Buying a house

Status
Not open for further replies.
BigDunc'sFod

BigDunc'sFod

Player Valuation: £35m
So, me and the missus both have jobs now (she's just completed a Masters and got a job right after greaduation which is great) and now we're starting to look for a place of our own. We haven't been pre-approved for a mortgage just yet, but we went to an open-house over the last couple of weeks around NYC.

The prices are a disgrace. However, we saw a place today that, although a little out of our price range, does have 2 apartments in good condition that if they were rented out would carry about 75% of the mortgage price.

We're not sure what to do. This is maybe only the 4th place we've looked at so far, but the missus is excited about the possibilities and wants to jump on it if we get approved. I'm currently in the more of an "I'd rather be able to afford my house without any renters", and I'm a bit concerned that there are better options out there (though there are definitely worse).

I was just wondering what is everybody's experience is with finding a place to own, what kind of things did you have to consider, and what gambles did you make that did (or didn't) turn out well?
 

Surveys.
Fees ( solicitors ).

Make sure the Banks Mortgage 'Promise' is watertight, before proceeding. They will pull it and cost sh*t loads of fees if not.
 
Mate personally I would want to be in a place where regardless of any other rental income ....I could afford to pay my mortgage and feel comfortable.... nothing more stressfull than working to just pay a mortgage.
 
Decided to buy a house a couple of years ago because interest rates are so low and my mortgage wasn't going to work out a lot more than the rent I was paying. Plus it's great to say that the patch of land you're on is "yours".

As it's your first place I reckon renting it to others will make you over protective of it, which is natural, I guess you have to overcome that if you want to save on the bills.

The other factor is the relationship with your missus, hopefully it won't strain it, and if you break up what happens with the mortgage.

It's ace though trust me, fairly young to buy my first house (25) but all of my older mates said they'd wished they'd done it at my age too as you'll be mortgage free far quicker!
 

Go with your "gut" If it feels right do it if you have a moment of uh-oh don't.
I've bought or built 10-12 times and the ones that didn't work out were the ones I had that doubt about.
Hope this helps.
 
noharmdone said:
Surveys.
Fees ( solicitors ).

Make sure the Banks Mortgage 'Promise' is watertight, before proceeding. They will pull it and cost sh*t loads of fees if not.
Click to expand...

Very much this. Do your sums, and make sure you know all the costs it'll inccur. Solicitors fees can often be hefty, and it's not uncommon here (not sure about in US) for mortgage providers to charge you for arranging the mortgage. Here it's usually upwards of 1k.

As Reidy said as well, the lender might look on your situation with your missus, and think you're not married (unless you are :lol:), but more importantly that she's very new in her job. That's a risk for them because the chance of losing a job is high(er) in the first 6 months.

It's also probable that because you're buying to let that the interest rate will be higher and/or they'll want a bigger deposit from you. That's often how it works here anyway. Buying two places and living in one, renting the other would complicate things a bit.
 
Unless you have enough savings to cover unexpected emergencies and periods where the property might not be let then I'd go down the route of buying what you can afford to cover yourself. Obviously the rewards from having the rental income are decent but only if you have a reliable tenant, do you really need the hassle with your first property if someone turns out to be unreliable and you then have to scrape every penny each month to cover the larger mortgage?
 
Bruce Wayne said:
Very much this. Do your sums, and make sure you know all the costs it'll inccur. Solicitors fees can often be hefty, and it's not uncommon here (not sure about in US) for mortgage providers to charge you for arranging the mortgage. Here it's usually upwards of 1k.

As Reidy said as well, the lender might look on your situation with your missus, and think you're not married (unless you are :lol:), but more importantly that she's very new in her job. That's a risk for them because the chance of losing a job is high(er) in the first 6 months.

It's also probable that because you're buying to let that the interest rate will be higher and/or they'll want a bigger deposit from you. That's often how it works here anyway. Buying two places and living in one, renting the other would complicate things a bit.
Click to expand...


If his Mrs has to do a probationary period then they may not approve until that is over and she is permanent, until then she is effectively doing the longest interview in history.

If forced to wait, put yourselves into max saving mode, the amount you could get together in the time it could all take can then be knocked off the mortgage ,which when someone goes into that kind of mode can soon mount up with 2 wages coming in. The extra you put in could mean that you won't be stretched and needing renters.


R.B.o.G. sorting out everyones lives but my own since 1984.
 
Bungle said:
Unless you have enough savings to cover unexpected emergencies and periods where the property might not be let then I'd go down the route of buying what you can afford to cover yourself. Obviously the rewards from having the rental income are decent but only if you have a reliable tenant, do you really need the hassle with your first property if someone turns out to be unreliable and you then have to scrape every penny each month to cover the larger mortgage?
Click to expand...


Isn't what he is thinking of doing exactly what folk have been doing, that has been part of the cause of the financial crisis ?

Mate did it in Seattle whilst working at Boeing, big house all paid for, could command a decent rent as well, except the rental market crashed and he now has a house that his money is in and is worth a whole lot less, he says it's not worth renting now as the work that undoubtedly needs doing each time a tenant moves out wouldn't leave him with any kind of profit worth being arsed about.
 

I'm of the mind when it comes to mortgage you should live slightly within your means as its prudent come what may plus you'll have more disposable cash to enjoy every month.

Anyway, get some coffee beans in the oven and your fingers right up her. Happy house warming lar.
 
Research the rental market, is it strong and will income from the apartments would allow you to put some of it aside for short periods when the properties are between tenant? Also what length of rental agreement is normal (as this may give you some peace of mind once a tenant is signed up). What kind of tenants are the apartments likely to attract (i.e. are they likely to cause you problems?).

If that all stacks up, it could be a great investment as you will be the one who owns the property that other people are helping you pay for.
 
One other thing to consider is how you will manage your rental. For instance most estate agents have plans in place to manage rentals. This can range from just doing the advertising/contracts, after which it's up to you to manage your tenant (deal with any problems), all the way up to a full service where they'll undertake any legal work needed to remove them etc. The fees vary depending on the kind of package you go with, but it can take a decent chunk out of your income.
 
Thanks for all the advice everyone

Here are the figures, stated in terms of the cost of the mortgage after putting down our deposit (which is currently all of our savings):

Mortgage: 100%
Tax: 8%
Prejected yearly maintenance cost: 8%
Total before bills: 116%

Rent 1: 50-65%
Rent 2: 50%

Remaining: 16% plus bills

So it looks like we can carry it. If you look at mine and my wife's take-home pay (after taxes, health insurance and all that nonsense), we actually earn the same, so together:
120% of the mortgage cost

So even if we didn't rent the place at all, we could scrape the mortgage together, forego the maintenance and just pay the taxes and bills.

Bit close for my liking at the moment though.
 

Status
Not open for further replies.

Welcome

Join Grand Old Team to get involved in the Everton discussion. Signing up is quick, easy, and completely free.

Register

Shop

Back
Top