote: »

Why would you not recommend 2 years fixed?

1. Two years passes so quickly. You'll be battling the same issues again and suffering more stress.

2. The fees such as valuations, exit fees, arrangement fees and legal fees will be paid again after just two years. APRs do not cover these costs.

3. Things change. You may find that you are stuck in the SVR.

I'm on a life of mortgage base rate tracker. Whilst this might not suit you, I don't need to keep paying the fees in paragraph number 2 above.

Even fixing for five years is not ideal. At the right time, grab a ten year fix.



GG

Ed_Zep

Reason123 wrote: »

I hadnt realised my Q was on another forum. Interesting read...
Slightly more harsh over there than on her...LOL
I registerd, but unable to reply to it?

Don't know if this has been mentioned but you could let a room to help. You've probably thought of this. Off the top of my head, you can let for £80 p.w. tax-free.

I don't think house prices will crash. I don't know what renting costs where you are but if you're paying something off your mortgage each month it's all for the good.

Even if prices fall, it won't be by too much.

RedTomato

daisyroots wrote: »

hethmar is right - for the housing market to crash seriously and permanently, you need over supply. This is one of the factors in the US housing market crash - they have so much land, they can build and build, hence over supply. We are a small and overcrowded island with strict planning laws, I don't see anything in the near future which will change this. So the fundamental economic principle of supply and demand will prevail for a few decades yet.

I was in Asia during their last crash. Places like Hong Kong and Tokyo were over crowded with no spare land and their prices still tanked for a long long time. Really, the only reason prices here can keep going up is if banks keep lending ever higher sums. The current problems surely mean that at least temporarily, we will not see such unrestrained lending, hence the OP can't be sure that prices will be higher when his current fixed ends, hence he might find himself with too little equity for a good re-mortgage.

Anyway, OP, you have obviously found yourself a good woman there! Follow her lead, work really hard to save over the next couple of years so that you are in a better position when that re-mortgage is due and follow all the tips on here for saving money. Use freecycle to furnish your house. Other than that, just enjoy life (by finding fun cheap things to do, not with drinking, expensive food and holidays), no point in worrying about the mortgage now, it's done.

By the way, I find housepricecrash incredibly useful for learning about financial terms and economics, you just have to put the pointless posters, the racists and sexists on ignore and you'll learn masses. They think I'm a guru at work because I'd warned them all about the forthcoming subprime problems having read up about it on links from that site about 6 months ago.
It's really worth educating yourself about finance so you get to learn simple things that mean that banks etc can't take you for a ride so easily.

Reason123

Cheers guys, some real help and positives in the last few posts.

I do have a further question though.

If over the next 2 years i set aside £200 a month (just shy of 5k)
Am i best overpaying my interest only mortgage, overpaying my unsecured loan, or saving for a lump sum to pay off either 5k of mortgage or loan - when i re-mortgage..?

kingkano

Guy_Montag wrote: »

yup what with only having 85% of the country unbuilt on, we're seriously short of land:rolleyes:

What we are short of is land with planning permission, but that only takes the stroke of a pen to change:o

....in locations where people want them. Building thousands of 'affordable houses' in liverpool or something doesnt help people whose jobs are in london.

Guy_Montag

kingkano wrote: »

....in locations where people want them. Building thousands of 'affordable houses' in liverpool or something doesnt help people whose jobs are in london.

That's a fair point, so the next step is to encourage people to move where the housing is. HM Govt. can do that by moving the civil service & Beeb out of London. But as I've often advocated if business rates were substantially cut in, for example, the north east, which desperately needs an entrepreneurial boost, then people will move out chasing the jobs.


I'll also add that you need to make the housing attractive; 10,000 city centre new-builds in Liverpool aren't very appealing. 10,000 mixed houses with large gardens in leafy new-villages dotted round the north might be better at encouraging people out of the SE.

daisyroots_2

Reason123 wrote: »

If over the next 2 years i set aside £200 a month (just shy of 5k)
Am i best overpaying my interest only mortgage, overpaying my unsecured loan, or saving for a lump sum to pay off either 5k of mortgage or loan - when i re-mortgage..?

Hard to answer without knowing the interest rates on each. Also, is there a penalty for early repayment of your mortgage ? I imagine that the interest on the unsecured loan is probably the highest, so that will be the one to reduce first. Rule of thumb - pay off debt first !:money: