Advice on house hunting Page 221

  • Binary01 31 Jul 2018 18:30:31 33 posts
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    About to start the long arduous job of getting a mortage sorted, finding a solicitor etc...

    I am uing the help to buy scheme and was wondering if anyone has any tips to try and help with smoothing things along?
  • Technoishmatt 1 Aug 2018 18:05:43 2,730 posts
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    Sorry, am also just starting process of buying a house, although I am still in figuring out what I can afford phase, and where do I want to live.

    What's up though with the short term fixed mortgages. Here in the US you get mortgages with a fixed rate for the entire duration. E.g. from my credit union I can get a 30 year mortgage, with an average rate of 4.6% - it does go up the starting lower rate of 3% after a couple years, but there is none of this variable crap, so no risk of it going up to 10%). In the UK the longest fixed rate I can see is 10 years, from building societies, and the variable rate is already currently over 5%.

    And then, also. wtf stamp duty! That could take a chunk of change in London. It's basically a London tax, bastards.

    I was thinking of looking for our "forever home" already, but at the price we would have to pay in London, besides the higher monthly payments which we could probably handle (but with less flexibility to move to e.g. 4 days a week), the stamp duty charge would be huge. Near enough my UK gross annual salary, I reckon.

    Might need to follow others as suggested here and go for something good enough that will last a few years, pay off a chunk of that mortgage, and then trade up (or move out of London - for a laugh we picked a random city in Scotland to see what we would get for the same money, and the first hit that came up had TWENTY-TWO BEDROOMS).
  • disusedgenius 1 Aug 2018 18:17:11 9,296 posts
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    TLDR: We do short terms because it lets us exploit our dumb housing market where things just increase in value on their own


    Yeah, shorter term fixed mortgages are pretty normal with the expectation that you'll just jump to another one once your term is complete. Generally there's a penalty for early repayment while you're on a fixed rate, but once that's over you're free to pay it off at your own will (read: either transfer it to a new deal or sell the property).

    For example my first mortgage was a 2 year fixed term of a 30 year mortgage. I got that one as I was starting off and it had the smallest rates. Fast forward two years I went onto a 2 year fixed 14 year mortgage, which was much more viable as I'd had a pay rise and the value of my property had gone up meaning my loan to value was lower.

    Now I'm moving I'm taking all the profit from selling my old flat and my loan to value is even smaller. But as it's (hopefully!) a nicer place I'm going for a 5 year fixed rate to get over the Brexit hump and I don't need the flexibility of wanting to check whether I want to use every 2 years.
  • Mr_Sleep 1 Aug 2018 18:23:54 21,882 posts
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    If you are looking at London you should check out http://commutefrom.co.uk
  • quadfather 1 Aug 2018 18:34:44 32,293 posts
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    What do you do if your emersion heater has a weep on top of the electrical connection but is ok when you power it on? Worth getting a sparky to check yes?
  • monkehhh 1 Aug 2018 20:03:28 4,918 posts
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    @quadfather electric + water = bad idea usually?
  • fontgeeksogood 1 Aug 2018 20:07:20 1,654 posts
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    I'm sure it'll be fine but just simply wear rubber soled shoes from now on in and around your Taliban cave
  • quadfather 2 Aug 2018 07:36:30 32,293 posts
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    monkehhh wrote:
    @quadfather electric + water = bad idea usually?
    It's an emersion heater - that's how they're made. Ala electric shower. Need to get it checked out I think
  • quadfather 2 Aug 2018 07:36:44 32,293 posts
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    fontgeeksogood wrote:
    I'm sure it'll be fine but just simply wear rubber soled shoes from now on in and around your Taliban cave
    :D
  • monkehhh 2 Aug 2018 08:33:04 4,918 posts
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    @quadfather if it's weeping, get it checked (solid life advice).
  • quadfather 2 Aug 2018 09:07:10 32,293 posts
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    @monkehhh

    :D

    It seems fine - it just looks like it's had a weep in the past. It's totally dry - just has some markings around the redring assembly. I can turn the power on to it and it's fine - It's just that as I don't know the history of what's been done, I need to get it checked for a once over
  • Carlo 2 Aug 2018 09:36:49 20,283 posts
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    https://www.bbc.co.uk/news/business-45034372

    (Interest rates set to rise today)
  • IJ 2 Aug 2018 13:40:05 940 posts
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    @Technoishmatt

    Here’s a good article on why the UK doesn’t have super long fixed mortgages.

    https://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10594494/Why-Britons-cant-have-40-year-fixed-rate-mortgages.html


    They are more expensive. The 25y uk yield curve is about 1.8% currently, 1% more than base. So if you were to do this, you’re paying over twice as much interest than you have to.

