Holy hell, I just bought a house. o_O



...well, OK, technically it's a flat. But the principle is the same. 
Hopefully in a few months I'll have a place of my own to live in.

(And now I'm suddenly feeling awfully twitchy about whether my job is as 
secure as I think it is!)

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On 09/04/13 18:18, Orchid Win7 v1 wrote:
> Holy hell, I just bought a house. o_O
> 
> 
> 
> ....well, OK, technically it's a flat. But the principle is the
> same. Hopefully in a few months I'll have a place of my own to live
> in.
> 
> (And now I'm suddenly feeling awfully twitchy about whether my job
> is as secure as I think it is!)

Welcome to the property-owning classes. You are now officially an
enemy of the people :-D

BTW extremely-belated congratulations on getting a 'real' job

John

- -- 
The level of my sarcasm depends upon the level of your stupidity
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On Tue, 09 Apr 2013 18:18:57 +0100, Orchid Win7 v1 wrote:

> Holy hell, I just bought a house. o_O

Well done. :)

> ...well, OK, technically it's a flat. But the principle is the same.
> Hopefully in a few months I'll have a place of my own to live in.
> 
> (And now I'm suddenly feeling awfully twitchy about whether my job is as
> secure as I think it is!)

Welcome to adult life. :)

Jim

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On 09/04/2013 06:28 PM, Doctor John wrote:
> Welcome to the property-owning classes. You are now officially an
> enemy of the people :-D
>
> BTW extremely-belated congratulations on getting a 'real' job

Heh, thanks. We'll see how this works out... Unfortunately buying a 
house isn't like buying a loaf of bread. It's pretty complicated, slow, 
and risky. I might not actually end up getting this flat. But here's to 
hoping...

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>> Holy hell, I just bought a house. o_O
>
> Well done. :)

You can congratulate me *after* I actually get the keys. ;-)

>> (And now I'm suddenly feeling awfully twitchy about whether my job is as
>> secure as I think it is!)
>
> Welcome to adult life. :)

o_O

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On 09/04/13 18:41, Orchid Win7 v1 wrote:

> Heh, thanks. We'll see how this works out... Unfortunately buying
> a house isn't like buying a loaf of bread. It's pretty complicated,
> slow, and risky. I might not actually end up getting this flat. But
> here's to hoping...
> 

The fact that you have even considered getting your own piece of terra
firma is evidence to me that you have advanced way beyond the person
that Stephen, Steve (the late) and I met some years ago. I salute you
(I am not being sarcastic)

John

- -- 
The level of my sarcasm depends upon the level of your stupidity
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Orchid Win7 v1 <voi### [at] devnull> wrote:
> Holy hell, I just bought a house. o_O
>
>
>
> ...well, OK, technically it's a flat. But the principle is the same.
> Hopefully in a few months I'll have a place of my own to live in.

guess all the organ humming finally got to your parents, huh? :)

> (And now I'm suddenly feeling awfully twitchy about whether my job is as
> secure as I think it is!)

only death is a sure bet in life

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On 09/04/2013 07:02 PM, Doctor John wrote:
> The fact that you have even considered getting your own piece of terra
> firma is evidence to me that you have advanced way beyond the person
> that Stephen, Steve (the late) and I met some years ago. I salute you
> (I am not being sarcastic)

Why thank you. :-)

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On Tue, 09 Apr 2013 18:50:36 +0100, Orchid Win7 v1 wrote:

>>> Holy hell, I just bought a house. o_O
>>
>> Well done. :)
> 
> You can congratulate me *after* I actually get the keys. ;-)

It's a step in the right direction - especially since I recall you saying 
a few years ago that you couldn't understand how anyone could afford to 
own a place of their own. :)

>>> (And now I'm suddenly feeling awfully twitchy about whether my job is
>>> as secure as I think it is!)
>>
>> Welcome to adult life. :)
> 
> o_O

There's no certainty in life.  When I bought my first home, I had moved 
1200 miles from where I grew up for a job with a company I'd never heard 
of (other than being referred by a friend and doing an interview when I 
was in town for a conference).  I stayed with that friend for about 6 
months before getting my own place.

I stayed with the job for 18 months.  Nearly lost the house because I 
didn't have the savings to pay the mortgage while I looked for work for 3 
months - and did a contract that didn't pay when they said they would 
(got paid 3 weeks after starting the new job, and the new job's first 
paycheck took 30 days to be paid - they were on a monthly pay schedule, 
and I started on the first of the month and payday was the last day of 
the month).

Having to deal with that uncertainty - by balancing income and 
expenditures, savings, and getting the bills paid - that's "adult life".  
My wife and I constantly are saying "I don't want to be an adult!", but 
we do it.

