Help with moving from renting to owning

Didymus

Hi all,

We’re in the process of buying our first home :j We’re currently renting and have a notice period of one month.
Our rent is paid on the 24th of each month and we’re trying to plan so that we don’t end up paying rent and mortgage at the same time. Can anyone confirm whether my thoughts below are correct please? -

Thought 1 - If we give notice in writing before the 23rd of whatever month we end up exchanging contracts, our final rent payment will be on the 24th on that month and we will then have to hand the keys back by the 23rd of the following month. I assume we pay rent in advance so will not pay anything after the final payment a month before we leave.

Thought 2 - Our mortgage payment date will be the 1st of each month and the company states they take the first payment on the 1st of the month after you move in. If we exchange and give notice on/by the 23rd, then complete after the 1st of the following month, we will then pay mortgage on the 1st of the month after that.

If my thinking is correct, then we should be fine, but wanted to confirm!

(EDIT - We have more than enough money saved up and I’m not asking this question because I want judgement or concern over us being financially stretched. I’m trying to be sensible and limit paying rent for an empty house on top of a large first mortgage payment so that we can use our savings for things we want to do to the house and to keep money back in case of emergencies. This is simply a question to confirm whether, in the example I have given, my assumptions are correct.)

Thanks in advance.

theartfullodger

Doesn't matter when rent is paid, but what tenancy period is.


a) Has fixed term ended??
b) If so, what was start & any stated end date of tenancy & what is the frequency of rent payment (eg monthly..)
c) Usually tenant's notice is AT LEAST one month expiring on last day of tenancy period; So if tenancy runs 10th to 9th on month and you give notice today it can't expire before 9th March.
d) But you and landlord (or agent..) are at liberty to agree an early surrender any time that you agree: e.g. 21:37 tonight if you like.

sal_III

It really depends on what your AST terms are for terminating the tenancy.

Your mortgage Lender most likely requires payment in advance, meaning that on the 1st of the month after you move in you will have to pay 1 month + pro rata for the part of the month you moved in. Meaning that your first payment will be abnormally large.

Seems to me that you are financially stretched and stressed about not being able to afford both rent and mortgage for a month. Although it's a good idea to try and minimise overlaps, you should really not bet your financial future on that.

Didymus

theartfullodger wrote: »

Doesn't matter when rent is paid, but what tenancy period is.


a) Has fixed term ended??
b) If so, what was start & any stated end date of tenancy & what is the frequency of rent payment (eg monthly..)
c) Usually tenant's notice is AT LEAST one month expiring on last day of tenancy period; So if tenancy runs 10th to 9th on month and you give notice today it can't expire before 9th March.
d) But you and landlord (or agent..) are at liberty to agree an early surrender any time that you agree: e.g. 21:37 tonight if you like.

A - we are over a year in to the tenancy and have a break clause so that we only need to give one months notice.
B - The start date was 24th November 2017 and we pay in advance on the 24th of each month.
C/D - As in my original post, we would give notice by the 23rd of this month, for example, and would then be due to move out by the 23rd of the following month.

I assume my thoughts were correct?

Didymus

sal_III wrote: »

It really depends on what your AST terms are for terminating the tenancy.

Your mortgage Lender most likely requires payment in advance, meaning that on the 1st of the month after you move in you will have to pay 1 month + pro rata for the part of the month you moved in. Meaning that your first payment will be abnormally large.

Seems to me that you are financially stretched and stressed about not being able to afford both rent and mortgage for a month. Although it's a good idea to try and minimise overlaps, you should really not bet your financial future on that.

We’re already aware that our first months mortgage payment will be large and have put two mortgage payments to one side to compensate for this. We were told by our advisor before we submitted our mortgage application that this would be the case.

I’m not betting anything on anything as I know that things can change and we’re not financially stretched, rather trying not to throw money in to an empty rental property and pay out £1150 a month in rent plus the equivilant of two mortgage payments.

I was simply asking whether my assumptions were correct, in that if we can exchange contracts before the 23rd and then complete after the 1st of the following month, we would not overlap payments.

george4064

I would be very careful with trying to time things too 'perfectly', I know a few people who put their notice in to their landlord before exchanging and ended up living in a hotel & their stuff in storage for several weeks.

