[RHCP]

A house has come up for sale in the next road to my parents for £185,000, with offers considered for a quick sale.

The house next door to is is going for £270,000.

The problem is that me and my girlfriends joint income is only £40,000.

I was thinking about offering £170,000. We have about £10,000 savings.

Is this too much or should i be thinking about something a bit cheaper.

Cheers for any input

[CFC1]

I think you should investigate why it is £85,000 cheaper than the house next door!

[RHCP]

The house next door, has five bedrooms and a conservatory. The one I'm looking at has four bedrooms.

[adam4478]

personally i'd go a bit further away from the parents

[shodan]

When it comes to houses I think a person should get the best (probably mean most expensive) house you can comfortably afford. It's okay stretching yourself a bit, just don't skint yourself each month as you never know when you'll need to pay out for something expensive uneccepted.

Although do bear in mind there are "hidden" costs to buying a house. Think up to 5 grand for fee's, and you have to have house insurence before you can get the mortgage signed over....

[Mep]

I know it's obvious but you need to work out (very accurately) all monthly costs involved, utilities, food, cars, AV, etc, etc and ensure you can afford the mortgage. Ideally you should have at least a 10% deposit otherwise you wont get the best mortgage rate...consider costs of moving...legal fees, stamp duty, etc ......do you have a place to sell?

[RHCP]

Nope, no place to sell.

[CFC1]

Still, that's a lot of money for a conservatory and a bedroom... why are the sellers wanting a quick sale, when they could go through the usual channels and get probably get more money? Mate, I am cautious by nature and am of the opinion that, if a deal looks too good to be true, then it probably is!
It is a massive step for you both and no matter how quickly the seller wants to deal, make sure you have a thorough survey done, to identify any actual/potential problems and also to advise whether the property is worth the money they are asking.

[krish]

I'm not sure you'd get a non-guarantor joint mortgage of £160K on that joint income, since lenders see co-buying couples as a greater risk

secondly you could be struggling with the repayments on that joint income ... just by comparison with my own lower loan and lower (than present) interest rate mortage .. £100K @ 4.39% = £549/month

- as others have mentioned utilities, CT, etc - adding up my DDs ... my own gas-elec-water-phone-broadband-mobile-TV Licence-home insurance-council tax = £230/month (I don't have Sky/NTL and have pretty good deals/tariffs with the utilities and phone/mobile/ISP)

anyway the stuff about the mortgage is anecdotal ... perhaps a mortgage professional here can clarify those points; or you may already have an agreement in principle and started budgeting for that

[RHCP]

No, i haven't even applied for a mortgage.

I know Abbey National do 5X joint income, which i know can be dangerous.

I'm going to inquire today about how much they can lend us.

So, £185,000 does seem a bit to high to aim for.

A friend has just bought a new build, which is nice but small. I couldn't live there for long. I know that he wants a bigger house in the future. He paid £135,000, i just think for another £40-50 grand i could get a nice big house for life.

[signs]

is it feasible that if you brought the house, you could maybe move a lodger in one of the spare rooms ,to help ease the bills etc

p.s a bit of advise given to me was "make sure you buy the worst house in the best area , not the best house in the worst area" (I'm sure this wont apply to this purchase , but it's worth keeping in mind.

[RugbyAl]

You may struggle at first, most people do when they start on the property ladder, but be sensible with your money and you wont regret it. I have just moved house (285k) and have a mortgage of approx 145k. My wife and I have a joint income about the same as yours but have childcare costs of about £220 PCM. We are surviving fine!

I have always found that within 2-3 years of moving house/increasing a mortgage, things get a lot easier financially.

[signs]

Originally Posted by RugbyAl

You may struggle at first, most people do when they start on the property ladder, but be sensible with your money and you wont regret it. I have just moved house (285k) and have a mortgage of approx 145k. My wife and I have a joint income about the same as yours but have childcare costs of about £220 PCM. We are surviving fine!

I have always found that within 2-3 years of moving house/increasing a mortgage, things get a lot easier financially.

i agree
i think you should push yourself , it will be hard short term , but long term you will reap the benefits

[neilmcl]

I think you should at least have a look at the place. The reason it's so cheap could possibly be because it needs quite a bit of work doing to it and if you're going to be struggling just to get the mortgage then how will you finance any of that.

[krish]

yep I'm probably out of date about the mortgage sum you could be offered

assuming you will be offered exactly what you want ...
forensically examine all the fixed outgoings
- I bought my new build (3 bed semi) towards end of '05, and was initially shocked at everything I had to budget for (before, during and after), but it gets quite manageable

Obviously there are all these buyer's hidden costs -
solicitors' conveyancing can be £500 - £800+
stamp duty @ 1% (www.hmrc.gov.uk/so/current_sdlt_rates.htm)
lender's valuation and mortgage arrangement fees can be an extra £500-£600
... also you might want to get a survey done (prices anyone?)