I'm nearly 2 years out of being laid off (next month, actually) - still 
in the house, still balancing income and expenses, and planning another 
move (this year) farther west.  I'm what's known in the US as a "1099 
employee" - essentially self-employed, but someone else handles my 
billing and organizing my contracts, and all my income is pre-tax, so I 
have to make quarterly estimates and pre-pay my taxes.  (The name comes 
from the form - a "1099" government form - that my income is reported to 
the government by my employer).

What I'm trying to say is that feeling twitchy about the job being secure 
is a good thing - that being twitchy about it is a normal part of adult 
life.  In life there are no guarantees, so keep doing a good job at work, 
and everything may well continue to work out well.  But I learned the 
hard way that even doing a good job at work isn't absolute prevention 
against being laid off (in my case, my contribution and ROI wasn't even 
considered - how much I cost was the only consideration, according to the 
decision maker who laid me off).

So keep feeling twitchy and be assured that that's normal and healthy.  
Move into the flat and have fun. :)

Jim

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On 09/04/2013 7:02 PM, Doctor John wrote:
> The fact that you have even considered getting your own piece of terra
> firma is evidence to me that you have advanced way beyond the person
> that Stephen, Steve (the late) and I met some years ago. I salute you
> (I am not being sarcastic)

Seconded.
I hope all goes well, it is not a bad time to buy.
We demand pictures of the house warming party. :-)

-- 
Regards
     Stephen

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>> You can congratulate me *after* I actually get the keys. ;-)
>
> It's a step in the right direction - especially since I recall you saying
> a few years ago that you couldn't understand how anyone could afford to
> own a place of their own. :)

Heh, well... *technically* I'm only buying 30% of a flat. o_O Still one 
hell of a lot of money though - more money than I'll ever own.

It's kinda far from work. But that also means it's kinda far from my 
mother. ;-)

> There's no certainty in life.

Only Death.

> So keep feeling twitchy and be assured that that's normal and healthy.
> Move into the flat and have fun. :)

Well, here's to hoping. (As I say, I'll celebrate when I actually have 
the keys in my hand for real and I know nobody's going to call off the 
deal...)

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On Tue, 09 Apr 2013 21:25:12 +0100, Orchid Win7 v1 wrote:

>>> You can congratulate me *after* I actually get the keys. ;-)
>>
>> It's a step in the right direction - especially since I recall you
>> saying a few years ago that you couldn't understand how anyone could
>> afford to own a place of their own. :)
> 
> Heh, well... *technically* I'm only buying 30% of a flat. o_O Still one
> hell of a lot of money though - more money than I'll ever own.

I've learned never to say "never" about such things.  :)

> It's kinda far from work. But that also means it's kinda far from my
> mother. ;-)

Which is a good thing (trust me; I love my mum, but some distance has 
been good for the relationship, too).

>> There's no certainty in life.
> 
> Only Death.

Well, and taxes. ;)

>> So keep feeling twitchy and be assured that that's normal and healthy.
>> Move into the flat and have fun. :)
> 
> Well, here's to hoping. (As I say, I'll celebrate when I actually have
> the keys in my hand for real and I know nobody's going to call off the
> deal...)

That's the right attitude. :)

Jim

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> Holy hell, I just bought a house. o_O

Congratulations - good move! Did you move closer to work? :-D

> (And now I'm suddenly feeling awfully twitchy about whether my job is as
> secure as I think it is!)

What's the worst that's going to happen? Even if somehow the company 
goes bankrupt and can't afford to pay you from tomorrow onwards most 
banks are pretty good with giving you a few months leeway to find a new 
job without evicting you. Or to be super-safe just make sure you have 
enough money to pay a few months mortgage without a job.

My sister's boyfriend is just like that, for the last 10 years he's been 
worried about his job and they've never bought anywhere. They must have 
dumped something like £80k in rent during that period...

 > Heh, thanks. We'll see how this works out... Unfortunately buying a
 > house isn't like buying a loaf of bread. It's pretty complicated, slow,
 > and risky.

If you think this is complicated and slow, wait until you have somewhere 
to sell at the same time, *that* is slow :-) Seriously though the whole 
system is arcane and solely exists to keep solicitors and estate agents 
highly paid. I recommend finding a solicitor that's happy to do 
everything by email (many still want to send stupid letters for even 
very simple things).

 > I might not actually end up getting this flat. But here's to
 > hoping...

What stage are you at then? Make sure you keep asking your solicitor 
that you've done and signed all you need to as early as possible, and 
then ask what they're waiting for to move forward.

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On 10/04/2013 08:30 AM, scott wrote:
>> Holy hell, I just bought a house. o_O
>
> Congratulations - good move! Did you move closer to work? :-D

I currently live so close to work that almost *everywhere* would be 
further away.

The new place is further away from work. It's right near a main road 
that cuts diagonally across the MK grid, so it should be quite 
fuel-efficient to get to work. Just get on a road and drive in a 
straight line until I get there.

