Advice for young mortgage owner! 27 June 2020 at 7:32PM in Mortgage-free wannabe 9 replies 211 views

ChrisA1993

I bought my house just before my 23rd Birthday. It was worth 70K and I put down 10K and have been paying it off over last couple of years. My roof has been leaking and so now need to have a new roof placed as well as possibly a new bathroom. I am worried that I am going to end up paying out more than my mortgage was worth and then make a loss if I need to sell soon. I am really good with money (saving) and was hoping to pay of in 12 years (by age 34) but this roof leak has made me really anxious and I am worried if more faults are found I will struggle with money.
Does anyone have any experience of this sort of situation and how you managed to cope and allocate money accordingly.

johnny_c-l

Chris, I don't have experience of this specific situation, but I can share how I'd approach it. What are your alternatives....if you sold as-is in 12 years and bought another property or moved into rented, how would that impact your finances? 

This is how I'm looking at it for myself - I'm about to buy my first property (new-build) and expect to lose about £20-30k on it when I sell it in three to five years based on what the market price is today, what I plan to spend on it, and where I guess the market will be in the future. This is a great deal for me as I am renting currently and would otherwise spend about £50k in rent over the same time period. As an option versus my alternatives it makes sense.

It sounds like the roof situation is important and you need to repair it or risk further damage to the property. My guess would be that X£ repair would be less than the loss from not repairing it and selling it as-is in 12 years. None of us have the luxury of perfect hindsight and being able to pay a different price if we knew what we know now! You could consider re-mortgaging to a longer term (or reducing overpayments if that's your plan) since you have more than ample time on your side. 

In terms of reducing anxiety over future costs (which will come......nobody knows when or for what!), set aside an amount monthly from now onwards to cover your unexpected expenses to build up a contingency.  

Do the numbers for yourself. You are clearly someone with their head screwed-on to have saved for and got a deposit to buy a house at 23. You'll know what your options are, just take the time to work out what is best for you.

ChrisA1993

Thanks johnny_c-l for your thoughts.

I have around £10,000 in savings and can save roughly £200-300 every month. I know some people will wonder why I worry but it is just who I am. At the moment I have water leaking through multiple places and know my roof needs replaced. My worry is that I ideally would add this to my mortgage but at the moment am furloughed and I'm struggling to get acceptance. This then means that I will have to use up savings which worries me as I then think what if I lose job etc. This home will not be my forever home as it is only one bedroom and obviously in 5-10 years there is a good chance I will be married/want children. Due to  this I want to pay off my mortgage as much as possible but feel every time I pay some of it off something else happens and I am back to square one with almost none of my mortgage paid off. I know I am a bit of a worrier so just wanted advice from anyone in a similar position or with opinion.

johnny_c-l

Hey Chris, what is the purpose of your savings (and therefore giving you concern)?

I'm guessing it is for 'emergencies' and I think it is reasonable to assume a roof problem fits the bill.
How much of a cash flow issue is this really going to create for you (how much are the repairs costing you)? If the roof repair work costs £5k then it is clearly manageable. If it's £20k then at least there is a good line of sight given your savings and monthly surplus, unless selling now is better for your circumstances.

pramsay13

A mortgage is designed to be paid off over 25 years which would be when you are 48. 
Obviously if you can pay it off over fewer years that is better, but not at the expense of fairly major renovation or maintenance work needed on the property.
That is one of the 'joys' of ownership, the alternative would be renting which would probably cost less short term but long term you wouldn't have the asset of a house.
When you bought the house the poor condition of the roof would have been a factor in valuing the house, so a new roof will definitely improve the value.
If you do make a loss when you sell it, as long as you don't lose more than you would have paid in rent for a similar property in the same time period you are still ahead and it was a good decision to buy.

South_coast

Hi Chris, have you got a couple of quotes for the work? Knowing exactly what you're dealing with might lessen the worry aspect

ChrisA1993

South_coast said:

Hi Chris, have you got a couple of quotes for the work? Knowing exactly what you're dealing with might lessen the worry aspect

So I have a few guys coming round over next few days to provide quotes. They are all on the trusted trader scheme so hopefully should be reliable. My worry is that I have had a lot of problems from tradesman in the past (one who was also on trusted trader) and therefore constantly keep thinking that I am going to pay for a new roof and then 1 month later it will start leaking again and the tradesman will be nowhere to be found. Obviously I would get signed documents and agreements and as I say everyone is through trusted trader scheme so I know I shouldn't worry but I think once you have had a bad experience it kind of sticks with you.
After research I assume I am looking around £5000-£6000 for new roof but as I say will know more over next couple of days.

Sistergold

Hello @ChrisA1993
It is a pain that a few years after buying your first house you have to do something major like replacing a roof. Unfortunately it’s one of those things that come with home ownership. I am also single and do see why you could worry a bit more about something that is expected to happen in house ownership and that is maintenance. 
It is good that you have savings and so you are doing well in that respect. Tradesman are very tricky and I have seen some programs of roofs having been done, after being done badly you have more water into the house than before! I would recommend really seeing if you can find someone recommended by a trusted person. Have you asked around colleagues at work if they can recommend someone? Please don’t go into it by using someone from the internet lists. I know water into the property is not good but do a bit more digging and find someone with good known references! 

Take comfort in knowing that renting is also money you don’t recover and that should compensate for any fears or possibilities of money lost through negative equity or renovations where money is not recovered. 

Good luck. 

ChrisA1993

Sistergold said:

Hello @ChrisA1993
It is a pain that a few years after buying your first house you have to do something major like replacing a roof. Unfortunately it’s one of those things that come with home ownership. I am also single and do see why you could worry a bit more about something that is expected to happen in house ownership and that is maintenance. 
It is good that you have savings and so you are doing well in that respect. Tradesman are very tricky and I have seen some programs of roofs having been done, after being done badly you have more water into the house than before! I would recommend really seeing if you can find someone recommended by a trusted person. Have you asked around colleagues at work if they can recommend someone? Please don’t go into it by using someone from the internet lists. I know water into the property is not good but do a bit more digging and find someone with good known references! 

Take comfort in knowing that renting is also money you don’t recover and that should compensate for any fears or possibilities of money lost through negative equity or renovations where money is not recovered. 

Good luck. 

Thanks for your advice.
Everyone who I am getting out have multiple  good reviews, however again this is through online searches. Nobody I know has had their roof done in recent years so cannot ask for any recommendations. I just have a nagging fear that the house is going to have another problem and then I will be in a really difficult position.

griffinsaver26

I’ve started asking on local Facebook groups for recommendations for tradesmen. You’ve got to be a bit careful and use your judgement, but usually the same names come up, they’re local and have done work in the area. 

I’m a bit similar to you in that I have savings and don’t like to use them! But actually this is an investment, you will put value on the house and be living in a warm and safe environment. In 12 months your savings will be back up and you won’t have unnecessarily remortgaged.