Just to illustrate furniture costs (not important right now) ... based on my own purchases - leather sofas (3 piece) £420; 2 king size wooden beadsteads + mattresses (duvets, pillows, cases, protectors all thrown in) £900; dining table and six chairs £400
- these were all purchased during sales along with a fair amount of haggling and getting free delivery and extended guarantees; so for a while I was using boxes, old chairs, sleeping bags etc. I have also been using Freecyle - and have picked up some perfect condition wooden bookcases and cabinets from people moving out of the UK.

[paul1967]

Go for it if the house next door is that much more then it shows the street can handle a higher price, if you can have a look at the house yourself , things to look for any cracks in the outside walls , are internal floors flat , if they have hard wood floors put a coin on and see if it rolls, look at door frames, when opening doors see if gap alteres between floor ,and frames crooked,when look for damp if so check where the drains are if a drains collapsed this can cause water to seep under the house , check guttering and spoutting for water seepage, also do in interanl inspection when it raining , this will be for windows, doors, and roof leaks , on the roof check the ridge line for dips, and for waving ,this will show timber movement , note all this when you get inspection done for the inspector to check. Check if wiring and plumbing has been up dated, if you now a plumber and a elect get them to have a quick look over ,these are bargining chips if you decided to buy . Good luck keep us posted
paul

[unique]

it shoulds like an incredible bargain. in edinburgh a one bedroom flat is about £100k minimum unless you want to find a dump in a dodgy area on the outskirts of town. a 2 bedroom is about £150k, so you would be lucky to get a three bedroom flat for £185k

the other thing is that in scotland, it's an offers over process, you usually have to offer about 20-30% over asking price at least, you can't offer under asking like in england

you don't say if it's your first property, but i get that impression. if you can get the mortage to afford it, then as long as there is nothing wrong with the property and you like the location, go for it.

i really pushed myself to get my first property, and money is tight and will be for a few years, but eventually when my wages go up, due to inflation etc the mortage payments will eventually become a lower percentage of my income

one of the benefits of you both having low incomes is that if you did lose a job, it shouldn't be that hard to find somewhere offering the same or more. likewise if you jump up the ladder a bit. i've heard stories of people getting a good job paying a lot of money, they get a car, house, etc, and the job doesn't work out, and they just can't get another one paying anything like they are used to, and they have to declare bankruptcy

with your salaries and cost of the house, you aren't really pushing yourselves that much. many people need many times thier salary to get enough mortgage for a first time basic property, thats a one bedroom flat. you might be pushing yourself, but you would be getting a cracking large property

if you do speak to your bank or mortgage lenders they will prolly go over the pro's and cons to ensure they are doing the right thing in lending to you

[zAndy1]

Go a quote from the nationwide building society and see what they'll lend you, I've found they are quite generous with their lending criteria but not to the point where they'll lend more than you can afford. For a mortgage of £160K you'd be looking at payments of approx £900pm I reckon, factor in about least £300 on top of that for council tax / gas / elec / water / tv / phone / internet / sky? You should have a joint take home of approx £2300 approx so I wouldn't have thought what you're looking at would be a problem really.

[Miyazaki]

See an IFA! That is the one piece of advise all first time buyers should take up!

[ykhan16]

Why on earth would you want to move closer to your parents?!

But seriously check that house over carefully- you dont want to be finding nasty suprises later on. Also when you're looking at the monthly repayments try to take into account future (predicted) rate rises if you're going to be on standard variable mortgage. Its always good to have a comfortable margin if finances are tight. I dont see any reason why you shouldnt move tho- best of luck!

[w3dal]

If you get the Mortgage fella go for it -

I paid £170,000 for my one bed duplex flat last march, so it seems your getting alot of house for the money.

Good luck fella.

once you have the mortgage approved and they accept your offer, get someone round to take a look and do a survey just so you know what your getting yourseleves in for - does it need a new roof for example???

Dal -

[ykhan16]

Originally Posted by w3dal

I paid £170,000 for my one bed duplex flat last march, so it seems your getting alot of house for the money.

Yikes! I've got a 2 bedroom house with a £15.5k mortgage- interest only! My parents are also emigrating in 3 months and they're leaving me their 4 bedroom house! Ahhh happy days!

[w3dal]

Originally Posted by ykhan16

Yikes! I've got a 2 bedroom house with a £15.5k mortgage- interest only! My parents are also emigrating in 3 months and they're leaving me their 4 bedroom house! Ahhh happy days!

yep - but its a very nice flat -

Im not complaining, at 27 i have a pretty good life, and feel lucky that i can afford my own place.

Dal

[Steve.J.Davies]

You could check more prices in the road/area on ourproperty.co.uk

[HiZ]

http://www.nethouseprices.com/ is well worth a look. Free Land Registry info.

[tomson]

Originally Posted by Games Guru

See an IFA! That is the one piece of advise all first time buyers should take up!

