On Thu, 11 Apr 2013 18:38:18 +0100, Orchid Win7 v1 wrote:

>>> On the one hand, I don't want to slow things down any more than they
>>> already are. On the other hand, I want to find the best deal.
>>
>> That's sensible.  Also bear in mind, though, that if you do a 30-year
>> term, most people don't stick with that term.  They refinance when the
>> interest rates go down, sometimes adjusting the term (in the US, it's
>> not uncommon to start with a 30-year term and then later to switch to a
>> 15- year term, or to just refinance with a new 30-year term).
> 
> Can you actually do that?

In the US, certainly.  We've refinanced once already, it's a fairly 
standard practice here.

> Obviously, I've never had a mortgage. But from other loans I've had, if
> you try to pay back more money or pay it off early, they charge you very
> steep penalty fines.

Home ownership is a different sort of thing.  Refinancing is different 
than paying it early, but some mortgages do have early payment penalties 
attached.  Others don't.

>> Just remember that the term isn't "the rest of your entire working
>> life",
>> it's "until you refinance or sell the property".  What you want is to
>> increase the value so when you sell, you get more than you paid (or
>> will pay in principal by the end of the term)
> 
> I had assumed that the value of a property can only go down, never up.

That's actually fairly rare.  Usually property appreciates in value.

> I mean, think about it. The longer I have the property, the older and
> therefore less desirable it becomes. The green fields around it get
> built on, reducing the value. The surrounding properties get cheaper so
> the wrong sort of people start moving in and making the neighbourhood
> undesirable. And so on.

And you also make improvements to the house.  You might (for example) put 
a new roof on it, or build an addition, or redo the kitchen.  Those 
things add value.

> I guess if you did something to massively transform the property you
> could conceivable raise its value. (E.g., taking a derelict shell and
> turning it back into a habitable building.) But other than that, it
> would seem obvious that property, like everything else, gets less and
> less valuable over time.

It doesn't take a massive transformation.  You'll want to talk to your 
estate agent about how to increase the value of your flat if/when you 
decide to sell it.

I bought my first place for $89K, and sold it for about $120K.  This 
current place we bought for $145K, and will likely get about $250K for.  
On the first place we did very little.  On this place, we've put a new 
roof on (paid for with $20K in equity), did a lot of repainting and some 
other not-so-insigificant things (proper vent for the stove, strip out 
the paneling and properly finished/updated the walls in the addition, 
improved the condition of the yard, installed a sprinkler system, added 
additional capacity to the circuit panel, and so on).

Before we move, we'll get the floors refinished as well (they're hardwood 
and need a good sanding/polishing).

Jim

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