Mortgage doesn’t seem worthy

Adezoo

Hi guys, I just wanted to rant a little about how mortgages are so complicated. I mean there’s a lot of thinking that has to be done and so much research that it’s not even really worth it! It seems like it would be much easier saving money to avoid getting frustated. I’ve been saving for few years now and I have about £20,000. At the moment I am working a zero hour contracted job although I am soon starting a new job which will pay around £30k + another income of £8k/year. Still I don’t see how that will work with the current house market around my area. I don’t really want to get a flat at the moment just because there’s not much around and some require cash straightaway! I feel like maybe it’s best to keep saving a higher deposit although that will mean I will need to rent for a bit. 

how was your mortgage experience? Have anyone done buy to let? 

HotDog2020

If you can do it, rent a room rather then rent an entire flat as it is cheaper and you can save more unless you have too many furnishings, although a quick calculation and storage could still make it cheaper. Buy to let would also be good as paying a repayment mortgage would be paying off the eventual debt, or what you could do is buy if you can and get somewhere with an extra room and let that out if you feel like sharing, all the money you get will pay off the mortgage that much faster. I thought I could do this when I bought a property turns out I cannot live with a stranger happily and share my relatively small flat. If you need ultimate privacy buying should in theory be better then renting, it should be cheaper to pay the mortgage then rent plus bills. I wouldn't buy leasehold unless I had to, but there is legislation potentially coming in to increase lease length with little charge wait and see. I am leasehold as it is cost effective for the price of the flat also service charge means I do not have to worry about property maint. By choice I would go freehold, but I am digressing. Best of luck in your choices and well done for saving 20k, no easy feat.

Adezoo

HotDog2020 said:

If you can do it, rent a room rather then rent an entire flat as it is cheaper and you can save more unless you have too many furnishings, although a quick calculation and storage could still make it cheaper. Buy to let would also be good as paying a repayment mortgage would be paying off the eventual debt, or what you could do is buy if you can and get somewhere with an extra room and let that out if you feel like sharing, all the money you get will pay off the mortgage that much faster. I thought I could do this when I bought a property turns out I cannot live with a stranger happily and share my relatively small flat. If you need ultimate privacy buying should in theory be better then renting, it should be cheaper to pay the mortgage then rent plus bills. I wouldn't buy leasehold unless I had to, but there is legislation potentially coming in to increase lease length with little charge wait and see. I am leasehold as it is cost effective for the price of the flat also service charge means I do not have to worry about property maint. By choice I would go freehold, but I am digressing. Best of luck in your choices and well done for saving 20k, no easy feat.

Thank you so much for your reply, really cheered me up. Yeah I was thinking of renting a room in a shared house for few months which would only cost me around £250 (or so). This would enable me to save even more. That’s actually a good idea, as a buy to let mortgage would require a higher deposit 😪 Thanks for sharing your experience and I will be looking into it🙏

powerspowers

Hi Adezoo, I get your dilemma- it’s hard when prices are so high in some areas to buy what you want and buying a flat is difficult because of the issue with building cladding. 

I don’t think buy to let us going to be any less complicated though- as you will have all the legal and tax implications of being a landlord. For instance, if you act incorrectly as a landlord you can be liable to pay back 3x the deposit to the tenant. Loads of landlords are selling up at the moment as they want out of the game. I’m also unsure if you can get a btl mortgage on a first property?

Have you spoken to a mortgage adviser to see what your budget/repayments could be? Mortgage is usually cheaper than rent (which is ridiculous). Good plan about renting a room if you do need to top your deposit up. My experience is that the first year of home ownership is really expensive and often people haven’t budgeted for it as have put everything in to the deposit. 

Good luck 

Adezoo

powerspowers said:

Hi Adezoo, I get your dilemma- it’s hard when prices are so high in some areas to buy what you want and buying a flat is difficult because of the issue with building cladding. 

I don’t think buy to let us going to be any less complicated though- as you will have all the legal and tax implications of being a landlord. For instance, if you act incorrectly as a landlord you can be liable to pay back 3x the deposit to the tenant. Loads of landlords are selling up at the moment as they want out of the game. I’m also unsure if you can get a btl mortgage on a first property?

Have you spoken to a mortgage adviser to see what your budget/repayments could be? Mortgage is usually cheaper than rent (which is ridiculous). Good plan about renting a room if you do need to top your deposit up. My experience is that the first year of home ownership is really expensive and often people haven’t budgeted for it as have put everything in to the deposit. 

Good luck 

Thanks for the response. Yeah there are a lot of things to take into consideration but I also believe as a landlord you know if you’re not treating your tenants correctly. Like not getting repairs done etc. But I do get your point. I think you can get as I’ve seen few people buying their first property under a btl, I guess the deposit needs to be higher in this case tho. 

I have although since I am starting a new job it would be difficult to get one, but I am over it. I’ll look at other options where I don’t have to get one. And yeah I get what you mean, you end up spending more as you’re not used to, so I’ll definitely save up even more !!