Unsure what to do!

samps1973

I've been looking on right move to see what's about. Theres a few I wouldn't mind living in in my local area. I widened the search area to a 40 mile radius to see what's out there and to compare. If I moved to Swindon I'd get a LOT more for my money. A flat in Reading would fit inside a kitchen in most of the Swindon flats. However I guess bigger house, bigger bill's especially council tax.
I don't really need a massive place. And the travelling would be a nightmare 2hrs to pick my daughter and get back to mine on a Friday and again dropping her off on a Sunday but it's something I may consider when my daughters a bit older and can hop on a train. I guess the price per brick ( I just made that up, not bad hey ) costs more the closer you get to London. Like I said in another post everything I'm looking at is a step up to what I have so happy days.
I quite like looking for properties, calms the mind. Gonna look at what's about, do some thinking and not rush into anything.
When I started this Journey a couple of weeks ago I thought I could barely afford a 25% share in a property but now with the knowledge I've gained here thanks to you guys, I know that I can own my property 100% and In a fraction of time if managed carefully.

Cheers 👍

Anyanka1

If I may, you sound a lot more positive now.  You can do this and I hope you will keep us updated.

mark55man

I always found that there was something special about time with the kids in the car being very good for sharing news / opinions - and if you let her choose the music get an insight into what's rocking her world.  Maybe, plus the opportunity to get a treat at Reading services or Chievely!!.  Can get expensive but a coffee or Maccie-D's could be a bit of a ritual

samps1973

Thought I'd do a quick update incase any one else is going through the same thing.

I got an AIP with Natwest and they offered me £140k and I have a 10k deposit. I was looking around for a property and booked in a couple of viewings. One of the estate agents asked if I'd like to speak to an independant mortgage adviser/broker.

The chap I'm speaking with is independant and not tied to the estate agent. We looked through the different options and the best option is an help to buy equity loan.

I gave the advisor 13 pay slips, they use the exact amount of overtime on the slips and take into account the pension and the interest that I'll pay (about £50 per month) in 5 years time when the interest starts on the equity loan.

I found out I can get a motgage upto 75 years old with Santander so that's a 27 year mortgage available to me.

It works out that I can get £201,500.
£10,000 deposit and £40,000 from the equity loan, so the mortgage is £151,500. 

Because the total deposit is is 50k I'll get the best interest rate. I think it's about 1.5% roughly.

The payments on the mortgage with natwest would have been £813 pm on a fixed rate for 5 years at 3.89%. With the htb its £615 pm with Santander.

Although with the Natwest one  I would have been able to pay some extra a month, with the Santander one I can pay a lot more extra every month.

Also if I lost my job £615 would be more manageable on a lower paid job until I get my salary back up.

With the htb as most of you will know it has to be a new build. I'm hopefully viewing one a few miles out of Reading next week.

The adviser said there are many ways of dealing with the equity loan in the future and is going to advise me on this. The way I see it its interest free for 5 years so I can pay as much as possible off the mortgage in the meantime.

So for now that's the way forward for me at the moment.

At the beginning of this thread I wasnt sure if I could get a 25% share on a property due to my age but now I've learned I can get a brand new property and a 27 year mortgage. My aim will be to pay the mortgage by 60-62 years old then tackle the equity loan. I may also start saving a little as soon as I find a property to make a lump sum payment off the equity loan.

Reading about the equity loan online seems daunting but with professional advice it's much clearer. 

The only problem at the mo is theres only a few new builds with my budget around but theres loads of new sites being built and I have until March 23 to get one so no mad rush.

It may end up I'll go down the buying an older, cheaper property but going to see how the htb route goes first.

I'll update soon 👍

Thanks

Runningmad

Nice to see an update as I commented right at the beginning and suggested looking at HTB. This is our only option to buy a property. We have our eye on a plot just waiting until September for the price to be released and fingers crossed it won't have gone up over our budget.
All the best and keep us updated on your journey. 

samps1973

I think for me, the thing I dont like about the h2b is theres no clear road ahead like, this is when you start paying and this is when you finish. 

With a normal mortgage you can put the figures in a online calculator and find out more or less when your mortgage will be paid.

With the h2b I already feel that the debt will be looming over me for years to come and it's not really something to look forward to at the end of the mortgage term.

As an example I buy a property for 200k...150k mortgage 10k deposit and 40k equity loan. In say 15 years time the property is worth 300k...I'm just coming to the end of my mortgage term on the 150k at this point I will owe 60k to the government plus interest or, I sell the property give the government their 60k so I'll be left with 240k to buy another place  Bearing in mind that I cant downsize as I'm already in a 1 bed flat and the property prices for a 1 bed is 300k as that's what I sold mine for. 