It's also further away from my mum, so... ;-)

>> (And now I'm suddenly feeling awfully twitchy about whether my job is as
>> secure as I think it is!)
>
> What's the worst that's going to happen? Even if somehow the company
> goes bankrupt and can't afford to pay you from tomorrow onwards most
> banks are pretty good with giving you a few months leeway to find a new
> job without evicting you. Or to be super-safe just make sure you have
> enough money to pay a few months mortgage without a job.

Heh. Right now I'm trying to make sure I have enough money to *buy* the 
place. This is why I'm only buying 30% of it; I just don't have the cash 
to buy an entire property.

>  > Heh, thanks. We'll see how this works out... Unfortunately buying a
>  > house isn't like buying a loaf of bread. It's pretty complicated, slow,
>  > and risky.
>
> If you think this is complicated and slow, wait until you have somewhere
> to sell at the same time, *that* is slow :-)

Well, there is that. The current owner apparently wants to sell quickly 
for more or less this exact reason. I guess that's why my first offer 
was accepted - and why it's so cheap.

>  > I might not actually end up getting this flat. But here's to
>  > hoping...
>
> What stage are you at then? Make sure you keep asking your solicitor
> that you've done and signed all you need to as early as possible, and
> then ask what they're waiting for to move forward.

I made on offer, it has been accepted, and I'm told the property will be 
taken off the market. Now I need to have surveys done, appoint a 
solicitor, finalise a mortgage application, etc. In other words 
EVERYTHING ELSE. So I'm really just at the beginning here...

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> It's also further away from my mum, so... ;-)

Never a bad thing - I strategically placed myself with the M25 between 
us, and as she refuses to use that road on her own I don't get any 
surprise visits :-)

> Well, there is that. The current owner apparently wants to sell quickly
> for more or less this exact reason. I guess that's why my first offer
> was accepted - and why it's so cheap.

I was lucky with both my house purchases that the previous owners 
weren't buying anywhere - makes things faster and less reliant on others.

> I made on offer, it has been accepted, and I'm told the property will be
> taken off the market. Now I need to have surveys done, appoint a
> solicitor, finalise a mortgage application, etc. In other words
> EVERYTHING ELSE. So I'm really just at the beginning here...

So you're holding things up at the moment then :-) Get a friend to phone 
up to make sure the property is really taken off the market - often the 
estate agent will continue showing people round hoping for a better 
offer, or to ask you to up your offer.

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On 10/04/2013 09:37 AM, scott wrote:
> So you're holding things up at the moment then :-)

Yeah, pretty much. ;-)

> Get a friend to phone
> up to make sure the property is really taken off the market - often the
> estate agent will continue showing people round hoping for a better
> offer, or to ask you to up your offer.

When I looked yesterday, it was still listed on Zoopla. But I looked 
just now, and it appears to have vanished now.

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On 10/04/2013 12:54 PM, Orchid Win7 v1 wrote:
> On 10/04/2013 09:37 AM, scott wrote:
>> So you're holding things up at the moment then :-)
>
> Yeah, pretty much. ;-)

And then of course there's the small matter of ringing round places that 
only open during my work outs to try to find the best mortgage rates. 
Because, you know, when the principle is drastically more money than you 
will ever own, and the term is the rest of your entire working life, 
compound interest is pretty steep...

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.

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On Wed, 10 Apr 2013 22:32:03 +0100, Orchid Win7 v1 wrote:

> On 10/04/2013 12:54 PM, Orchid Win7 v1 wrote:
>> On 10/04/2013 09:37 AM, scott wrote:
>>> So you're holding things up at the moment then :-)
>>
>> Yeah, pretty much. ;-)
> 
> And then of course there's the small matter of ringing round places that
> only open during my work outs to try to find the best mortgage rates.
> Because, you know, when the principle is drastically more money than you
> will ever own, and the term is the rest of your entire working life,
> compound interest is pretty steep...
> 
> 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).

We've been in this house for 11 years, and have paid down the principal 
by a little bit.  But the value has gone up, too - and we expect to get 
about $100,000 more selling it than we paid for it (the market in Utah 
didn't crash as badly as other parts of the US, and the rebound has been 
quicker).  So it's something of an investment, too - it's not just about 
what you're paying in, but what you get out of it when you sell it.

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)

Jim

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> Because, you know, when the principle is drastically more money than you
> will ever own, and the term is the rest of your entire working life,
> compound interest is pretty steep...

Don't worry about it, you can swap to another product as soon as any 
offer period is over - and usually it's a good idea to do so as the bank 
will revert you to some ridiculous rate by default. I found 2 year 
fixed/tracker (as the base rate won't likely change any time soon) to be 
a good compromise.

Also I'm sure you're aware they try to take advantage of people intent 
on the lowest interest rate or lowest initial fee by offering various 
combinations of fee/interest rate. Just set up an Excel sheet with it 
all in (including any offers like cashback) and see which leaves you 
best off after a few years (not after 30 years!).

> 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.

