Buying a house without a mortgage

Frugaldom

Hi Pavlov's, I was reading up about the grants available and they offer up to 30% (or up to £1,500) towards the installation costs of the wood burner stove systems. The link HERE lists all the grants available and it includes installation of solar panels.

Property prices where I am appear to be crashing and it's quite severe.
Example 1 - (substantial 3/4 bedroom property with commercial premises attached) went on market at o/o £225,000 last year, dropped to o/o £205,000 - this week's advert = FIXED PRICE £168,000 :eek:

Likewise, the 5 bedroom, three storey 'fixy up' hasn't sold yet, even with a pricetag of £105,000. However, despite plenty of very comparitively cheap large properties, there are very few small houses available.

Congratulations on your impending 'target-meeting' for your decorating budget! :T I find it so much easier to save when I have set myself stages and, despite upping my target to cover the wood burner etc, have managed to make it to stage 3, which is purely for the actual house.

Have fun

pavlovs_dog

nykmedia wrote: »

Property prices where I am appear to be crashing and it's quite severe.
Example 1 - (substantial 3/4 bedroom property with commercial premises attached) went on market at o/o £225,000 last year, dropped to o/o £205,000 - this week's advert = FIXED PRICE £168,000 :eek:

Likewise, the 5 bedroom, three storey 'fixy up' hasn't sold yet, even with a pricetag of £105,000. However, despite plenty of very comparitively cheap large properties, there are very few small houses available.

there has been a noticable slow in our local market as well, but its mostly on the boxy yuppie flats that they insist on flooding our area with :rolleyes: have been playing around with mortgage calculations and have discovered that
(1) based on our projected financial situation in circa 18 months (and current interest rates) we would be able to borrow up to 40k more than we thought.

(2) unfortunately that 40k doesnt seem to make a huge amount to the size/location/quality of property we would be able to afford under current market conditions. which makes a fixy-uppy seem all the more appealing. OH even bought himself a DIY book this week (huge great big dorling kindersley book, RRP £30odd for £6 in wh smiths. its actually quite good for an introduction/overview to diy and moderate home improvements if you want to swot up whilst you save ).

(3) mortgage calculator also showed how much the mortgage would cost over the life of the product at that interest rate :eek: :eek: :eek: i dont think we'd be in a financial position to save outright to buy a house, but seeing those figures was humble reading, and i think once we'd got the initial, most necessary fixing up and the wedding out the way, we would become mortgage free wannabe frugalites post haste, to bring the interest costs right down.

nykmedia wrote: »

Congratulations on your impending 'target-meeting' for your decorating budget! :T I find it so much easier to save when I have set myself stages and, despite upping my target to cover the wood burner etc, have managed to make it to stage 3, which is purely for the actual house.

Have fun

thank you. i have money pots for every conceivable expense on my spreadsheet, much to OH's amusement nice to know that these expenses are accounted for, and when we come to buy we will know exactly what we can/cant aford.


its also nice to know that the house deposit fund is actually much nearer the target than my sig implies, as i have this years £3600 isa allowance in a savings account reading to go, giving a total of roughly £15.5k, plus interest from the 07/08 allowance which should easily hit £400, so the true house deposit figure is more like £16k, so we're definately on target.


you added many more notes into your brick?

Frugaldom

Well done on the house saving!

My brick now has notes for all of the following:
Survey fees
Land registry
Local authority search fees
Other search fees
Conveyancing
Travelling allowance for house viewing
Removal fees
Immediate/essential repairs
Eco-friendly heating system
1% of capital

I'm now concentrating on the notes that say 1% and will add them in each time the balance increases by £500, although I am not 100% confident that 50k will get a fixy-up by the time I have saved it!

Like you, I have different accounts and savings methods for individual goals, but I don't include them all here. Nor do I count in things like shares (unless I sell some) or Premium Bonds (I know, I know ) However, I added my 'quit smoking' total as that warranted a section all for itself. It's for, umm, err... my garden & livestock fund :rotfl: If there isn't space for half a dozen hens, a veggie plot and some fruit trees & bushes then it won't be on my list of potential fixy-ups to view

PS: I wasn't a heavy smoker, it worked out at £1.28 per day... someone said it was 'chicken feed' compared to other smokers, and that gave me the idea of starting the garden & livestock fund. I opened a new account for it and pay it in every week now.

