Upsizing from a one bed flat to a house

ProDave

GDB2222 said:

Wow! Nearly £500 a year for a mobile phone that doesn’t work properly. A replacement battery seems to be under £50.

And £17 a month for a new phone is £200 a year. Why not buy a phone for £100 and get a £5 a month sim? Or get a new battery for the old phone?

I think I’m extremely mean about mobile phones because I had to have one for business use soon after they came out, and they were *incredibly* expensive then. I paid the equivalent of £1 a minute for calls, taking inflation into account. I have never got out of that mindset.

I use an old phone gifted by a relative on what was a £5 per month SIM only contract, now a little over £5 per month.

It's not unlimited but does give me enough minutes and texts to make all the calls I need.  So much so that I never make a call from the landline. Landline calls (or an inclusive calls contract on a landline) are now way over priced compared to a cheap mobile SIM contract that I now have.

getmore4less

Unlimited on Sim only is around £10 these days  cut data a bit and you can get close to £5
12/24m deals with cashback get the cost down.
example. there have been others(I don't look that often)
https://www.hotukdeals.com/deals/three-sim-only-8gb-unlimited-everything-ps18pm-for-12-months-ps10-per-month-after-cashback-3545018

start looking now
https://forums.moneysavingexpert.com/categories/mobiles
https://www.hotukdeals.com/tag/broadband-phone-service

Work from home you should not be using much data, should all be going through the internet connection.

£100-£150 gets a perfectly good sim free phone that will last for 3-5 years.or longer
some may be better on a contract that just gets renewed after initial run keeping the phone. 

if it a battery problem price up a replacements and look for options on sim only or try a deal with current provider.

which Sony phone is it?

savvygirl1986

getmore4less said:

Unlimited on Sim only is around £10 these days  cut data a bit and you can get close to £5
12/24m deals with cashback get the cost down.
example. there have been others(I don't look that often)
https://www.hotukdeals.com/deals/three-sim-only-8gb-unlimited-everything-ps18pm-for-12-months-ps10-per-month-after-cashback-3545018

start looking now
https://forums.moneysavingexpert.com/categories/mobiles
https://www.hotukdeals.com/tag/broadband-phone-service

Work from home you should not be using much data, should all be going through the internet connection.

£100-£150 gets a perfectly good sim free phone that will last for 3-5 years.or longer
some may be better on a contract that just gets renewed after initial run keeping the phone. 

if it a battery problem price up a replacements and look for options on sim only or try a deal with current provider.

which Sony phone is it?

Don't use the 16G I have, 2G-3G is probably plenty. Im trying to charge it now it appears to be an issue with the th cable or the connection port for the charger so not sure a new battery will fix the problem. I'm just trying another cable I have to see if it will work any better. I've been having a look at phones in Amazon to get an idea of what sim free options are out there. It's. I currently have a Sony experia XZ3. I'm with Vodafone they aren't the cheapest EE may be an option as I have my broadband with them and they give you 5G free data as a customer. I always look for cashback as well to see what's available. 

getmore4less

Plenty of contracts around £5/m for that use
here is a bigger Vodafone £6/m
https://www.hotukdeals.com/deals/vodafone-sim-only-12gb-data-with-unlimited-minutes-and-texts-12-month-plan-ps10-per-month-ps48-cashback-effective-ps6pm-at-fonehouse-3554580

You have a £400 phone should last more than 2 years, are you not using the wireless charging?

savvygirl1986

getmore4less said:

Plenty of contracts around £5/m for that use
here is a bigger Vodafone £6/m
https://www.hotukdeals.com/deals/vodafone-sim-only-12gb-data-with-unlimited-minutes-and-texts-12-month-plan-ps10-per-month-ps48-cashback-effective-ps6pm-at-fonehouse-3554580

You have a £400 phone should last more than 2 years, are you not using the wireless charging?

Great thank you.

It doesn't have wireless charging that I'm aware of. The other cable I have seems to be working better now. Hopefully that should fix it for now

getmore4less

Specs say wireless. 
Pretty top end phone what features did you want/need

https://www.sony.co.uk/electronics/smartphones/xperia-xz3/specifications

savvygirl1986

getmore4less said:

Specs say wireless. 
Pretty top end phone what features did you want/need

https://www.sony.co.uk/electronics/smartphones/xperia-xz3/specifications

I'm not great with tech. Will have to pull out the box and the manual! 

Just need decent resolution to watch videos and a decent camera. Not worried about standard storage as I have a sim card that I can use from this phone and put in a new one. 

GDB2222

We maybe can't fix your housing issues, but mobile phones we can deal with!

enthusiasticsaver

savvygirl1986 said:

I would appreciate some advice please.
 
2 years ago my fiancee and I purchased a 1 bed flat for £125,000. Our mortgage was £118,000. We have since made some improvements and the estate agent has valued it at around £130,000.

