Buying a home to live in that has a tenant in situ need advice

eddddy

SneakySpectator said:

Well if I made an offer and it was accepted I could proceed with the mortgage application, but I won't actually sign anything until the tenants are out, the keys are handed back and the flat is empty. 

But the estate agent might be quite insistent on getting the ball rolling by starting the conveyancing process with my solicitor etc?

It's up to you to assess the situation, and therefore the level of risk, and therefore, what you want to do.

As I mentioned, possible situations include...

• The tenants have given notice to leave on 31st July. They leave on 31st July, and leave the property in a good state

• The tenants have been told to leave (served a section 21 notice), but they don't want to. So it takes 6 months or more to evict them. In the meantime, your mortgage offer runs out. When they eventually leave, you find they've wrecked the house - so you don't want to buy it any more. You've lost all the fees you've paid.

Plus dozens of other possible situations.

The estate agent (and seller) would certainly be happier if you got the ball rolling immediately - but then it's not them who would lose a mortgage application fee, legal fees, survey fees etc, if it all falls apart.

BungalowBel

My advice is also to not even put an offer in until the house is vacant.  It can take a year or more to evict tenants who don't want to go.

You might be better off looking for something else.

SneakySpectator

BungalowBel said:

My advice is also to not even put an offer in until the house is vacant.  It can take a year or more to evict tenants who don't want to go.

You might be better off looking for something else.

eddddy said:

SneakySpectator said:

Well if I made an offer and it was accepted I could proceed with the mortgage application, but I won't actually sign anything until the tenants are out, the keys are handed back and the flat is empty. 

But the estate agent might be quite insistent on getting the ball rolling by starting the conveyancing process with my solicitor etc?

It's up to you to assess the situation, and therefore the level of risk, and therefore, what you want to do.

As I mentioned, possible situations include...

• The tenants have given notice to leave on 31st July. They leave on 31st July, and leave the property in a good state

• The tenants have been told to leave (served a section 21 notice), but they don't want to. So it takes 6 months or more to evict them. In the meantime, your mortgage offer runs out. When they eventually leave, you find they've wrecked the house - so you don't want to buy it any more. You've lost all the fees you've paid.

Plus dozens of other possible situations.

The estate agent (and seller) would certainly be happier if you got the ball rolling immediately - but then it's not them who would lose a mortgage application fee, legal fees, survey fees etc, if it all falls apart.

Thanks for both your input. The problem is I really don't have that many options, I'm a single person and the max mortgage I can get is £147,000, even with a £50k deposit! Because my annual salary is only £29,000 and I'm 36 years old so I can't exactly get a 40 year mortgage... 

So I have to balance between 20 - 25 year mortgage which limits my monthly repayment amount (no more than £600 per month). Basically I'm capped at flats no more than £135,000 otherwise I'm just being irresponsible. 

And it just so happens that a lot of the flats around me are in the £120,000 - £140,000 range and almost all of the decent ones current have tenants in situ and because I am so desperate to buy and with limited funds, I feel like I'm not in a strong position to be picky...

RAS

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

SneakySpectator

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

user1977

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

But you don't need to if you are making overpayments at some point.

jennystarpepper

user1977 said:

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

But you don't need to if you are making overpayments at some point.

  I Will add to what @U@user1977 has said, as you pay your mortgage your balance will come down, giving you a better rate when your fixed term ends.  I shaved 3 years off a mortgage by doing just this (with no overpayments) and not altering the instalment amount.  Yes, rates can go up, but the balance is still coming down each month.  

RAS

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

When your mortgage becomes a smaller portion of your living costs, you overpay. I actually started with a 15% mortgage, oh joy, but when the rate halved, I decided to pay a little more than half each month. That soon cut the amount of capital I owed, which began a virtuous cycle so I paid off 75% in the next 15 years.

lincroft1710

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

A 30 year mortgage would take you to 66 yrs old by which time state pensions may not start until the age of 70. My mortgage wasn't paid off until I was 68, but my work pension adequately covered the repayments.


Trying to buy a tenanted property is not a sensible idea, the vendor is seemingly offloading their property portfolio but for whatever reason is unable to get the tenant to leave.

SneakySpectator

RAS said:

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

When your mortgage becomes a smaller portion of your living costs, you overpay. I actually started with a 15% mortgage, oh joy, but when the rate halved, I decided to pay a little more than half each month. That soon cut the amount of capital I owed, which began a virtuous cycle so I paid off 75% in the next 15 years.

This makes a lot of sense actually. I thought you get charged for making overpayments though?

lincroft1710 said:

SneakySpectator said:

RAS said:

Why can't you get a mortgage longer than 25 years? 30+ is pretty normal now.

Inflation will eat into the cost of your repayments within say 5 years. It'd be reasonable to expect to clear a 35 year deal in 25 years.

Because I'm 36... A 25 year mortgage is already making me work until 61, I really don't want to be working into my 70's. 

A 30 year mortgage would take you to 66 yrs old by which time state pensions may not start until the age of 70. My mortgage wasn't paid off until I was 68, but my work pension adequately covered the repayments.


Trying to buy a tenanted property is not a sensible idea, the vendor is seemingly offloading their property portfolio but for whatever reason is unable to get the tenant to leave.

Yeah I'm having second thoughts as well now, the estate agent straight up told me that once we are further down the line and close to sealing everything, the tenants will be issued their section 21 notice. 

So I'm looking at 2 months of conveyancing before the section 21 even gets issued, then 2 months notice for that, then if they refuse to leave another few months, then court orders, repossession order etc. I was "assured" by the EA that 

"I’ve spoken with the owner, and he has confirmed he will give notice to the tenants when we are further along the legal process, and we won’t exchange contracts until the tenants have moved out and you’ve viewed again to ensure that your happy. You solicitor will also advise to view the property prior to exchange anyway."

But I've not even done an initial survey yet and I don't want to start sinking solicitor fees into this only for it to drag out for half a year only to find out there's some major issue after the tenant left.