pavlovs_dog

have you allowed yourself an 'emergency fund' as well? (the equivilent of 3-6 months of your income), so should you loose your job/ be unable to work etc, you can still meet the bills and your financial commitments. obviously without a mortgage to pay, your fund would be smaller than most peoples. ours will need to be a good few £k based on our combined income over 6 months. it is more money to find, but i wouldnt want to commit to a purchase without that security blanket, just in case.

if you want hens, you will need to check the papers that come with the house very carefully - some deeds have clauses which prevent such things. you also need to check for local council by-laws which might prevent the keeping of poultry as pets. there are some great threads on the old style boards with more info.

as for your premium bonds... :silenced:

Frugaldom

Hi Pavlovs,

Thank you for your wise words and concern. However, :cool: I'm a bit of a smarty pants here - having worked in livestock, poultry and game related industries for many years, I'm quite well up on various legislations and the implications of keeping livestock and my fixy up will, hopefully, be fairly rural. With regards to the income protection - I'm fulltime self-employed and also part time employed - hence the reason I wouldn't like to take on a mortgage. Based on my current lifestyle and cost of living, plus the fact that there would be no rent or mortgage to pay, there's a 12 month safety net already in place. I didn't start this particular challenge until making sure that was covered and I don't want to include it in my totals, as that money will not impact on the cost of the house, nor will it be touched except in dire emergencies. Pennypinching savaholic, mean Scot or just simply frugal to a fault, I'm not sure, but whichever it is, I've already dealt with the boom & bust of the 80's, the 14% (and higher) mortgage rates, the abolition of the rates system and the losing of a house - I ain't going back down that road! No sirrrr... eee!:rotfl:

And I still can't bring myself to cash in the Premium Bonds. I keep saying, leave them one more month and then get rid of them. Then £50 arrives to dissuade me :rolleyes: I KNOW it could be an extra £60 guaranteed each year in a H.I account but.... I dunno, it's my personal stumbling block. Still working on it, though.

pavlovs_dog

nykmedia in you i think i've found a money soulmate. someone who takes equal delight in being anal and covering all eventualities as me :rotfl: well, except for those premium bonds i'll keep my fingers and toes crossed for another win for you

born_again_saver

I've been following this thread with interest, what a great goal Nykmedia, respect to you for going for it. I love the "skip the mortgage" idea - fine, rent may be dead money, but so is excessive mortgage interest, which with giant mortgages these days is not to be sniffed at.

I'd like to buy a shared ownership house without the shared bit, i.e. save up at least a 50% deposit and then have a smaller mortgage on the rest which would be overpaid by large amounts. Buying outright would take me waaay too long but we'll see.

Frugaldom

born_again_saver wrote: »

Buying outright would take me waaay too long but we'll see.

Hi there, thanks for 'popping in' for a quick chat.
I know my 'skip the mortgage' idea sounds crazy to loads of people and I seriously haven't a clue just how long it will take. I don't really care how long it takes, so long as I believe it can happen one day. :rotfl: (Ask Pavlov - my new financial soul mate - about the Premium Bonds ... that's the little extra bit of 'hope' rather than spending on the Lottery.) I'm racing ahead in this challenge, especially in light of the fact I completed a survey online and received a £5 cheque in the post this morning. Woo hooo! :j :rotfl: Every little helps and that would buy 2 bags of hardwood logs about these parts, or a bag of chicken feed, if there's space for the hens. Sadly, I have just received warning today (20th Feb) that Cahoot will be lowering it's interest rates on the err.... 18th Feb!!! And I just noticed that the ICICI account guaranteed 6.41% deal ends October 2008! :mad: Roll on April, let me at my ISA!

I need to believe this is all possible, we can't all pay someone else's mortgages forever.

Kaz2904

I have to say that if I was single then I too would probably rent and live in shared accomodation until I had enough money to buy outright.
The other option is to buy somewhere (like your 5 bed fixer upper), do it up as quickly as possible and then rent out all the other rooms to recoup your money. Trouble is that that would take a huge amount of capital in order to do this with no mortgage.
The ocd plods on but I'm getting closer to the day when I will be free!

Frugaldom

Hi Kaz!

My OCD is minimised by my not reading signatures, but it peaks when transferring funds to the savings accounts. Because they are all weird figures, I decided it was best to try and aim for a nice round total. This works fine so long as I don't look at incividual balances. Sad thing is, I'm almost wishing that my smoking habit had made it to £1.50 per day to avoid the trauma of that messy little figure. :rotfl:

Edited in: OOPS! I looked at yours! Well done on the windows!! :beer:
Pity about that £1.15 but with interest free you can't risk paying over the odds in one go!