Use the internet (comparison websites are a good place to start, then 
move on to the banks themselves), websites are open 24/7 and once you've 
found the one you want I've found most banks have phonelines open quite 
late in the evening to answer any questions or set things up.

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On 11/04/2013 08:39 AM, scott wrote:
>> Because, you know, when the principle is drastically more money than you
>> will ever own, and the term is the rest of your entire working life,
>> compound interest is pretty steep...
>
> Don't worry about it, you can swap to another product as soon as any
> offer period is over - and usually it's a good idea to do so as the bank
> will revert you to some ridiculous rate by default. I found 2 year
> fixed/tracker (as the base rate won't likely change any time soon) to be
> a good compromise.

Interestingly, all the products I've looked at give you something like 
5% fixed rate for a few years, and then it reverts to 3.2% or something. 
So once the initial fixed period wears off, you're drastically *better* 
off... Doesn't make any sense to me, but hey.

> Also I'm sure you're aware they try to take advantage of people intent
> on the lowest interest rate or lowest initial fee by offering various
> combinations of fee/interest rate. Just set up an Excel sheet with it
> all in (including any offers like cashback) and see which leaves you
> best off after a few years (not after 30 years!).

Heh, yeah, because comprehending financial documents is actually 
possible. :-P

>> 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.
>
> Use the internet (comparison websites are a good place to start, then
> move on to the banks themselves), websites are open 24/7 and once you've
> found the one you want I've found most banks have phonelines open quite
> late in the evening to answer any questions or set things up.

According to channel 4, the deal you get from your estate agent is 
always the worst one. And yet, everywhere I've looked or asked has 
either offered a far worse rate, or at best the same rate as I've 
already got.

It seems the only way to lower the interest rate is to have a bigger 
deposit. Now if I could just magic tens of thousands of pounds out of 
thin air...

(My mum is seriously suggesting that I should take out a credit card and 
put the shortfall on that, just to get the cheaper interest rate on the 
mortgage. Because, you know, *that* won't be expensive at all...)

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>> 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?

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.

> 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.

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.

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.

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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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>> 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.

Hmm, OK. I'm not sure how much of that I'm allowed to do since I'm not 
actually buying the entire thing, I'm renting part of it from somebody 
else. It's just one more of the things on my list of stuff I need to 
figure out...

Post a reply to this message

Orchid Win7 v1 <voi### [at] devnull> wrote:
> I just bought a house.

> I'm renting part of it from somebody else.

Quite different things.

-- 
                                                          - Warp

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On 11/04/2013 08:39 PM, Warp wrote:
> Orchid Win7 v1<voi### [at] devnull>  wrote:
>> I just bought a house.
>
>> I'm renting part of it from somebody else.
>
> Quite different things.

I bought 30% of a house. I'm going to rent the other 70% of it.

Oh, and if we're being pedantic, it's actually a flat...

Post a reply to this message

On Thu, 11 Apr 2013 20:09:56 +0100, Orchid Win7 v1 wrote:

>>> 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.
> 
> Hmm, OK. I'm not sure how much of that I'm allowed to do since I'm not
> actually buying the entire thing, I'm renting part of it from somebody
> else. It's just one more of the things on my list of stuff I need to
> figure out...

Rental is a different thing, obviously - we own our home, we're not 
renting it.

The arrangement that you've got, are you getting ownership/title in the 
property?  Or are you signing a rental agreement?

Jim

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On Thu, 11 Apr 2013 22:37:41 +0100, Orchid Win7 v1 wrote:

> I bought 30% of a house. I'm going to rent the other 70% of it.

If you're going to rent 70% of the place (ie, you're the landlord), then 
you own it and can change what you like as long as it's to building code 
and whatever local regulations are.

Jim

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> Interestingly, all the products I've looked at give you something like
> 5% fixed rate for a few years, and then it reverts to 3.2% or something.

Odd, when I looked about a year ago all were around 2.9-3.2% for a few 
years then reverting back to around 4%. I guess it depends on your loan 
to value ratio (a quick look at a few sites mentions 30% deposit is 
needed for their "special offers"). Still strange that you actually pay 
a worse rate during the fixed period than the standard rate, that's 
usually meant to be a better deal - I assume you can't just ask to go 
directly on to the standard rate then?

> Heh, yeah, because comprehending financial documents is actually
> possible. :-P

The sites I looked at clearly listed the "fee", interest rate and any 
other items (eg no early repayment fee, free valuation/conveyancing, 
cashback offer) in a simple table.

> According to channel 4, the deal you get from your estate agent is
> always the worst one. And yet, everywhere I've looked or asked has
> either offered a far worse rate, or at best the same rate as I've
> already got.

You mean for the mortgage or the solicitor fees? I've never had the 
estate agent (especially not the one representing the seller of the 
house I'm buying) try to sell me a mortgage, but often estate agents 
have a deal going with local solicitors to get business. If you're 
selling you can sometimes use this to get a really good deal on the 
combined fees, and of course your agent knows the solicitor very well so 
communications are a bit smoother.

