General Buying a house

[Jack]

Do you consider buying a house nowadays is wise? Especially with energy prices, inflation, credit rates.

I spoke to a lot of people, and they all have different opinions. I know having a house is great, it's your own and you do whatever you want. But renting is a bit more freedom, but I agree, the landlord pays its own mortgage with money from tenants.

 

[ruedas]

Jack, it isn't a short term moneymaker so there is a time factor to be considered, but remember this, every pound you pay off your mortgage will be recovered when you sell. Sadly the less time you pay the mortgage the more of that goes to the lender.
If you go to term with the mortgage, then every penny of the sales price will be yours.
If you pay rent every penny of that is gone forever.
If you have a mortgage then your credit rating is better than that of a renter of similar means to yours, so you would pay less interest on loans and HP.
If you don't feel rooted and expect to want to move within a few years then it might not be wise to buy.
But otherwise if you can do it then it is a good idea.

 

[Jack]

Jack, it isn't a short term moneymaker so there is a time factor to be considered, but remember this, every pound you pay off your mortgage will be recovered when you sell. Sadly the less time you pay the mortgage the more of that goes to the lender.
If you go to term with the mortgage, then every penny of the sales price will be yours.
If you pay rent every penny of that is gone forever.
If you have a mortgage then your credit rating is better than that of a renter of similar means to yours, so you would pay less interest on loans and HP.
If you don't feel rooted and expect to want to move within a few years then it might not be wise to buy.
But otherwise if you can do it then it is a good idea.

Thanks for you advice ruedas . I'm nearly 30 years old and I also thinking about a family. Obviously for a family is better to have a house.

I'm a bit worried now because of current world situation, energy prices, and other factors which makes everything more expensive than it was before.

What do you mean by the less you pay, the more goes to the lender?

 

[ruedas]

Thanks for you advice ruedas . I'm nearly 30 years old and I also thinking about a family. Obviously for a family is better to have a house.

I'm a bit worried now because of current world situation, energy prices, and other factors which makes everything more expensive than it was before.

What do you mean by the less you pay, the more goes to the lender?

You pay off the mortgage, and the interest (usually), the less time you have been paying the more is left to pay, and thus they get more interest. You will get back at least what you have paid in in most cases, obviously negative equity can happen, but it rarely lasts for a long period. In the UK house prices only go up (they have gone down historically but always temporarily, also some areas are deprived and they suffer). The longer you stay in the house the more likely you are to get positive equity. We are looking at 70% positive equity after 8 years

 

[Jack]

You pay off the mortgage, and the interest (usually), the less time you have been paying the more is left to pay, and thus they get more interest. You will get back at least what you have paid in in most cases, obviously negative equity can happen, but it rarely lasts for a long period. In the UK house prices only go up (they have gone down historically but always temporarily, also some areas are deprived and they suffer). The longer you stay in the house the more likely you are to get positive equity. We are looking at 70% positive equity after 8 years

We have moved to North Yorkshire from London. And here house prices are more affordable than London. And we thinking about buying a house. But also aware of current prices situation, like energy prices, interest rate, and looks like the economy is going down as well. Would you say it is wise to invest and buy a house now?

 

[ruedas]

We have moved to North Yorkshire from London. And here house prices are more affordable than London. And we thinking about buying a house. But also aware of current prices situation, like energy prices, interest rate, and looks like the economy is going down as well. Would you say it is wise to invest and buy a house now?

If you can do so yes! The bottom line is that what you pay in rent is money you have spent, what you pay in a mortgage is money saved (less the lender's cut of course). The only thing to worry about is if the local house prices dip in your area, you can find out all about that on Rightmove or Zoopla. If prices drop after you buy you could end up with negative equity, but that won't be permanent, if you don't plan to move again soon it doesn't matter. (Negative equity is when what you can get by selling isn't enough to pay what you owe the lender, but obviously as you pay the mortgage that gets less and less likely).

 

[Jack]

If you can do so yes! The bottom line is that what you pay in rent is money you have spent, what you pay in a mortgage is money saved (less the lender's cut of course). The only thing to worry about is if the local house prices dip in your area, you can find out all about that on Rightmove or Zoopla. If prices drop after you buy you could end up with negative equity, but that won't be permanent, if you don't plan to move again soon it doesn't matter. (Negative equity is when what you can get by selling isn't enough to pay what you owe the lender, but obviously as you pay the mortgage that gets less and less likely).

Thanks, I've also heard about why buying a house now when I'll have to sell it later when I'll get old, to afford the care services. Not sure how truth is that.

 

[ruedas]

Thanks, I've also heard about why buying a house now when I'll have to sell it later when I'll get old, to afford the care services. Not sure how truth is that.

That's a long way off Jack, and you can sell your house at any time without buying another...

 

[Jack]

That's a long way off Jack, and you can sell your house at any time without buying another...

The thing is also, I was looking for freehold flat, but all flat looks like are leasehold.

I believe the leasehold needs to be renewed. Is that can be expensive?