Its best to give notice to your landlord once you've exchanged, since that's the first time things become legally binding.

I recently exchanged on my first flat and I have notice to my landlord as soon as I could after, in my circumstance I've got about a 5 day overlap with my new flat and my currently rented place.

Good luck

Didymus

george4064 wrote: »

I would be very careful with trying to time things too 'perfectly', I know a few people who put their notice in to their landlord before exchanging and ended up living in a hotel & their stuff in storage for several weeks.

Its best to give notice to your landlord once you've exchanged, since that's the first time things become legally binding.

I recently exchanged on my first flat and I have notice to my landlord as soon as I could after, in my circumstance I've got about a 5 day overlap with my new flat and my currently rented place.

Good luck

Thanks for the word of warning. We’re not planning on giving notice until exchange has happened, just trying to limit overlap of payments if at all possible as that seems sensible. It shouldn’t be an issue hopefully as there’s no chain and the property we are buying will be empty from the 26th of this month.

Did you end up paying for mortgage and rent out of the same pay check?

Cakeguts

Emywoo84 wrote: »

Thanks for the word of warning. We’re not planning on giving notice until exchange has happened, just trying to limit overlap of payments if at all possible as that seems sensible. It shouldn’t be an issue hopefully as there’s no chain and the property we are buying will be empty from the 26th of this month.

Did you end up paying for mortgage and rent out of the same pay check?

You end up paying for anything that needs paying out of the savings that you have made for any repairs needed to the property that you are buying. You do not spend every last penny on buying a house and think that you don't have to save ever again. Owning a house can easily be more expensive than renting because you become responsible for all of the maintenance of the house as well as the mortgage.



Saving for the deposit is the practice for the saving that you need to continue to do that will pay the mortgage if you lose your job or become ill or if something breaks.

Didymus

Cakeguts wrote: »

You end up paying for anything that needs paying out of the savings that you have made for any repairs needed to the property that you are buying. You do not spend every last penny on buying a house and think that you don't have to save ever again. Owning a house can easily be more expensive than renting because you become responsible for all of the maintenance of the house as well as the mortgage.



Saving for the deposit is the practice for the saving that you need to continue to do that will pay the mortgage if you lose your job or become ill or if something breaks.

I’m well aware of all of that thanks...
I’ve asked a simple question, so that I can confirm the assumptions I’m making are correct before planning on spending the money we have on improvements, which is sensible in my book.

So far I seem to be receiving misplaced judgement when you have no idea of my situation. I have a great job, I earn good money, have just received an inheritance so don’t need to worry about anything extra that needs to be paid out, we’re buying a small place far below our affordability, we will be substantially better off once we move, and I have already planned for contingencies. Not that I should have to justify myself!

DottieDam

I also spent awhile doing the rent/mortgage date loop-de-loop trying to minimise financial outlay and avoid extra rent (especially for an empty house - and this is MSE afterall!). I get that trying to save money doesn't mean you don't have savings, you just don't want to spend unnecessarily!

I'd aim to exchange contracts on 22nd so that you have the entire day on 23rd to hand in notice (my agent was happy to accept termination via email, maybe check with them in advance what they require?).

Then your last rent payment will be 24th, it probably depends on the lender but our first mortgage payment wasn't actually huge, we got keys just before Christmas and paid 3th Jan and it was an extra 1/4 of the normal payment (still below our rent payments).

My advice, having just moved, would be trying to maximise overlap between one months notice and moving in. Our new house was filthy and took longer than planned to clean, plus having a few weeks gave us a chance to visit the house without having to immediately move (which we needed as we proper freaked out at owning!).

Didymus

Thanks @DottieDam! The house we’re buying is currently being rented out. The tenant is due to leave later this month and then we’re going to go and see what it really looks like without their furniture in it etc, but definitely thinking we’ll need time to clean and decorate before moving in like you say.

Congrats on your new home and thanks for answering the question and understanding where I’m coming from!