Buying A House

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craner

Beast of Burden
This is going to be a very boring thread for a lot of people, but...

Has anybody ever brought a house?

I am in the advanced stages of thinking about buying a house. I have locations and prices in mind. I (sort of) understand mortgages. I'm not entirely sure how to choose one. Or do the sums.

I am a first-time buyer. What extra costs would I pay for a, say, £130,000 house. Solicitors fees, surveyor...what else?
 
hucks

hucks

Your Message Here
craner said:
This is going to be a very boring thread for a lot of people, but...

Has anybody ever brought a house?

I am a first-time buyer. What extra costs would I pay for a, say, £130,000 house. Solicitors fees, surveyor...what else?
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I bought one last year. It went incredibly smoothly and in retrospect I was very lucky.

What happened with me was that the estate agents recommended some solicitors. They said it would be easier for some reason I don't recall but clearly it was because they were on commission. Knowing no better I went with them but like I said it worked out fine, not least because all the relevant info moved between solicitors and estate agent quick easily.

They then sort out a survey, and you get to choose how much you spend. I did the cheapest one cos it was all so expensive anyhow but also cos I was buying a flat and there is less to check, cos I've got no roof. For the cheapest check they might not even go and visit the property so if you've any doubts at all you should get a more expensive one.

Somehow I have it in my head that I paid the solicitors 1.5k, but I got some of that back this year for reasons I don't really understand. I would imagine that's a flat fee, not related to the value of the house. I also paid a mortgage advisor but that's probably not worth it if you've got time to do your own research.
 
B

baboon2004

Darned cockwombles.
Don't have any personal experience, but a friend recently moved to a variable-rate mortgage form the fixed-rate mortgage loads of people had advised him he 'must have' when he bought the place 6-ish years ago, and now he pays around £300/month compared to £900ish/month. Don't understand how the difference can be that large (but it is), but worth knowing.
 
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craner

Beast of Burden
Mind you, is it best to pay as much as you can with a view to paying it off as quickly as possible, or is that sort of thinking foolish or irrelevant? I would be happy to pay £500 - £600 a month in the happy knowledge it was going towards something I will own, rather than some fucking landlord. I used to pay that much for rent in London. Eight years of wasted wages!
 
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baboon2004

Darned cockwombles.
Yeah, I'm thinking that way too, much as the cost of houses in London horrifies me and it's all a hideous racket. Renting is even more of a racket.

As to the £300, I don't understand it at all (he doesn't either) - not sure about the paying-as-much-as-you-can angle tbh.
 
IdleRich

IdleRich

IdleRich
"Mind you, is it best to pay as much as you can with a view to paying it off as quickly as possible, or is that sort of thinking foolish or irrelevant?"
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It depends on the type of deal. There is no point in borrowing money at a higher rate if you can borrow at a lower rate, although you will be paying more each month you won't pay it off more quickly cos you will be paying towards a larger total. On the other hand, if you are paying off your mortgage at a given interest rate then you will have fixed monthly payments. You can (with some mortgages) overpay which will decrease the size of the outstanding balance and mean that you pay it off more quickly.

"Don't have any personal experience, but a friend recently moved to a variable-rate mortgage form the fixed-rate mortgage loads of people had advised him he 'must have' when he bought the place 6-ish years ago, and now he pays around £300/month compared to £900ish/month. Don't understand how the difference can be that large (but it is), but worth knowing."
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Six years ago the UK interest rates were way higher than they are now. If he was paying 6% interest or thereabouts then and he switched to 2% now then it's conceivable that he would save that kind of money. Of course, if he had taken out a variable rate mortgage when he bought the house and interest rates had risen then he could have ended up paying six-hundred quid more each month. That's why if you're not a risk-taker then the fixed rate may be better.
If you do make the wrong decision you can normally change from one to another but the problem is that most mortgage providers will apply a large fee if you change from their mortgage to another one and this might wipe out any saving you get (also the rate might then move against you). Did your friend not have to pay a fee to change?
 
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baboon2004

Darned cockwombles.
Can anyone explain to me how the Help-to-Buy scheme is not going to end in utter disaster? (basically, £130bn total of mortgage guarantees being given out to anyone – young or old, speculator or second-home owner – who buys a house worth up to £600,000, offering 95% mortgages. All of this on the taxpayer, with no risk being shared with developers, as in previous, smaller schemes)
 
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craner

Beast of Burden
Who knows? It's no use to me however, as I'm going to buy an Edwardian inner-city house in Wales, so I don't qualify on (at least) three fronts.

The vexing thing I've discovered is (apparently, so I've been told) how touchy mortgage lenders are about the idea of lodgers. It seems to be the case that if I plan to have lodgers in my home they will be considered tenants by mortgage lenders, who will then insist I have a buy-to-let rather than a residential mortgage, which is a whole different ball game. As I would be residing in the house with the lodger who would share living space with me, and as the extra income would surely decrease the possibility of defaulting on payments, that seems crazy, wrong and counterintuitive.
 
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craner

Beast of Burden
Baboon, is your friend still happy with his variable-rate mortgage, or is he constantly worried that inTerest rates are going to rise?
 
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baboon2004

Darned cockwombles.
How much is your house costing, Craner? Is it still something around 130K, and what kind of mortgage payments are you looking at? I'm surprised about the lenders' view on lodgers, but maybe I'm being naive in being surprised.

As to the tracker mortgages, I think it's always a bit of a worry that interest rates will rise, but I think my friend's bargained for that and has been saving money in case of that eventuality, so as not to get a nasty surprise.

http://www.guardian.co.uk/money/2013/may/21/bank-ireland-reverses-mortgage-increase - this whole story is completely nuts. Don't go anywhere near a Post Office mortgage or anything else associated with BoI.
 
C

craner

Beast of Burden
Yes, around about that, preferably to knock down to £125,000, thus avoiding stamp duty. Apparently, the maximum monthly repayments I would be offered would be close to £600, but the good mortgage deals at the moment are more like £450, which is a lot less than I was paying just to rent a room in a shared house in London in 2009. I could exist with that outgoing (plus everything else) fairly happily, but one or two lodgers would allow me extra perks like holidays abroad or new shoes or an expensive girlfriend. I'm going to double check the thing about lodgers, and see if it does apply to exluded occupiers (it probably does); I need to check all of this out for income tax purposes, anyway.
 
hucks

hucks

Your Message Here
craner said:
Yes, around about that, preferably to knock down to £125,000, thus avoiding stamp duty. Apparently, the maximum monthly repayments I would be offered would be close to £600, but the good mortgage deals at the moment are more like £450, which is a lot less than I was paying just to rent a room in a shared house in London in 2009. I could exist with that outgoing (plus everything else) fairly happily, but one or two lodgers would allow me extra perks like holidays abroad or new shoes or an expensive girlfriend. I'm going to double check the thing about lodgers, and see if it does apply to exluded occupiers (it probably does); I need to check all of this out for income tax purposes, anyway.
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Don't tell them about the lodgers.

Also, there's a tax thing whereby if you're renting out a spare room cheaply (like less than 4k pa) there's no tax to pay. Here - https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme
 
C

craner

Beast of Burden
Yes, thanks. That's the sort of thing. I don't even understand that seemingly simple page, mind. Income tax gives me a headache. I immediately start seeing wavy lines.
 
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