Advice request: Buying a house outright.

epichouse

Thanks Katgrit.

My parents would not be at any risk. I just didn't want to borrow and involve them because I am a bit stubborn.

They are in a good financial position - I just meant that they are no longer bringing much in by means of pensions and that savings are still paying pretty poor interest rates, so perhaps it would be beneficial to sort it out between us.

baldelectrician

I would suggest you use a professional to fix the price


Go to a well known surveyors and ask for a survey- as you are putting your money in I would suggest you pay for a full structural survey.


This will be around the £500 mark but will pick up lots of stuff you know about and some you don't know.


Then you (and the vendors) will have an accurate value of the property.


You can all then agree on a price- from what you are saying you could come with a survey and cost in line with your discounted price.


A survey gives you the power and knowledge to move in or move on- its a no brainer if you are going to spend this amount of money on a house that needs work.

epichouse

G-M, thanks for that.

Because I still live at my parents house and the house is very close by, there would be no problem at all buying the house,doing things to it whilst I stay here, then moving in the new house fully much later down the line. We have talked about it, and that is fine. In fact, they were the ones to suggest it. They are (strangely!) not in much of a rush to get shut of me, so it is all good there.

Yes, good thinking. I'd have to plan out a bit better what needs doing where and making sure I maximise the efficiency. The garden can wait. I should probably get the heating/fireplaces and wiring done first in the front of the house and remove the pillar at the back of the house before I do anything else. Flooring can wait, along with redecorating.

As the house is identical in style to my parents, fortunately I know that the pillar can be removed because we have done so here. It really does allow much more light into the house, which gets a bit dark and boxy with the pillar there. It is a good idea to get the surveyor to focus their checks on this kind of thing though, so thanks for that. I would probably have just let them crack on with it and not have mentioned it.

I don't know what the score is with the will technicalities. All I know is that the house was left to the two sons and I understand that it will be theirs to do what they want with - which is why they've been kind enough to suggest I'd get a good deal. They are both in agreement, so I don't believe that there are issues with some legal-type or anybody else involved who'd be needing to maximise the price.

epichouse

Cheers bald-electrician.

From what has been said by all and yourself so far, I now think I should go for a proper survey.

You're all right, if I am ploughing the majority of my life savings into it I suppose £500 is worth paying for soundness of mind - and as you say, just being better informed about the state of the house.

I would be extremely surprised if there were any problems, but I suppose I'd be kicking myself if something happened. I assumed that the sellers or estate agents would have done this to assess the price, but I now understand that they do not investigate things that thoroughly and that it rests upon me.

It seems a bit of a grey area on whether the work 'needs' doing as such..... There is nothing 'wrong' with the way it is, it is more in terms of work I'd like to have done to it to make it brighter and feel more like my own home.

(As we have been so close to the previous owner, well, for all of my life anyway, I do worry that in my mind it will always be me living in 'their' house and not my own....if that makes sense!). I perhaps worry too much.

xylophone

Assuming all goes well and you buy the property, I'd recommend that you have any major works done before you move in.

In particular, does the house need rewiring?

Do you need a new boiler?

Both the above can be very disruptive - you'll need the floorboards up and it is very likely that plaster work will be damaged and need reinstating.

In the case of the boiler, you may need a bigger diameter supply pipe - a relative found that a concrete floor had to be dug out to facilitate this.

Doozergirl

That pillar is almost certainly holding something up. People don't put them in place for fun. You're going to need professional advice on how to get rid of it. The solution will cost money.

If you don't know anything about houses, then a survey is a good idea. A comprehensive one will let you know what maintenance is required in the short to medium term. It's also a negotiating tool in itself.

And the surveyor can tell you what that pillar is holding up!

Fosterdog

If you do go down the mortgage route it would be worth speaking to whichever bank or building society you have your current account and or savings with. They can see your account history and are in a better place to judge your affordability if you don't have much of a credit history. However even just a mobile phone on contract counts as credit so if you are not on PAYG you have more of a credit history than you realise.

