Buying A House: C or D?

I have 2 houses *smug grin*, but no money :0( First one was my first ever wee fixer upper flat, that I now rent out to various weirdos and misfits.

The 2nd is the one I just bought off the bastard ex for a HUGE amount of money that I can't really afford - but it's MINE all MINE mwah ha ha...and I LOVE living on my OWN in MY house! It's the best feeling....I've just moved back in, so I still think everything is fab...the bubble will burst very soon methinks...

i am not a fan of white kitchens and bathrooms but at the time i was so tired of renovating that I was just shouting JUST MAKE EVERYTHING WHITE!!! because i could not deal with color schemes and tiles anymore and white appliances are the cheapest and renovating takes 3 times as long as you think it will. when those pics were taken probably 6 months after moving in we still did not have a kitchen trashcan and the vaccuum was always out. IKEA was so helpful. We splurged on things that mattered like faucets and sinks and our custom stainless steel counter, but otherwise we just went to ikea for standard white cabinets and like, the toilet paper holder. I would never get seating there though.

anybody see the documentary about estate agents on bbc last night?
http://news.bbc.co.uk/1/hi/magazine/4826444.stm

This seems as good a place as any to ask a question about mortgages...

Me & the missus are about four months away from the end of our fixed-rate term on our repayment mortgage; we want to bundle all our unsecured debts on the new mortgage, cut up those credit cards (possibly only symbolically in my case - y'never know when I might pass a branch of Jessops with a Sigma 30/1.4 going cheap in the window), wipe out those overdrafts and live sensibly within our means like nonidiots for a bit.

Called our vendor today (a lovely Scottish woman named after an Orchids song) and, after she'd done her sums, she said we'd be unlikely to make their affordability criteria for the necessary loan amount (since we last applied Pam has gone self-employed and our joint income is much lower). However, if we got an interest-only version of the same product, the deal was back on (I guess the monthly payments are £100-£150 less or so).

Now, thanks to a little loophole that she probably wasn't supposed to tell me about, we could switch back to a repayment mortgage later cos they're only duty-bound to do affordability assessments when the loan amount changes, not when the product-type changes.

Does this sound like a good plan? As far as I know, the mortgage vendor doesn't have to see any proof that you've taken steps to cover the capital when setting up an interest-only mortgage, do they? I mean, they don't care - they're getting shedloads of interest off you PLUS they get the house at the end of the loan period into the bargain if you've failed to make adequate provision. So it should be straightforward.

There's also the interim possibility of an Additional Loan - a secured loan at a higher rate that's very quick to set up and isn't as picky in its acceptance criteria - to wipe out the debts, that could be bundled with the new mortgage product (at the mortgage rate) when we switch in the new year.

I'm entering the club and discovering a whole new world of paranoia about dodgy roofs and walls...

Buying a house: dud. Having a mortgage: dud. Owning a house: classic!

Living in Australia off the back of the Howard era: DUD DUD BIG FUCKING DUD. We both work and we can't afford a cardboard box in the country.

anyone have experience buying a home in pre-foreclosure?

I have friends who are fundamentally against this concept and cited 'house of sand and fog' (which I have neither read nor watched) as an example of why this is 'mean' but frankly, fuck that. the bank is going to take it anyway. and people in my own family have lost homes to foreclosure themselves.

UK people, is it worth buying the freehold on my flat?

My upstairs neighbour has been talking to the owner of the building about it, however, we all have to agree before we can do it.

Obviously it will increase the value of the property (as if that means anything in the current climate) - but what kind of control/liabilities does it give us as leaseholders turned freeholders?

Apart from escaping service charges - does that outweight the lump sum that I'd have to come with up front?

What is the length of your lease?

You won't escape all service charges as you will still have to buy buildings insurance between you and it would be wise to keep a contingency fund going for future repairs, exterior painting and the like. Generally how it works is that you and your neighbour set up a company that buys the freehold and the share of the company gets sold along with the flat and I think you can write that into the deeds. This is very ordinary stuff for solicitors. The company then charges you a service charge which then goes for buildings insurance, contingency fund, cleaning of the common parts (Which you don't have) and you generally set out how this is to be calculated in the articles of the company, again bread and butter stuff for a solicitor.

