Mortgage help please

PasturesNew

While living next to your parents is a great idea for the best of reasons ... your other half might not be quite so keen if/when they start to require more time from you/her.

It's often the woman that ends up doing the extra work (whether that's popping round to make sure they're OK, doing a spot of shopping or being there for a chat) and the bloke thinks everything's fine, as he pops off down the pub. Only to come back from the pub 3 years later to find his dinner's in the dog and the note on the table tells him she's left.

While at the moment you might only see your parents once a week for an hour, if you were living next door their needs and expectations would grow. They might take to just popping round when they liked, maybe getting huffy with you until they've got their own key and can let themselves in. So there you are, Sunday afternoon, body chocolate and half the Ann Summers catalogue spread out, naked on the living room floor ....

drbeat

dmitch071 wrote: »

My collegues have mortgages in excess of 380k with some having 4 kids and they manage to survive go on holiday and have decent cars obviuosly I dont no the stresses behind closed doors!!!

Dave

Credit cards, loans, equity release? Just because others are doing it it doens't mean you have too.

Sounds like your dead set on getting this place. But just bear this in mind, gas engineers were also affected during the last recession. Contracts can be cancelled you know. I work in IT and am witnessing govt contracts being cancelled when we all thought that they would last 15 years.

In my honest opinion you are in the wrong place at the wrong time - the fact that you're considering a student lodger just goes to show that you cannot really afford this place. And do you really want a stranger hanging around whilst your trying to bring up a young family? I certainly wouldn't.

With the kind of deposit you've got you could easily shop around or even look into picking something up a repo at an auction!

dmitch071

Hi we have already had that conversation and is more than happy with the situation the only request is we dont knock the fence down between the gardens lol!! We have been together 8 years and 6 of them were with her living at my parents so we all know each others bad habits.

My family are all very close my nan and grandad both live on the estate in seperate houses as they divorced also my auntie and sister live there as well.

My girlfreind (wife on Aug 15) is also Ann Summers rep so I found that very funny.

On a serious note I no that they would never intrude and never expect anything from me thay are not like that at all, if anything it will be the other way round especially if the sticky stuff did hit the fan as there fridge is only next door lol.

Also it makes huge savings on childcare as nan,grandad,great nan and grandad and auntie are all within walking distance. And the area is great to be brought up as I lived that life growing up albiet a while ago but was never introduced to drugs and stuff and the area is sorounded by woodland and playing fields which is where I spent all my time.

Dave

dmitch071

Yes I appreciate your point about lodger but you must appreiciate I have only just started looking into this and this was a option good or bad but had to be thought about. However as you point out would not go this route with the baby. I can afford the mortgage and everything as it stands at the moment but its in 5 years time if the rates shot up but surely thats a worry for every one. On the job front I appreciate but im considered one of the best enginneers in my area and at 25 still have alot left there are guys that have been there 40 years and desperate to get out and others that are just a waste of space so think i have a few people under me should that happen. I have also recently started the management training process so expect in 5 years i will be better off than iam know but I will only take my current position into account and assume nothing will be different in 5 years.


Thanks for the advice the more points against it the better as all your points wil be seriously considered when I meet up with all my family to discuss the best option.

The last thing I want is to ruin my chances of a decent future by doing something silly but I also dont want to miss a chance that may never come again.

Dave

davidla

Mmmmmm, must be very tempting for you. We live a 5-10 minute walk from my mum and it's worked out very well.
However, you need to be careful that your heart doesn't rule your head. Take your family out of the equation for a moment. I have no idea if you can get a mortgage, but think about whether you can afford it. That should override every other concern. (Maybe this is all obvious too you - if so, sorry!)
David

dmitch071

just driven around the estate collecting info on how much houses are going for and seems the house is 30 to 40k under price I know not to read into the estate agents values as the markets decide that. Im still undecided due to the commitments I know I can afford at this moment, everyone I spoke to non moneysavingexpert seems to think I would be mad not to.