I'd agree with getting the survey done but also get three quotes each for all of the other work you want done, that way you can calculate what your final figure will be and then decide whether to buy now without a mortgage and just get the basics done now and gradually do the rest or whether you would be better getting a mortgage now and getting all of the work done before you move in. Always allow extra as a buffer because things do and most probably will go wrong and will cost more than you planned.

If you are just moving out of your parents house you also need to consider things like the cost of furniture and appliances, even if you get them with the house they will need replacing at some point.

TBagpuss

I'd suggest that you speak to your bank and to a mortgage adviser and find out what you could borrow by way of mortgage, and on what rates. It might well be worth you borrowing (say) £25-£30K so you can afford to bridge the gap on the house price if need be, and to pay for any rewiring and so on.

Although your lack of previous borrowing history is relevant to your credit situation, it's not the only thing lenders look at. They will also look at your income, whether you are on the electoral roll, and the % of the property value that you are looking to borrow.

Many mortgages offer to option to overpay - you would need to check the specifics but with a lot of mortgages you can overpay up to 10% without penalty, even during any fixed period, and once the fix is ended and you revert to the SVR you can overpay as much as you like, so borrowing doesn't automatically mean having a mortgage for the next 25 years.

Mortgage rates are typically lower than other forms of borrowing, so a small mortgage rather than (say) taking out a personal loan to fund hone improvements is likely to be better value, particularly if you then overpay!

If you and your parents go down the route of you borrowing from them, I suggest you both speak to (separate) solicitors to get advice about that - it would be possible to set it up as a private mortgage so they had a legal charge over your house to secure their money, and formal arrangements about repayment and interest. This isn't just to protect both sides if you eve had any dispute with them, but it also makes things clearer if there were ever issues relating to Care Home fees, or with dealing with their estates if they were to die.

epichouse

I would just like to say thanks to all of you, you've all been very helpful (and patient!). What a lovely bunch of folk.

There's been a lot of information, I think I need a bit more time to process it all.

Off the top of my head, in short, as I understand it, I believe I need to:

*Look into getting the house surveyed, including mentioning any plans I have to alter the house.
*See what the surveyor says and ask advice on what they think would need doing.
*Ask the surveyor what effect that might have on the recommended estate-agent price.
*Get some rough-quotes for any work I do have planned to have done, factor in a decent factor of safety. (We know already (from my parents house) that the pillar can be taken out, but we'd have it checked regardless)
*Depending on these quotes and the surveyor, try and drop the suggested price to cover some this work (as some isn't strictly necessary, just things I'd want to do).
*Put it to the sellers that to get things moving quickly and smoothly, the said offer is the most suitable.
*If it is all looking good, look into getting a solicitor to take care of the 'conveyancing'.
*If it isn't looking good and it causes offence, I go back, take a more serious look at borrowing the rest (by whichever means) and put in a bit of a higher offer to close the gap and have more leeway.

Phew. That's quite a lot. (It takes me about 2 weeks to choose a mobile phone and a contract! lol).....

steampowered

There are many advantages to getting a mortgage. These include:

1) Being able to afford to do work on the property without relying on your parents.
2) Ensuring you have a sufficient cash reserve to buy furniture, do decorating and so on.
3) Mortgages are an extremely cheap way of borrowing money. Interest rates at the moment are unbelievably low. As you would presumably have a low loan to value ratio your mortgage should be especially cheap. If you have excess funds you could invest those and could expect get a higher return than the interest you pay on your mortgage.

I think you know this already, but you should consciously recognise that your psychological aversion to borrowing is irrational. If mortgages didn't exist most people could never afford a home. If borrowing didn't exist most businesses would never have been created and the entire economy would grind to a halt. Borrowing is perfectly fine so long as it is (1) planned, (2) used productively, and (3) and you are able to repay it.

*If it is all looking good, look into getting a solicitor to take care of the 'conveyancing'.

Its a bit more than that. You will need your solicitor to ensure that the sellers do actually own the property and that you are actually buying it.