> It seems the only way to lower the interest rate is to have a bigger
> deposit. Now if I could just magic tens of thousands of pounds out of
> thin air...

Probably true - I must admit I didn't look at how the interest rate 
offered was affected by deposit, I assumed it wasn't much (as long as 
you had 5% or 10% or whatever they require).

> (My mum is seriously suggesting that I should take out a credit card and
> put the shortfall on that, just to get the cheaper interest rate on the
> mortgage. Because, you know, *that* won't be expensive at all...)

If you're very close to a round deposit amount that will allow a much 
lower interest rate then it may not be a bad idea, assuming you can find 
a 0% offer for 6 months or something, by which time you could pay it off.

Post a reply to this message

>> 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?
>
> 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.

Once you're out of any special offer or fixed period usually you only 
pay a very minor early repayment charge (like under £100) to pay it off 
completely. If you are moving to a new provider often they will pay that 
fee for you.

Also a lot of mortgages allow you to pay back extra up to a certain 
amount (it's £500/month on mine) without any fees, even during the fixed 
period. It's surprising how just doing that for a few months can take a 
year off the length of the mortgage!

> I had assumed that the value of a property can only go down, never up.

http://www.moneyweek.com/~/media/MoneyWeek/2009/090309/09-03-11-MM2.ashx?w=450&h=362&as=1

> 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.

If you really do believe that then surely *buying* a property rather 
than renting one is a very stupid thing to do?

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>> I bought 30% of a house. I'm going to rent the other 70% of it.
>
> If you're going to rent 70% of the place (ie, you're the landlord), then
> you own it and can change what you like as long as it's to building code
> and whatever local regulations are.

No, I'm renting 70% of it *from* somebody else.

Post a reply to this message

>> Can you actually do that?
>>
>> 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.
>
> Once you're out of any special offer or fixed period usually you only
> pay a very minor early repayment charge (like under £100) to pay it off
> completely. If you are moving to a new provider often they will pay that
> fee for you.
>
> Also a lot of mortgages allow you to pay back extra up to a certain
> amount (it's £500/month on mine) without any fees, even during the fixed
> period. It's surprising how just doing that for a few months can take a
> year off the length of the mortgage!

OK, that's interesting.

>> I had assumed that the value of a property can only go down, never up.
>
>
http://www.moneyweek.com/~/media/MoneyWeek/2009/090309/09-03-11-MM2.ashx?w=450&h=362&as=1

So, prices rising approximately in line with inflation. Except for that 
bit in the middle where prices drastically fell.

Besides, this is the average rate for *all* properties. I'm sure buying 
new properties gradually gets more expensive. What about the ones that 
are already built?

>> 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.
>
> If you really do believe that then surely *buying* a property rather
> than renting one is a very stupid thing to do?

If you rent something, you must pay rent for the rest of your life. If 
you mortgage something, then (hypothetically) you will eventually *own* 
it, and then you don't have to pay any more money.

Sadly, because I've started so late in life, I will never actually pay 
the whole of the mortgage off. And even if I do, I'll still be renting 
the other 70% of the property. But hey, it's all I could afford.

Post a reply to this message

>> According to channel 4, the deal you get from your estate agent is
>> always the worst one. And yet, everywhere I've looked or asked has
>> either offered a far worse rate, or at best the same rate as I've
>> already got.
>
> You mean for the mortgage or the solicitor fees?

For the mortgage itself.

> I've never had the
> estate agent (especially not the one representing the seller of the
> house I'm buying) try to sell me a mortgage, but often estate agents
> have a deal going with local solicitors to get business. If you're
> selling you can sometimes use this to get a really good deal on the
> combined fees, and of course your agent knows the solicitor very well so
> communications are a bit smoother.

My estate agent does seem to be offering drastically cheaper legal fees 
than anything else I've seen.

I'm not sure if that *requires* me to take their mortgage though...

(And "their mortgage" is actually the result of a price comparison 
search. Hypothetically that should mean I'm getting the best possible 
deal - but I'm sure there's actually some markup involved.)

>> (My mum is seriously suggesting that I should take out a credit card and
>> put the shortfall on that, just to get the cheaper interest rate on the
>> mortgage. Because, you know, *that* won't be expensive at all...)
>
> If you're very close to a round deposit amount that will allow a much
> lower interest rate then it may not be a bad idea, assuming you can find
> a 0% offer for 6 months or something, by which time you could pay it off.

It's news to me that you can *get* a 0% loan, but anyway...

Post a reply to this message

> Rental is a different thing, obviously - we own our home, we're not
> renting it.
>
> The arrangement that you've got, are you getting ownership/title in the
> property?  Or are you signing a rental agreement?

I'm not sure precisely how shared ownership works. What I do know is 
that it doesn't make buying a place any simpler...