We have just remortgaged @ 2.26% for two years and we can port our mortgage. We will save £81 per month when our new deal kicks in and we will pay our £499.24 mortgage payment + £81 per month that we would save as a minimum but we are looking to pay extra on top (up to the 10% maximum per year) once our credit cards are all paid off in December. So we anticipate paying an additional £500 on top every month. Our outstanding mortgage is  now £113,000 so we have a small amount of equity. 

We have savings of £9,000 at the moment. I've got £5,000 of this in a savings account called 'maternity' to support us when we have a baby while I am on maternity but I am topping up this pot monthly. 

Within the next 12 months all being well we will start a family. Our flat is jus about livable with a baby for a short time as it is a good size but within the next 18 months we would like to up size to a 2-3 bed house. 

I've had a look today and depending on location in our area we would be paying anywhere from £220,000- £250,000 for a house. We are happy to purchase properties that need some work but not a complete overhaul. 

My partner's salary has increased from £16k per year to £18k per year and my salary has increased from £24k to £35k since we took out our first mortgage. 

I'm struggling to get my head around how upsizing works in terms of mortgage. 

1. Do we need a 10% deposit as if we were starting from scratch? 
2. What fees are there as a seller to consider?  Any ideas of the costs based on properties at the value we are selling at
3. What fees are there as a buyer to consider? Any ideas of costs based on properties at the value we are looking at? 
4. Do we need additional savings or is it worth trying to increase the equity as well? 
5. Anything else that we need to consider? 
I'm a realist so would appreciate any advice you can give. I want to know what our gap is between where we are now and where we want to be. So than we can focus our money into the right place for the next 18 months. 

Thank you in advance. 

I have not read the whole thread as it seems to have deviated on to mobile phones but the answers to your questions are.
1  Many lenders are now asking for 15% deposit but that can come from the equity in your existing property.  So if you were buying a property for £220k the maximum mortgage you could get is £187k.  The remaining £33k would have to come from the equity of your property (assume selling price £130k and existing mortgage of £113k so £17k equity) so you would need £16k savings. 
2 and 3  Biggest costs for buying and selling are estate agents fees (usually a percentage of the sale price of your flat) and stamp duty but the chancellor announced a stamp duty holiday until March 2021 initially but it may be extended.  He seems to want to keep the housing market propped up so good news  for anyone buying and selling.  The stamp duty is normally based on the value of the property you are buying but zero at the moment. Other costs are usually mortgage arrangement and valuation fees, solicitors costs, removal costs, search fees.
4  It does not matter where the increase in deposit comes from whether equity or savings.  As the mortgage rate is 2.26% and you won't get that in savings it might be worth overpaying the mortgage but there is probably a maximum you can overpay by.  Usually 10% so in your case around £11k per year. 
5  I would consider that the housing market is being propped up by government policy at the moment but that could change if the economy takes a dive and no amount of stamp duty holidays will keep house prices inflated.  However that will reflect on the cost of the property you are buying as well as your flat.  A one bed flat might be hard to sell as a lot of people may have found lockdown with no garden hard to cope with and with many people working from home having an extra room as a study makes it easier to sell. 

I would always say that it is easier to upscale before you have children as the mortgage multiples are based on two full time salaries with no childcare.  Once affordability checks are done once you have a child that may decrease what a bank will lend you.  The debt will also have an impact on any mortgage application so I would get shot of that even if it is at 0%.  You could always just save as much as possible so you were in a position to clear the debt before application. On a combined salary of £53k though a mortgage of £187k is only 3.5 times so you have some leeway.  The more expensive the house obviously the more you will have to save towards the deposit.  The very fact lenders are now asking for 15% indicates they think there will be a drop in house prices off the back of an economic recession so I would not be convinced that now is the time to buy even with the stamp duty holiday. As others have said you have time as even if you get pregnant next year you are looking at giving birth in 2022 and the baby can stay in your room for a while although I would have to say we and my daughter both had our children in their own rooms at 6 months. 

savvygirl1986

enthusiasticsaver said:

savvygirl1986 said:

I would appreciate some advice please.
 
2 years ago my fiancee and I purchased a 1 bed flat for £125,000. Our mortgage was £118,000. We have since made some improvements and the estate agent has valued it at around £130,000.

We have just remortgaged @ 2.26% for two years and we can port our mortgage. We will save £81 per month when our new deal kicks in and we will pay our £499.24 mortgage payment + £81 per month that we would save as a minimum but we are looking to pay extra on top (up to the 10% maximum per year) once our credit cards are all paid off in December. So we anticipate paying an additional £500 on top every month. Our outstanding mortgage is  now £113,000 so we have a small amount of equity. 

We have savings of £9,000 at the moment. I've got £5,000 of this in a savings account called 'maternity' to support us when we have a baby while I am on maternity but I am topping up this pot monthly. 

Within the next 12 months all being well we will start a family. Our flat is jus about livable with a baby for a short time as it is a good size but within the next 18 months we would like to up size to a 2-3 bed house. 