Might be a good time to do it as you will get it cheap and be able to lower your outgoings on service charge a bit. Not sure about the affect on price but a share of a freehold is more attractive and might make it easier to sell at some future point.

Depends on sooooo many things, and with all due respect to ilx peeps you might want to take legal advice on the leaseholder/freeholder aspect. Why does the owner want to do this now I wonder?

Basically what Ed said.

It's not the owner's idea, it's the upstairs neighbour's idea. I believe it is quite cheap, as far as buying freeholds go - if I had steady employment right now, I probably would scrape together the cash and do it.

However, there's not much point in buying the freehold if I can't pay the mortgage 2 months from now when my contract runs out!

I guess I have to go and have tea with my neighbour and talk about it.

Yeah, at least that way you'll get a cup of tea out of the deal...

Just closed. Landed gentry, y'all.

congrats!

I am in the middle of replacing most of an exterior wall in one of the bedrooms. dryrot laid waste to siding, framing, sill, trim, and even a bit of the joists and footing. oh the joys etc, at least I can do most of it myself.

Congratulations, (assuming here you did your due diligence).

Just remember that a house is a place to live, not an investment instrument. Don't get caught up in the fallacy of spending more than you can afford, thinking you'll recoup when you sell because "it will increase the resale value!" There are several millions of people today who found this out in the most painful way possible.

Congrats. Just had a list of stuff that needs fixing from our tenants :( (mostly minor stuff but most of which means cooperation from our clueless neighbours...)

Wow, talk about bringing a man down.

Congrats I say, I'm currently on my third year of home ownership and finally to the point of really loving it! We had to replace tons of shit in the first few years - garage, AC, furnace, water heater - but now that its mostly little upkeep and yardwork, I'm totally enjoying it. Good luck!

No bringing down intended! I loved having my own place from the minute we moved in, even though it was a total fixer-upper - no central heating, broken windows, dodgy wiring, acres of woodchip on the walls.... Eventually saved enough to blitz everything and it's a palace now. Just a shame I'm not living there, but w/ev, it's great to know we've got some bricks and mortar we can call our own.

owning a house is awesome. even when its shitty and stuff breaks, its yer shit which makes fixing it feel like a worthwhile endeavor.

ezackly

owning a house is pretty rad. not paying rent PWNS. Mortgages are feh, but, not having to chase dodgy landlords and beg for plumbing fitting replacements is k-awesome. and I say all of this despite being in the middle of a) trying get foundation repaired on a 97 year old house, and b) discovering a swarm of termites in the same week. Oh, old house, I love you like my crazy grandmother. You are so old you are almost beyond most people's comprehension of how to fix you, but so strange and lovely and dear to our hearts that we love you anyway.

sigh.

getting ready to help buy a house. 1940. so so excited. inspection happens soon, am really looking forward to what he uncovers

or, y'know, dreading

so do you people who pay mortgages (in the US) have way less withheld in your taxes every month from your paycheck? I'm trying to figure out if I can afford to do this.

Our mortgage is only $100 more than what we paid in rent at the time we decided to buy, so no.

Finally moving into our house this weekend that we bought in December (yay remodelling). Wish me luck. I still can't believe I'm doing this.

classic, even tho my home's value is slipping back down toward our 2004 purchase price. C'est la vie.

Yeah, we were unfortunate enough to have bought at the end of 2007, so our house has dropped about 16% in value from what we paid. :(

But we also built a new garage and have put tons of work into it, new windows are up next when I get finally get a full-time gig.

ours doubled in value within a year after we bought it. then it began a long, sharp slide down.

to be clear, i have no regrets. in fact, i love our house and our neighborhood. i plan to hold it for a long time, and i'm don't rely on it as an investment, so whatever value it has today is okay.

I'm stressing out because it seems like such a good time to buy, but it seems like such an ordeal!

It's a total ordeal, but it is also totally worth it if you really love the place you purchase.

I am looking out my window right now at the sun shining on a small tree in my yard. Yesterday, while looking out the very same window at the same tree, my wife and I saw a Wilson's Warbler, a small yellow bird much like a goldfinch, flitting around the branches. The birds love our yard.