Post a reply to this message

>>
http://www.moneyweek.com/~/media/MoneyWeek/2009/090309/09-03-11-MM2.ashx?w=450&h=362&as=1
>
> So, prices rising approximately in line with inflation.

No. They've gone up much faster than inflation:

http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

> Besides, this is the average rate for *all* properties. I'm sure buying
> new properties gradually gets more expensive. What about the ones that
> are already built?

Historically they've gone up too. You can go onto something like 
nethouseprices.com and check the sale prices of individual houses 
historically. Or just ask someone who bought a house 20 years ago how 
much it is worth today compared to what they paid for it. My mum's house 
is worth 3x what they paid for it, and the one before that my parents 
sold for 7x what they paid for it.

> If you rent something, you must pay rent for the rest of your life. If
> you mortgage something, then (hypothetically) you will eventually *own*
> it, and then you don't have to pay any more money.

Yes, but by your reasoning you would then own a house with a drastically 
lower value than what you have paid for it. On the other hand if you had 
rented you would be able to save the difference between the rent and 
mortgage, the value of which would go up with inflation rather than 
down. At the end you'd have more than if you sold your "old" house. But 
it doesn't work like that - house prices have historically gone up above 
inflation, even old ones.

> Sadly, because I've started so late in life, I will never actually pay
> the whole of the mortgage off. And even if I do, I'll still be renting
> the other 70% of the property. But hey, it's all I could afford.

You forget that your mortgage is calculated on making the same payment 
every month for X years, but your salary will hopefully go up. At some 
point you'll either want to pay more per month (and reduce the term) or 
take out more mortgage.

Post a reply to this message

>> If you're very close to a round deposit amount that will allow a much
>> lower interest rate then it may not be a bad idea, assuming you can find
>> a 0% offer for 6 months or something, by which time you could pay it off.
>
> It's news to me that you can *get* a 0% loan, but anyway...

Well it works out at around 1% as they charge you a fee to transfer your 
balance into the card (I found 2% fee for 2 years interest free, or 1% 
fee for 1 year). It works because they assume a proportion of people 
won't switch at the end of the period (and then get charged their hefty 
standard rate of 20% or whatever on some huge amount). If you can be 
bothered to research and move around your money every time the offer is 
about to end you can get a pretty good deal long term.

Post a reply to this message

On Fri, 12 Apr 2013 08:31:21 +0100, Orchid Win7 v1 wrote:

>>> I bought 30% of a house. I'm going to rent the other 70% of it.
>>
>> If you're going to rent 70% of the place (ie, you're the landlord),
>> then you own it and can change what you like as long as it's to
>> building code and whatever local regulations are.
> 
> No, I'm renting 70% of it *from* somebody else.

So yeah, you probably can't do anything with that 70%, but if you're 
paying for the 30% to own it, then you should be able to make changes, 
but that's something you'll want to ask the seller (or have your 
solicitor ask the seller).

Jim

Post a reply to this message

On Fri, 12 Apr 2013 08:35:51 +0100, Orchid Win7 v1 wrote:

> If you rent something, you must pay rent for the rest of your life. If
> you mortgage something, then (hypothetically) you will eventually *own*
> it, and then you don't have to pay any more money.

If you rent something, you don't pay for it "the rest of your life", you 
pay for it until you move somewhere else.

> Sadly, because I've started so late in life, I will never actually pay
> the whole of the mortgage off. And even if I do, I'll still be renting
> the other 70% of the property. But hey, it's all I could afford.

Very few people end up paying off their mortgage these days unless they 
refinance it at least once or twice - it does happen, but usually the way 
it works is you end up selling/moving at least once (at least in the US) 
and get a new mortgage.

You're not unique in this situation. :)

Jim

Post a reply to this message

>> So, prices rising approximately in line with inflation.
>
> No. They've gone up much faster than inflation:
>
> http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

Looks like it's approximately following the curve to me (if you 
straighten out the oscillations around it). But then, that's not very 
statistically rigorous.

>> Besides, this is the average rate for *all* properties. I'm sure buying
>> new properties gradually gets more expensive. What about the ones that
>> are already built?
>
> Historically they've gone up too. You can go onto something like
> nethouseprices.com and check the sale prices of individual houses
> historically. Or just ask someone who bought a house 20 years ago how
> much it is worth today compared to what they paid for it. My mum's house
> is worth 3x what they paid for it, and the one before that my parents
> sold for 7x what they paid for it.

Yeah, but you can say that about most things just because of inflation. 
There was a time where you could buy an entire house - even a giant 
mansion - for less than £1,000, because that was a huge sum of money 
back then. ;-)

>> If you rent something, you must pay rent for the rest of your life. If
>> you mortgage something, then (hypothetically) you will eventually *own*
>> it, and then you don't have to pay any more money.
>
> Yes, but by your reasoning you would then own a house with a drastically
> lower value than what you have paid for it.

Yes. And?

