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Asking price offer is not accepted!!
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Yes you are absolutely right, but I see that as an investment, if I keep living in rented house for another 3 years and keep paying the same rent, at the end I have nothing but another year of renting.. on other hand if I have my own house at least there are reasonable chances that I will build some equity on it after few years no matter I have paid little more than what I would be paying as rent and if its IO mortgage.0
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ahsanjalil wrote: »Yes you are absolutely right, but I see that as an investment, if I keep living in rented house for another 3 years and keep paying the same rent, at the end I have nothing but another year of renting.. on other hand if I have my own house at least there are reasonable chances that I will build some equity on it after few years no matter I have paid little more than what I would be paying as rent and if its IO mortgage.
If prices are stagnating or falling (as is expected by most at this point), then you will generally build equity faster by renting and saving for a deposit. The deposit is your "equity".
For example if I were to buy a 3 bed semi in my area, it would be 180k. An IO mortgage at 5.79% would cost £870 a month. I can rent an equivalent property for £600 a month. At the end of 2 years, if I save the 270 a month that would otherwise go to the IO mortgage, and prices are stagnant throughout that time, £6480 (+ interest) better off. Whereas the IO mortgage has bought me nothing.
This calculation does not even take into account buying and maintenance costs. At this point the frenzy to buy is over; there is no rush.0 -
ahsanjalil wrote: »I am renting studio flat and paying £550 rent, as my landlord is selling this flat his asking price is £96K. I went for 1 bed flat with own garden £122K, mortgage broker worked out my monthly interest only mortgage shall not exceed £515 in any case. And even if I buy the flat I am renting on asking price my mortgage would be way below £500. Unless I am missing something here.
I wouldn't just take an agents word for it, if you can understand the figures then try and figure it out for yourself.
He may be calculating this on a fixed or discounted rate where after the intial honey moon period you could end up paying much much more...
Also in addition you need to factor in other costs insurance, ground rent, service charge, maintence etc etc...
This is where some people go wrong (I'm not saying you) you can't ask an adviser or broker to advice you as they have a vetted intreast you have to either work out how to do it yourselfs or get a friend or family member to have a look at it for you...
It like asking a car sales man weather he thinks the car is mechnically sound.0 -
Another thought is that if you buy a 1 BR flat, you want to be sure that when you are ready to move up and out (start a family, get married, etc.) the market will be amenable to your plans. If you buy a 1 BR flat, and in a couple of years your situation changes and you absolutely require more space, you are stuck. Surely most people stay in a 1 BR flat for only 3 to 5 years so why buy. JMHO0
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