Do I take the plunge!!!!!!!!!!!!:mad:

Incisor

dmitch071 wrote: »

just driven around the estate collecting info on how much houses are going for and seems the house is 30 to 40k under price I know not to read into the estate agents values as the markets decide that. Im still undecided due to the commitments I know I can afford at this moment, everyone I spoke to non moneysavingexpert seems to think I would be mad not to.


Do I take the plunge!!!!!!!!!!!!:mad:

You are being asked £35k less than the asking prices for those houses. In the current climate, the selling prices for those houses may well be £35k less than the asking price.

I have been offered a family freinds house for 290,000 and was valued at 345,000.

If you pay £290,000 for it, it will be valued at £290,000. There is no magic formula to calculate value, although what the value is is the simplest thing in the world. It is worth exactly what someone will pay for it. It is worth, to the current owner, however much you pay for it if you buy it. To you it may be worth less, because, obviously, it doesn't make any sense to sell it to yourself, so it is worth what someone else will pay you. If you have paid more for it than anyone else would, then you would make a loss.

dmitch071

Incisor wrote: »

You are being asked £35k less than the asking prices for those houses. In the current climate, the selling prices for those houses may well be £35k less than the asking price.


If you pay £290,000 for it, it will be valued at £290,000. There is no magic formula to calculate value, although what the value is is the simplest thing in the world. It is worth exactly what someone will pay for it. It is worth, to the current owner, however much you pay for it if you buy it. To you it may be worth less, because, obviously, it doesn't make any sense to sell it to yourself, so it is worth what someone else will pay you. If you have paid more for it than anyone else would, then you would make a loss.

Sensible advice, the reason for looking into the values are for the mortgage purposes to me this house is worth alot more than money due to the position of the house and the changes it would make to alot of people

Incisor

dmitch071 wrote: »

... the reason for looking into the values are for the mortgage purposes to me this house is worth alot more than money due to the position of the house and the changes it would make to alot of people

Ahaa! Putting the money aside, we are now talking real value. This is the value to you of actually having it for yourself rather than of what you can get by selling it to someone else. You are talking sense.

But remember that if you look at value this way, the house might be worth more to you than you would pay ["I would sell this 4 bed detached over there, to get this 3 bed semi here"], but it should never be worth more to a bank than you would pay, and often less [the last few years have been an aberration]. So make sure that the deal is sound on the value to the bank, not on the value to you.

dmitch071

Incisor wrote: »

So make sure that the deal is sound on the value to the bank, not on the value to you.

hence the reason for my little drive around tonight.

I have spent alot of time today working out the risks involved and my worse case secenario is, say it really hit the fan in 5 years and intrest rates went up by a huge amount I could sell hoping the 80k I would have in the house would prevent any negative equity and then just rent.

This is how I look at it.

Bad Bits

Risk of recession = if it did happen I would more than likely be able to still survive even with a large intrest hike.

Losing job to recession or other means = Fairly low im 25 and considered one of the best engineers in my area.

Break up in relationship = well could never see it happening but I know everyone who gets married doesnt expect to break up.

Ill health = just as much as the next person, I will budget decent cover in.

Disposable income = my job means no need for c/c as unlimited overtime so when i need something can just work extra.

Good bits

very desirble area = a softened blow to price falls, easier than average to sell.

Kids = a very good place to grow up with very good school and places to play and plenty of other kids to grow up around. A safe place low crime and vandalism. Very little traffic through as only one way in and out of estate and our road is cul de sac.

in 25 years I will be 50 and all going well would be mortgage free with a lovely house and a final salary pension (as it stands at the moment).

If prices did fall wouldnt matter as im already in the place I want to stay.

Also as mentioned if prices dont really fall in years to come could be alot harder to get a mortgage for where I want to be, but I would already have it.

AND THE TOP POINT NO MORE WORRY ABOUT CLIMING THE EVER MORE SLIPPERY LADDER AS I WILL BE AS HIGH AS I WOULD EVER GET AND WHERE ALOT OF PEOPLE WOULD LIKE TO BE!!!!!!!!!! which means i can concentrate on getting the mortgage paid of as quick as poss.

Dave