> On the other hand if you had
> rented you would be able to save the difference between the rent and
> mortgage, the value of which would go up with inflation rather than
> down.

 From what I've seen, renting is drastically more expensive. If I want 
to borrow £100k, that's £600/month. If I want to rent somewhere, prices 
start at £800/month or so.

>> Sadly, because I've started so late in life, I will never actually pay
>> the whole of the mortgage off. And even if I do, I'll still be renting
>> the other 70% of the property. But hey, it's all I could afford.
>
> You forget that your mortgage is calculated on making the same payment
> every month for X years, but your salary will hopefully go up. At some
> point you'll either want to pay more per month (and reduce the term) or
> take out more mortgage.

You forget that for the last 10 years, my salary has remained almost 
totally static. I'm assuming that's going to continue in the future. 
(This based on the fact that I work for a tiny company, and the 
financial director has made it her mission in life to never spend any 
money on anything, ever, no matter how necessary it is...)

Post a reply to this message

On 12/04/2013 09:15 AM, scott wrote:
>> It's news to me that you can *get* a 0% loan, but anyway...
>
> Well it works out at around 1% as they charge you a fee to transfer your
> balance into the card (I found 2% fee for 2 years interest free, or 1%
> fee for 1 year). It works because they assume a proportion of people
> won't switch at the end of the period (and then get charged their hefty
> standard rate of 20% or whatever on some huge amount). If you can be
> bothered to research and move around your money every time the offer is
> about to end you can get a pretty good deal long term.

Apparently this is what my sister did to purchase her house...

Then again, my sister is a professional London accountant, and a damned 
good one. What can I say?

Post a reply to this message

>> No, I'm renting 70% of it *from* somebody else.
>
> So yeah, you probably can't do anything with that 70%, but if you're
> paying for the 30% to own it, then you should be able to make changes,
> but that's something you'll want to ask the seller (or have your
> solicitor ask the seller).

According to the guy I just spoke to, I can basically do whatever I want 
with the property. The company I'm renting from is just a finance 
company; they don't care what I do with the property so long as I don't 
devalue it.

Post a reply to this message

On Fri, 12 Apr 2013 22:59:05 +0100, Orchid Win7 v1 wrote:

>>> No, I'm renting 70% of it *from* somebody else.
>>
>> So yeah, you probably can't do anything with that 70%, but if you're
>> paying for the 30% to own it, then you should be able to make changes,
>> but that's something you'll want to ask the seller (or have your
>> solicitor ask the seller).
> 
> According to the guy I just spoke to, I can basically do whatever I want
> with the property. The company I'm renting from is just a finance
> company; they don't care what I do with the property so long as I don't
> devalue it.

That sounds like a good deal, then. :)

Jim

Post a reply to this message

On Fri, 12 Apr 2013 22:56:33 +0100, Orchid Win7 v1 wrote:

>  From what I've seen, renting is drastically more expensive. If I want
> to borrow £100k, that's £600/month. If I want to rent somewhere, prices
> start at £800/month or so.

Which, if you think about it, makes sense - the landlord is responsible 
for fixing everything, so the rent has to include something to offset the 
costs of repairs and other work to be done on the property.

If you buy, you're responsible for budgeting for things like that, 
because as the property owner, you're responsible for taking care of them.

Jim

Post a reply to this message

On Fri, 12 Apr 2013 22:57:51 +0100, Orchid Win7 v1 wrote:

> Then again, my sister is a professional London accountant, and a damned
> good one. What can I say?

Ask her for advice? ;)

Jim

Post a reply to this message

>> http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php
>>
>
> Looks like it's approximately following the curve to me

The curve is just the trend-line of the underlying data (the blue bit) - 
the Y axis is inflation-adjusted house prices,  so if house prices only 
went up with inflation the graph would be flat. Who knows what will 
happen over the next 2 or 3 decades though - the main thing is if you 
own a house it doesn't matter too much because it's something most 
people need.

> Yeah, but you can say that about most things just because of inflation.
> There was a time where you could buy an entire house - even a giant
> mansion - for less than £1,000, because that was a huge sum of money
> back then. ;-)

Not as huge as it is today though, that's the point. 40 years ago a 
young couple with decent jobs had an annual salary about what a small 
house costs. Today a young couple with decent jobs are earning about a 
factor of 5 lower than what a small house costs.

>  From what I've seen, renting is drastically more expensive. If I want
> to borrow £100k, that's £600/month. If I want to rent somewhere, prices
> start at £800/month or so.

£800/month to rent a place that costs only £100k seems very steep to me. 
The house I rented for £700/month would have sold for about £180k 
(costing me about £1000/month in mortgage).

If I decided to buy that house rather than continue renting, 20 years 
later I would have saved £350/month (assuming £50/month for repairs and 
maintenance, which is probably an underestimate) then I'd have about 
£120K cash. So it comes down to whether the house is worth more or less 
than £120k, if it's going to be worth more than £120k you're better off 
getting a mortgage - which I think you can almost guarantee it will be. 
Even if you do nothing to the house in 20 years it will surely be worth 
more than that.

