Half a house

Silence101

We're seeing the house again today. I've just realised we've only seen it on weekends, meaning we've never heard the construction noises! As ours is one of the first houses built, I think we're going to have to deal with a lot of that for the time being.
The house is semi detached and we'll be the first moving in, which means we'll be able to put shelves up without disturbing anyone, if we do it asap.

We're now thinking of colour schemes. We're planning on repainting and recovering some of our furniture, but can't decide if we should have dark walls and pale furniture or vice versa. With the kids still young I'm thinking darker furniture might make more sense!

We saw some fridges and dishwasher in a local charity shop, so might get them from there for the time being. Most of our furniture is from charity shops, bought "for the time being" and now we can't justify replacing them! At least Mr Silence has agreed we can paint them.

Kittenkirst

Oooh with being the first people I the development you can take advantage of workmen on site. Some of the people on our new build development had all their mirrors, TVs, curtain poles, towel rails etc put up by the building firm. They just went in and nicely asked the site manager or sales guys (worth an ask, the worst they can do is say no!)

Good luck for your exchange

Silence101

Oh, that would be a bonus! I don't know if I'd have the guts to do it, but it would be handy!
I'm getting a bit worried about timings between getting the floor in, moving the furniture and the eldest possibly starting at the new school before we get it all done. I initially thought we might be on air beds in this house, but it's probably going to be the opposite if she gets a space soon!

benj111

Apologies if I've missed something, but I cant understand why youre saving a deposit towards the shared ownership portion so soon/ at all.
If when you came to buy that part would you not also have 50% equity from the half of the house you already own?
And even if you do still need to save for a deposit, why have separate pots for deposit and emergency? Your deposit pot is going to have at least £5k in it for a very long time so it seems strange to also have an emergency pot, unless your deposit is in equities or such.
The way I work it is that we essentially save for the overpayment (10%) that empties out the savings and in the interim that forms our emergency fund. We can claw some of the overpayment back if needed by taking a payment holiday and we have enough cash to cover smaller emergencies.
In that way our emergency fund is also our overpayment fund. I also has the advantage of allowing you to take advantage of high interest regular savers etc.

Silence101

The reason I'm thinking of 2 different pots is incase the house price goes down (as it's a new build) which means the money we've overpayed will be worth less than the £ value by the time we come to try and buy more shares. I think it's a bit less risky to have cash savings as well as trying to overpay, so that if the worse comes to the worse we might be able to buy more shares upfront without needing a mortgage, as we may end up in negative equity in one part, but have enough cash to buy when the share price is low.
It's probably a flawed logic, but I would like to take advantage of the price fall, if it happens.

We'd also prefer to keep our emergency fund separate, as it's too easy for me to dip into savings if I see that we are not progressing towards our goal quick enough (I realise that any progress is better than none, but my willpower tends to ebb away sometimes so having separate pots makes it easier to stay on track, at least I hope so!)

benj111

Ok that makes sense, you know your self and your situation better than I. Just keep in mind that as far as negative equity etc is concerned £1 overpaid is the same as £1 in a savings account, any over payment you make would reduce potential negative equity, except in a scenario where you would still have negative equity and the bank wouldn't lend you money to buy another share. Also keep in mind what interest you're paying on your mortgage v what your earning from investments. If you have £50k mortgage charging 4% and a deposit sitting in your bank account earning 2%, its a bit different to earning 4% while paying 2% on the mortgage.
Anyway good luck.

Silence101

Thanks! Yes that's the scenario I'm thinking might happen. I realise that financially, with rates as they are, overpaying makes more sense, but I think I'm willing to sacrifice some interest to keep some options available. We'll be working on both goals together, so hopefully it will work out either way.

Silence101

We're still meant to complete on Friday, although we haven't exchanged yet. I'm trying to think about what we need to take to the house on the first day.
At the moment, we have a budget of £300 per room for flooring. As we still haven't made it to the carpet shop, I don't know how realistic it is! Mr Silence think he can do the fitting, apart from the stairs.

Tropically

Silence, I'm on your side. You can't beat liquidity. £1 in a mortgage is much more difficult to access than £1 in a savings account. Cash is king!

I also keep emergency funds separate because one can have a positive emergency (or at least, I pretend it is an emergency) like a spontaneous opportunity. If you don't have troubles with debts - you don't seem to be a person who spends more than they earn - then it doesn't hurt to have them separate. I would do exactly what you are doing.

What is your interest rate?

Silence101

It's 1.8% fixed for the first 2 years. My ISA is currently offering a whopping (sarcastic) 1.25% or is it 1.15%. Either way it's not great, but for the first 2 years we're not losing too much by not overpaying as much as possible. Once we're out of the fixed rate, we'll have to rethink things, but hopefully we'll have saved enough to be able to overpay a bit more. Time will tell!