Yeah, owning a house can be totally worth it.

I had a stretch where I really hated our current house, but last year when I found out how well it can take an oak tree through the roof, I fell in love with it a little.

so do you people who pay mortgages (in the US) have way less withheld in your taxes every month from your paycheck? I'm trying to figure out if I can afford to do this.

The part of the payment that's interest (most of the whole) is deductable from your income for the purposes of figuring your tax. So determine that amount, then determine what your final tax rate (percentage after all deductions) was last year, take that percentage of the monthly interest, then figure how many deductions to add to cover that amount (there's probably a worksheet in the tax booklet that does this last bit).

thanks, that's what I assumed and was looking for. I suppose i could go see a mortgage broker and get this really clarified.

I'm looking at purchasing a bank-owned house. we're going to look at it tomorrow. as far as I can tell the worst thing about this now is that, since there is no seller aside from a bank, there is no-one to fix anything before you buy it, so you have to make sure your inspection is thorough. we know someone who's realtor told them doing this was 'a pain in the ass' but I have a feeling that's because the realtor wasn't going to make any money finding them an REO. anyway, wish me luck, I will probably want to kill myself if I do this. but since I fully expect to be in bankruptcy one year from now, I'd better buy a house while I can.

uk people, is now a good time to think about buying a house? (so so sick of giving money to a useless and intrusive letting agency)

also how easy is it for a couple to get a mortgage when one person lives on topsy turvy freelance wage? could a set of parents step in as guarantor or does it not work like that?

It's worth taking a few weekends to look at as many places as you can, just to get a feel of what's out there. You'll also find it easier to spot a 'bargain' if you see one as well (eg a mate of mine was lucky getting her house because the owner had died and the next of kin wanted a quick sale rather than have the process drag on). Not saying this will happen of course but it's good to be ready if you see somewhere worthwhile.

Parents can act as guarantor - I was in a similar situation, only on a fixed-term contract which the financial advisor said could be difficult. Looked into getting a parent to act as guarantor but at the time the guarantor had to have an income of £30k minimum which I think mine didn't quite reach. After a lot of fussing over my fixed-term contract (and me considering quitting just to go get a permanent job at Tescos or something) it all worked out ok and the mortgage co didn't seem to care - I imagine it would be different today though.

I'd recommend finding a non-shysty (free) financial advisor who can give you an idea of the ins and outs, but they won't always be able to recommend you the best actual mortgage. The bigger deposit you can get together, the better choice you'll have of mortgages too iirc.

It's a total ordeal, but it is also totally worth it if you really love the place you purchase.

so so so so otm. and 2 weeks after the ordeal of closing & moving all the hassle is a distant memory.

Everything that NtrVP said. Mrs A and I completed on purchase last month, having seen our old house (bought in 2005) go up a good deal in value and down a fair bit too; we love the area of Manchester we're in and looked at more than 20 houses within a mile radius of the old gaff before finding one we both agreed on - in the end it was sheer luck as it was just going onto the agent's books and they told us about it when we were looking at another house. The things I learnt this time round:

1) Plenty of people still think their house is worth what it was in 2007 so be prepared to make offers that you might think are "cheeky" and to walk away if the vendors won't see sense. If they are serious about selling they'll come back to you.

2)We scraped together a 15% deposit from the remaining equity in our last house, but would have been f'cked otherwise. I think the mortgage deals have improved a little since then though, but DEF. throw as much as you can into the pot if it will get you a better rate.

3)The house we bought is in an area which we'd dismissed initially, simply because we didn't know it too well (despite it being a stone's throw from the old place). Get out and pound the pavements and walk around your target areas, otherwise you'll never get a real feel for them.

4)Get all your finances and mortgage agreement-in-principle in place asap. This will ensure you know exactly what you *can* afford and also shows agents that you are in a good position for them to recommend them to their clients.

5)It goes against my natural instincts, but make a real nuisance of yrselves on the phone to local agents and get to know who their main selling people are - once you know them by name you can steal a march on other potential buyers.

On a final note, I rented for years and know exactly what you mean about being sick of it. Imo there is not much to beat the feeling of getting home from work and closing the door of your own house, even if it needs decorating and renovation from top to bottom. Good luck!