Owning your own home

I may have to start a current project thread.

Yes please - I want to convert mine into something similar too so would make for interesting reading.

Too many checks can look bad when you're applying for a mortgage.

Or they can look good. Or they can make no difference.

Oh you're musicians? You should have said.

It'll be fine, musicians never fall out ;)

http://www.independent.co.uk/news/business/news/renting-in-london-is-cheaper-than-paying-a-mortgage-new-study-says-a6970741.html

damn it... should be renting in London to save money.

@ChainBreaker
bullshit article...

The media rent per month in London is £2,109 compared with the average monthly payment of £3,337, according to an analysis by Zoopla, a property firm.
To own a home in the capital thus costs around £15,216 more per year than renting, a difference of around 46 per cent.

Apart from the amusing media rent typo, they aren't comparing like for like. People tend not to get mortgages for rooms and not many people rent bigger properties. It's meaningless.

Or they can look good. Or they can make no difference.

OK. But I guess for the amount of interest it's not worth it.

It's a bit frustrating as basically I just didn't pull my finger out and open a savinga account at Xmas and now it feels like I'll have to wait.

@duncs makes the right point - in reality what are you meaningfully going to gain from opening a new, higher interest account? I wouldn't bother and get the house sorted quicker. You'll soon forget about any incremental interest improvements..

It also doesn't account for increases (or decreases!) in house prices.

Even if you do pay £15k more than rental a year (unlikely), theres a high chance your flat or house will have increased in value by more than that amount.

Considering interest rates are so low at the moment, you'd likely get sweet fuck all return from saving it as well.

Where are you based? do you mean 2.6m square? How big are the tiles?

The job might be small so the guy just whacks out a quote to almost not get you to go with it.

Stick the job on mybuilder and get 3 people round to quote.

We need to sit down with a solicitor.

That is definitely the best thing.

Just remember they usually charge by the hour. Having an agreement agreed in principle between you all in the key points will speed things up, and hopefully reduce cost. That said an independent 3rd party presenting options can feel less adversarial.

The Solicitor should have proformas for all this stuff, but it's always negotiations/amendements that take time and cost. The writing part tends to be easy. I'd make sure you all go prepared.

So much this. Based on the past 12 months, every penny spent on the mortgage has been offset by a two penny capital increase in the house value.

Every penny we ever spent in rent is dead money.

But renting is cheaper. So stupid article but not wrong. Right?

Renting a room or flat is cheaper than paying mortgage on a flat or a house? Yeah, it's not wrong there.

I wonder what kind of "average" is used for the £3337 mortgage payment figure, seems painfully high.

Yeah - I have no idea. My guess would be that the data is kind of funky and skewed, it seems really fucking high and rent doesn't.

The Zoopla article that the Indie article is based on:

http://www.zoopla.co.uk/discover/property-news/buying-more-cost-effective-than-renting-in-nearly-half-of-britain-s-50-biggest-cities-says-zoopla/#WjM18G4TL0LqtYZW.97

No data or methodology shown. Load of tosh.

People who make money selling houses issue press release highlighting dubious study that supports their own business model.

That's the real headline.

Lazy journalism is the crime.

We're about to start doing our kitchen... I remember a while back in this thread that someone had a recommendation for a place to get worktops from.
Has anyone bought their worktop from somewhere they'd be happy to recommend? Not sure what we're looking for yet, probably not stone...

But renting is cheaper.

Interest only mortgage is often cheaper still with these interest rates (assuming you have the appropriate deposit and you hold on to the place long enough for the stamp duty hit to be spread over the years) and you retain the capital increase when you do come to sell.

~£1200 interest a month on a £750k loan at current rates. What kind of rent are you going to pay on a £750k flat/house?

(We have an interest-only mortgage but treat it like a repayment mortgage, but the flexibility is there if we need it. We only got it because at the time we moved house my wife was between jobs and so, based on my salary alone, all they would give us was an interest-only mortgage. It has worked out well though.)

I'm currently renting a £750k flat for £2k per month although that is in central.

.

OK, so that'd be an £800 a month saving. To cover the £27500 stamp duty hit you'd need to stay there for about 3 years. Probably a few more months to cover the conveyancing costs and buildings insurance costs that you wouldn't pay if renting. From that point on that £800/month goes into buying equity in the property to give you more of a return upon eventual sale.

Getting a £750k interest-only loan is just a teensy bit tricky though. Min 10% deposit (more like 25% for the better rates with lower LTV) and 4 times combined salary means you'd need to be on a good whack (combined £140k with a 25% deposit). This is why the BTL and renting markets exist. You're also fucked if the rates jump up. It's all just a big gamble.

My thoughts (that I couldn't be arsed to type) exactly.

The term to use is 'tenants in common in unequal shares' as this is often used along with a 'deed of trust' which highlights how everything is paid and what share everyone gets.

For example, if it is a 1/3 share each, then you get 1/3 share of sale proceeds. If however, the deposits are unequal, and some people are paying more towards the mortgage, you can specify a set initial amount, and the amount of funds everyone gets is determined by an algorithm, subject to contribution towards mortgage and running costs. Conveyancing solicitors don't like dealing with anything more complicated than a standard split, so have a discussion with your purchase solicitor. Technically buying in tenants in common should not cost any extra, and solicitors often have a flat fee to deal with a deed of trust along with a purchase.

Looking for some advice:
We (me+1) are 2 years in to a joint (not tenants in common) 5 year fixed mortgage. The plan is that at the end of the 5 years, at which point we were always going to remortgage, the house goes into my name alone. Went in with 20% deposit, deposit and repayments are 50/50 - I'm thinking when the time comes it will basically be that We sell the house to Me, and +1 takes out half of what it sells for.
The problem is that we originally borrowed 10x my annual income. And I can't, currently, afford the repayments alone. I would very much like to keep the house and not end up just selling up completely, but I'm not sure what the best approach is. I'm thinking if I can sort my shit out in the next 3 years I'll be in a good place when it comes to speaking to the bank.

1. Try and earn significantly moar money? (but I like my job... )
   
2. Spend significantly less (the difference would need to be about £500 a month)
   
3. Get family to help increase deposit.
   I might be able to manage 1 and 2 in combination (without changing jobs), by doing some freelance and saving some money each month, but that would depend on engaging an as-yet untested level of financial discipline.
   
   

The equity thing is also confusing me. The value of the house has no doubt gone up, we will get a proper valuation at the time. What confuses me is: I have enough to replace half the original deposit (inheritance: fuck the rich... ), but probably not half the increase in value. When We sell I'd be getting the benefit of the increase and having to pay half of it out immediately, but if it is Me doing the buying I'd need an even bigger, less affordable mortgage... is it a win or a lose?

Having worked for banks in the past, savings accounts, bonds and ISAs generally don't have credit checks On application as you have no ability to borrow against them, they don't appear on your credit file at all, so should not affect the mortgage.

If you are getting an account from a brand new bank however, they may do a credit check as you are new to them.
If the purchase takes an extra couple of months, then the extra interest you get will be pretty minimal, particular compared to any hassle in transferring large amounts of funds close to exchange (no internet banking access, lost access details, requirement to find a branch to send a CHAPS transfer etc)

If you already have a mortgage agreed and an offer in place, very rarely do the lenders recheck your credit score, unless you tell them of a material change, address change, job change, etc. I've seen people apply for home improvement personal loans, car finance, open joint bank accounts etc without negative effects, though credit applications are definitely not advised until you complete.
(If the purchase falls though and you have to reply for a new property, with an interest only credit card opened and a £15k loan, things can get complicated)