> You forget that for the last 10 years, my salary has remained almost
> totally static.

That's not normal though...

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> Not as huge as it is today though, that's the point. 40 years ago a
> young couple with decent jobs had an annual salary about what a small
> house costs. Today a young couple with decent jobs are earning about a
> factor of 5 lower than what a small house costs.

This is what amuses me about the number of new houses being built right 
now. You can build as many houses as you like, but if nobody can afford 
them, what's the point?

>> From what I've seen, renting is drastically more expensive. If I want
>> to borrow £100k, that's £600/month. If I want to rent somewhere, prices
>> start at £800/month or so.
>
> £800/month to rent a place that costs only £100k seems very steep to me.
> The house I rented for £700/month would have sold for about £180k
> (costing me about £1000/month in mortgage).

Why do you think I'm not renting? ;-)

>> You forget that for the last 10 years, my salary has remained almost
>> totally static.
>
> That's not normal though...

It is if you work for a failing company.

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> This is what amuses me about the number of new houses being built right
> now. You can build as many houses as you like, but if nobody can afford
> them, what's the point?

All new-builds I've seen get sold out before they even finish the road, 
it certainly doesn't appear that "nobody can afford them".

>>> You forget that for the last 10 years, my salary has remained almost
>>> totally static.
>>
>> That's not normal though...
>
> It is if you work for a failing company.

People tend to move jobs then and get a pay rise.

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Le 2013-04-12 17:56, Orchid Win7 v1 a écrit :
> (This based on the fact that I work for a tiny company, and the
> financial director has made it her mission in life to never spend any
> money on anything, ever, no matter how necessary it is...)

That's her job.  By definition.

All first line managers, in all companies:  Madly trying to get more 
staff to do what is asked of them.

All second line managers and above, in all companies:  Madly trying to 
reduce costs and get people to do more with less.

Case in point, my employer just published their results for 2012.  They 
made "only" $10G in profits, so for 2013, they need to cut costs even 
more.  My boss is fighting to prevent our 3-days-a-week contractor's 
contract from being cancelled as a cost cutting measure.  Apparently the 
two new customer contracts that were just signed totally close to .8 FTE 
more work for our team of 4 is not enough justification to keep the 
contractor.  If she fails, we'll be down to 3 with 1.4 FTE more work to 
do, and that makes perfect sense to the higher ups.
-- 
/*Francois Labreque*/#local a=x+y;#local b=x+a;#local c=a+b;#macro P(F//
/*    flabreque    */L)polygon{5,F,F+z,L+z,L,F pigment{rgb 9}}#end union
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/*   gmail.com     */}camera{orthographic location<6,1.25,-6>look_at a }

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>> (This based on the fact that I work for a tiny company, and the
>> financial director has made it her mission in life to never spend any
>> money on anything, ever, no matter how necessary it is...)
>
> That's her job.  By definition.

If you're working somewhere where the financial director can't agree to 
spend money on things that are absolutely necessary then it's time to 
move jobs.

> All first line managers, in all companies:  Madly trying to get more
> staff to do what is asked of them.
>
> All second line managers and above, in all companies:  Madly trying to
> reduce costs and get people to do more with less.

I've never heard "reduce costs" mentioned in 2 out of the 3 companies 
I've worked for. The other one is exactly as you say though, and I left. 
IME it comes down to how much profit the company is making, the more 
money they make the less managers of all levels are worried about budget 
and "reducing costs".

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On 15/04/2013 02:52 PM, scott wrote:
>>> (This based on the fact that I work for a tiny company, and the
>>> financial director has made it her mission in life to never spend any
>>> money on anything, ever, no matter how necessary it is...)
>>
>> That's her job. By definition.
>
> If you're working somewhere where the financial director can't agree to
> spend money on things that are absolutely necessary then it's time to
> move jobs.

The idea is to reduce *unnecessary* costs.

There are times when *spending* money can actually result in drastic 
savings. Real managers understand that. People who just run companies as 
a hobby so that they can feel all important and stuff...

Post a reply to this message

> The idea is to reduce *unnecessary* costs.

Things aren't black and white though, it's quite rare a company is 
paying anything significant for absolutely no benefit. How about things 
like pay rises, pension schemes, a receptionist, IT staff, a christmas 
party - necessary?

> There are times when *spending* money can actually result in drastic
> savings. Real managers understand that.

My earlier point was that if a real manager is working for a healthy 
profitable company they are likely to get the money easily to do such 
projects/schemes that benefit the company in the longer term. However in 
a failing company the cash is likely not there to do such schemes, no 
matter how good the manager is. Or rather the manager would need to 
spend a disproportionate amount of time convincing senior management 
that they should get rid of the receptionist and use the money for X 
instead.

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