 

[Phil Nicholson]

The thing is also, I was looking for freehold flat, but all flat looks like are leasehold.

I believe the leasehold needs to be renewed. Is that can be expensive?

Hi Jack, Leasehold usually 99 years after which the property belongs to the landlord. Personally I would not purchase a property which is leasehold, I would not rent either, to me that's dead money! Buying freehold property you are effectively saving money. It's always hard when you purchase a property for the first time cutting back on the little things you would normally do and possibly take for granted. In my humble opinion it is worth it in the long run. Incidentally many years ago in my youth I did rent a house, but had to move out with only 4 weeks notice because the owner was selling the property. Now that was 40 odd years ago and I suspect renters have a lot more protection against problems like that. Owning a freehold property you are safe, unless of course you default on the mortgage payments. But if you want to start a family I personally would not consider anything else. These comments are only my own personal view, but I hope it helps?

 

[Jack]

Hi Jack, Leasehold usually 99 years after which the property belongs to the landlord. Personally I would not purchase a property which is leasehold, I would not rent either, to me that's dead money! Buying freehold property you are effectively saving money. It's always hard when you purchase a property for the first time cutting back on the little things you would normally do and possibly take for granted. In my humble opinion it is worth it in the long run. Incidentally many years ago in my youth I did rent a house, but had to move out with only 4 weeks notice because the owner was selling the property. Now that was 40 odd years ago and I suspect renters have a lot more protection against problems like that. Owning a freehold property you are safe, unless of course you default on the mortgage payments. But if you want to start a family I personally would not consider anything else. These comments are only my own personal view, but I hope it helps?

Thanks for replying here Phil Nicholson . I do agree with you, ideally we want freehold properties, however, we can't really find one in the area we live. All the properties we saw online are leasehold. We do rent at the moment, but because of current information, the landlord has increased our rent a bit which is a bit frustrating.

An other question which I have in mind is, it is worth it buying a house during this difficult and expensive period?

 

[Phil Nicholson]

Thanks for replying here Phil Nicholson . I do agree with you, ideally we want freehold properties, however, we can't really find one in the area we live. All the properties we saw online are leasehold. We do rent at the moment, but because of current information, the landlord has increased our rent a bit which is a bit frustrating.

An other question which I have in mind is, it is worth it buying a house during this difficult and expensive period?

My understanding is that house prices have dropped over the last month, so I would say yes, but only you can decide to buy at the moment. Only you know what you can and cannot afford.

 

[Jack]

My understanding is that house prices have dropped over the last month, so I would say yes, but only you can decide to buy at the moment. Only you know what you can and cannot afford.

We have renewed our rent contract where we live anyway. But we plan next year to put down a deposit hopefully.

May I ask what we have to look for when buying a house?

Can we go straight to the bank for mortgage or we need solicitors for that?

 

[Phil Nicholson]

We have renewed our rent contract where we live anyway. But we plan next year to put down a deposit hopefully.

May I ask what we have to look for when buying a house?

Can we go straight to the bank for mortgage or we need solicitors for that?

I think the first thing you need to do is speak to the bank and see what they are prepared to lend you. Then you will know what value house to look for. Once you find a house the estate agents will normally recommend a solicitor, of course you don't have to use who they recommend if you want to use another firm that is your choice. The estate agents will handle the purchase and the solicitor will deal with the legal paperwork. I would recommend having a full survey of the potential property, again the estate agents can arrange that for you.

 

[Jack]

I think the first thing you need to do is speak to the bank and see what they are prepared to lend you. Then you will know what value house to look for. Once you find a house the estate agents will normally recommend a solicitor, of course you don't have to use who they recommend if you want to use another firm that is your choice. The estate agents will handle the purchase and the solicitor will deal with the legal paperwork. I would recommend having a full survey of the potential property, again the estate agents can arrange that for you.

Do we have to pay for that full survey as well?

 

[Phil Nicholson]

Do we have to pay for that full survey as well?

I'm afraid so, but honestly it is something I would not try to save on.

 

[Jack]

I'm afraid so, but honestly it is something I would not try to save on.

Mmm, thanks for advice. Will definitely be useful when we ready to make an offer.

By the way, are they expensive?

 

[ruedas]

The thing is also, I was looking for freehold flat, but all flat looks like are leasehold.

I believe the leasehold needs to be renewed. Is that can be expensive?

The length remaining on the lease is what matters, it isn't usually very expensive to renew a lease but it does cost a bit...

 

[Phil Nicholson]

Mmm, thanks for advice. Will definitely be useful when we ready to make an offer.

By the way, are they expensive?

That rather depends on the size and value of the property, but if your looking at a say a 2 bedroom terraced house, it could be between £300 - £600 this is just a rough idea, as I say it is down to the size of the property. If you don't want a full survey there are other options for surveys, but you may find the bank will want a full survey done.

 

[Jack]

The length remaining on the lease is what matters, it isn't usually very expensive to renew a lease but it does cost a bit...

So in another word, is not point looking at leasehold properties?