I just cant see the Logic behind it. It says help to buy, but how does it help?

The way I see it, once your in that property, unless your going to get some inheritance or something like that you'll be stuck with that property. It's not like you can downsize to a mobile home, they are just as expensive these days as a one bed flat.

With the other choice I have, I can get roughly 170k inc a 10k deposit mortgage for an older property. Although the interest is higher at least theres a light at the end of the tunnel, if I ever get there. It'll be a lot of interest as I wont have as much extra to pay off each month to get the capital down.

Once again I am completely confusled.

I've sent an e-mail to the mortgage advisor, so I'll wait and see what he says too, although I'm guessing they want you to get the biggest amount so they make more money in commission from the creditor.

Ill post these comments on both of my threads as they are related.

As my thread is titled. 'Unsure what to do'. 😁

Thanks

samps1973

Details

Before you apply

Make sure you:

• send us a Royal Institute of Chartered Surveyors’ valuation report for your property, so we can work out how much you need to repay
• have repaid any outstanding payments or arrears
• tell us your solicitor’s contact details and give them authority to act on your behalf

I read this on the government website after googling the best way to pay help to buy.  I bet that's not cheap!!

I know all this Is negative but I'm trying to find the best way before i go and see the new build on Friday.

london21

samps1973 said:

Hi,
I'm nearly 48 years old and am in the early stages of looking into shared ownership. 
I earn £35,000 pa and have £15,000 in savings.
The reason for wanting to buy a share in a property is for a bit of security for when I get older and also as to leave something for my daughter when I die. 
All I've done so far is filled the form out on the help to buy site for my area and they replied saying i qualify for shared ownership.
The next step i think is to contact a financial adviser or mortgage broker?...Theres so much info online it's hard to know where to start. 
The biggest worry for me is knowing what would happen when I get older. If say I have bought a 25% share on a 2 bed flat and am just about to enter retirement, how would the rent get paid? As I will have worked all my life will the housing benefit pay for the rent on the 75% that the housing association own. Also is there a go to place online i can use that show the steps i need to take.
I currently pay £650pm all Bill's included on a 1 bed Studio flat and want a 2 bedroom place so my daughter can stay at weekends in her own room as she's getting older. 

Thanks
John

Read all the small prints. What i dislike about some shared ownership flats is you pay 100% of the bills. so service charge,ground rent,  section 20 works etc. 

getmore4less

The key with H2B is being able to afford more than the base mortgage costs at the start.
(either at the start or later with pay rises or lump sums)

You use the 5y interest free on 20% and the reduced rate on 75% to build a reserve of equity over the equivalent higher LTV mortgage rate.

With your numbers on £200k  over 27years.
5% £10k deposit
20% £40k H2B 
75% £150k mortgage.(looking at Santander is looks to be 1.73% for 5year  75% H2B, the 2years is 1.51%)

after 5 years 

amount	rate	payment	owing
£150,000.00	1.73%	£579.80	£127,232.75

if value does not move LTV 63.5% add back the H2B £167k* and its 83.5%

85% LTV mortgage is going to cost more say ~2.7% and only 22y left. that's £840pm


The trick is to overpay lets go with £800pm and after 5years

amount	rate	payment	owing
£150,000.00	1.73%	£800.00	£113,443.03

Add back the H2B, £153k* 76.5% LTV and getting very close to the 75% again where the 5y rates are better ~1.5%

lest try with the place has gone up to say £250k in the 5 years, new mortgage is them £163k*, 65.2 LTV% better but that may hit your borrowing limits.



*  Your £35k income puts a cap on buying out the H2B at around(4.5x) £155k you need to overpay and hope the values does not go up too much


How much do you think you could throw at the mortgage? 

samps1973

Hi @getmore4less

Thanks for taking the time to write that post. I had to read it slowly and a few times as theres some great information there.

I'm going to aim to pay £1000 per month on the mortgage. The property I'm hoping to buy has a guide price of £192k if I like that's what I'll offer as it's a fair price in that area. I have an AIP of 200k including the deposit and equity loan.

Is what your saying that with my salary I may struggle with the htb in the future and hit a wall at some point?

I think the only choice I have is htb or a standard mortgage with santander to 75 years old for 161k including my 10k deposit. The payments are much higher obviously because of the higher interest and I'd have less to overpay each month but theres no loan to pay back.

What do you think is the best thing to do in my situation?

Something else is also a lot of the older properties I've been looking at are run down and need work whereas a new build saves me money in the first years of my mortgage as nothing needs to be repaired. Well, hopefully anyway 😁

Thanks again