I've had a look today and depending on location in our area we would be paying anywhere from £220,000- £250,000 for a house. We are happy to purchase properties that need some work but not a complete overhaul. 

My partner's salary has increased from £16k per year to £18k per year and my salary has increased from £24k to £35k since we took out our first mortgage. 

I'm struggling to get my head around how upsizing works in terms of mortgage. 

1. Do we need a 10% deposit as if we were starting from scratch? 
2. What fees are there as a seller to consider?  Any ideas of the costs based on properties at the value we are selling at
3. What fees are there as a buyer to consider? Any ideas of costs based on properties at the value we are looking at? 
4. Do we need additional savings or is it worth trying to increase the equity as well? 
5. Anything else that we need to consider? 
I'm a realist so would appreciate any advice you can give. I want to know what our gap is between where we are now and where we want to be. So than we can focus our money into the right place for the next 18 months. 

Thank you in advance. 

I have not read the whole thread as it seems to have deviated on to mobile phones but the answers to your questions are.
1  Many lenders are now asking for 15% deposit but that can come from the equity in your existing property.  So if you were buying a property for £220k the maximum mortgage you could get is £187k.  The remaining £33k would have to come from the equity of your property (assume selling price £130k and existing mortgage of £113k so £17k equity) so you would need £16k savings. 
2 and 3  Biggest costs for buying and selling are estate agents fees (usually a percentage of the sale price of your flat) and stamp duty but the chancellor announced a stamp duty holiday until March 2021 initially but it may be extended.  He seems to want to keep the housing market propped up so good news  for anyone buying and selling.  The stamp duty is normally based on the value of the property you are buying but zero at the moment. Other costs are usually mortgage arrangement and valuation fees, solicitors costs, removal costs, search fees.
4  It does not matter where the increase in deposit comes from whether equity or savings.  As the mortgage rate is 2.26% and you won't get that in savings it might be worth overpaying the mortgage but there is probably a maximum you can overpay by.  Usually 10% so in your case around £11k per year. 
5  I would consider that the housing market is being propped up by government policy at the moment but that could change if the economy takes a dive and no amount of stamp duty holidays will keep house prices inflated.  However that will reflect on the cost of the property you are buying as well as your flat.  A one bed flat might be hard to sell as a lot of people may have found lockdown with no garden hard to cope with and with many people working from home having an extra room as a study makes it easier to sell. 

I would always say that it is easier to upscale before you have children as the mortgage multiples are based on two full time salaries with no childcare.  Once affordability checks are done once you have a child that may decrease what a bank will lend you.  The debt will also have an impact on any mortgage application so I would get shot of that even if it is at 0%.  You could always just save as much as possible so you were in a position to clear the debt before application. On a combined salary of £53k though a mortgage of £187k is only 3.5 times so you have some leeway.  The more expensive the house obviously the more you will have to save towards the deposit.  The very fact lenders are now asking for 15% indicates they think there will be a drop in house prices off the back of an economic recession so I would not be convinced that now is the time to buy even with the stamp duty holiday. As others have said you have time as even if you get pregnant next year you are looking at giving birth in 2022 and the baby can stay in your room for a while although I would have to say we and my daughter both had our children in their own rooms at 6 months. 

Yes it did digress a bit!

That was what I was struggling to get my head around a bit was whether is is just best to pay our mortgage down as much as possible and then have some in savings or whether it was best to just build up the savings. 

Yes it is hard to know exactly what will happen with the housing market. I get what you are saying about flats but we have quite a few things in our favour and we found that lock down didn't really affect us that much because of that. 

1. We have a decent size balcony that over looks the gardens
2. The flat is one bed but as it's 1930s we have very good size lounge/kitchen and bedroom.
3. The gardens are literally across the road so we got out every day for a walk and some fresh air so didn't feel trapped
4. The beach is literally a 5 minute walk away again meaning we didn't feel cooped up and could quite easily do our daily exercise along the beach
5. We are also on the doorstep of town so we're able to walk around town for a change of scenery

In terms of affordability we are in a very fortunate position where my and my fiancee jobs will work in sync. While he isn't on as high a salary the benefit is that he can plan his own hours in the week. I can work from home with flexible hours as I am doing now due to covid so between us we can both work full time to fit in with each other's schedules after the first year which I will take a break for maternity leave so we will be on full salary. Yes we will have extra costs for childcare but there are costs we won't have living in a house rather than a flat such as no maintenance and no residents parking to pay so it's swings and roundabouts.

Debt will be clear by December so I'm not concerned about that at all and we had more debt when we got our first mortgage, I've worked hard to clear that down and we have a fantastic mortgage broker.

The only thing I was wondering though is that you would think no debt at all would be good. But I've heard lenders don't like no debt at all? Is it worth spending on the credit card for fuel every month for example and clearing it off in full to have a little bit ticking over?