>> 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?

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>> 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.

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