Best piece of advice yet. We're in the process of selling & buying somewhere at the moment - having an IFA do all the hard work really helps.

And he told us that we can borrow 600K if we want. Only 4k a month repayments

[Matt_C]

I'm right in the middle of buying my first home, and the costs involved are a killer!!!!

Just from the solicitors you will get;

Local and other searches
Official searches
ID Verification
Notice Fee
Archive Fee
VAT on the above

Stamp Duty (if applicable)
HM Land Registery Fee

Professional Fee's;
- Purchase
- Leasehold/Freehold
- Mortgage
- SDLT1 Form
VAT on the above

Bank Transfer Fee
VAT on the above

And thats just for the house I am buying (and you can add on another fee for processing a Shared Ownership poroperty) - total payable by me here is £5274 (£4k of which is desposit on mortgage)

then of course you have the lenders fee and lenders survey's that you have to pay to the mortgage lender. In my case thats about £750 (£325 survey and £425 lender fee)

It ain't cheap I can tell you!!!!

I am buying a 2 bed semi detached, on a shared ownership plan so I own 50% of a £160,000 property. So I have to pay £80k for my "share" - unfortunately that also means I have to pay rent on the other 50% of the property, taking my mortgage repayments from £450 to £600 per month - for a tiny bit more than that I could have had a mortgage on £160k, but no lender in their right mind would lend £160k to a single guy earning less than £25k a year.... (I actually eanr less than £20k a year in basic, but with bonus, sustainable but not guaranteed, it can be £23/£24k ish......

[unique]

Originally Posted by Matt_C

I'm right in the middle of buying my first home, and the costs involved are a killer!!!!

Just from the solicitors you will get;

SNIP

And thats just for the house I am buying (and you can add on another fee for processing a Shared Ownership poroperty) - total payable by me here is £5274 (£4k of which is desposit on mortgage)

then of course you have the lenders fee and lenders survey's that you have to pay to the mortgage lender. In my case thats about £750 (£325 survey and £425 lender fee)

It ain't cheap I can tell you!!!!

I am buying a 2 bed semi detached, on a shared ownership plan so I own 50% of a £160,000 property. So I have to pay £80k for my "share" - unfortunately that also means I have to pay rent on the other 50% of the property, taking my mortgage repayments from £450 to £600 per month - for a tiny bit more than that I could have had a mortgage on £160k, but no lender in their right mind would lend £160k to a single guy earning less than £25k a year.... (I actually eanr less than £20k a year in basic, but with bonus, sustainable but not guaranteed, it can be £23/£24k ish......

my collegue used a goverment scheme in scotland, he got a 2 bedroom flat, it was bought by the housing association before completion for £150k, where it's £175k to buy one of them now (it's a new estate). the scheme bought have his house, so he just had to organise the £75k 50% share, so with deposit his mortage was less than that. he doesn't have to pay rent on the other half, the council/govt gets 50% of the sale price if he sells though. he can buy in more percentage after certain periods pass, so within 10 years he could buy the whole 100% via mortgage

it's worth checking to see if you can get that, it might only be in scotland though, he was one of the first people to do it

oh, and when i got my mortgage the bank paid for my survey, but being a flat it was only about £150 or something. the fee's were 1% of the price of the property, restricted fee's as the solicitor was a friend of a friend (he prolly charged me the same as everyone else mind)

[Matt_C]

I know of those, but none in my area. The only scheme offered in my buying area was own part (minimum 50%) and pay rent on the other half.

It's not a new build either - it's a 10yr old property. The housing company bought it, then sells half of it to a buyer, and charge rent on the other half. Then when it sells, if it sells for say £20k more than the original purchase price, the housing company gets £10k and the vendor gets £10k. The next buyer pays the 50% price of the property, and pays rent on the other half.

If I buy more percentages of the property, then the rent decreases accordingly

I admit, it's not an ideal situation, but if I don't do it this way, then I would have to buy a whole property on my own ,and seeing as I can only afford about £80k, it's either this 2 bed semi, which is a nice HOUSE, or a 1 bed FLAT in a tower block, or a studio apratment in a maisonette - the latter of which I still probably couldn't afford!!!!!

And yes of course, you can have the lender pay the survey fee's and even waive the arrangement fee's - but you will still end up paying for them as they add it into the interest charged on the repayments. For proof just look at the difference in rates/repayments on a mortgage WITH fee's and a mortgage without.

Seeing as I have money saved up, it made more sense to fork out for the fee's in cash now, and pay them only once, that pay for them over and over for the next 30yrs in interest

[Sonic67]

Yes buying a house is expensive but what else are you going to do with the money? Cars and AV gear depreciates in value. Going out just means you are *@$%ing your money up the wall. This is one of the few things in life which will go up in value. Then there's nothing like the feeling of getting back to your own place and relaxing Or in doing whatever you want with the house.