    In theory of course you’ll break even over the 25 years. But imagine you’d taken this out in 2007. You’d have lost £10s of thousands in overpaying interest.

    So it’s not a no brainer. You are basically gambling on the market. But paying over the odds for stability is worth it for those who might be on the edge and can only just afford repayments and no more.

    My wife and I are comfortable and we priced our mortgage so we can take many % rate rises. So it’s much more cost effective to do short term fixed bonus periods and renew. But even this in itself is a gamble on rates not increasing beyond what the 25y yield curve is predicting.
  • Technoishmatt 2 Aug 2018 16:12:12 2,730 posts
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    sure - you overpay if interests rates stay low or even similar, but you have taken the risk they go up by a lot.

    I am feeling a bit more comfortable at the moment not to commit all our cash to a larger deposit and to take a smaller mortgage size on which we could easily take an increase of several multiples in a few years. Interest element would currently be much below what we have paid in rent in previous years.

    This being our first purchase we have a lot to learn! I am instinctively a bit risk averse, which would almost manifest in just trying to buy outright! or at least going for a really small mortgage (eg 100k).
  • Psychotext 2 Aug 2018 16:25:10 63,528 posts
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    New flooring people turned up. I was right... the site manager must have told the old flooring people to just get it done (I was away so couldn't check), without sorting out the levelling. When we pulled up the tiles you could see the original pen marks (which indicated where it needed to be levelled) that should have been covered with screed.
  • the_milkybar_kid 2 Aug 2018 16:28:40 7,306 posts
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    What a dickhead. As if you wouldn't check.
  • Psychotext 2 Aug 2018 16:35:49 63,528 posts
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    I guess he was assuming that without the levelling it would be "good enough". Wrong.

    So they've obviously done the same thing under the washing machine... and they can take up all that too.
  • Psychotext 2 Aug 2018 16:42:10 63,528 posts
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    ...ecause I have no floor in my kitchen I just had to resort to straining my pasta in the downstairs toilet sink.

    Yay, home ownership.
  • Vortex808 2 Aug 2018 16:46:42 12,504 posts
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    :)

    When we moved in to our 1970's-fest, we had to do the dishes in the downstairs bathroom sink or the bath upstairs while the kitchen was being re-done.

    Don't worry, we've all been there!
  • fontgeeksogood 2 Aug 2018 17:24:44 1,654 posts
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    PT, all these problems with your home, you should have bought a brand new one from someone like Barratt. Here's what they say about why you should:

    We work longer hours than ever and few of us are willing to spend our evenings painting, stripping wallpaper and renovating a 'doer-upper'. DIY is also expensive and whilst you could add the cost of building work to your mortgage it is likely to incur extra fees and take up even more of your time. If done incorrectly, you can also end up incurring significant expense to rectify problems. In fact, in Britain we spend an average of £3200 rectifying botched DIY jobs, with an additional £4000 to complete the job in the first place.
  • Load_2.0 2 Aug 2018 17:26:59 27,283 posts
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    Pasta before 5pm?

    Outrageous.
  • mrpon 2 Aug 2018 17:27:50 34,548 posts
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    Pfft, come back when you've washed the dishes whilst you're having a shower PT!
  • elstoof 2 Aug 2018 17:29:28 20,785 posts
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    Cold shower to boot
  • Psychotext 2 Aug 2018 17:31:15 63,528 posts
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    fontgeeksogood wrote:
    PT, all these problems with your home, you should have bought a brand new one from someone like Barratt. Here's what they say about why you should:

    We work longer hours than ever and few of us are willing to spend our evenings painting, stripping wallpaper and renovating a 'doer-upper'. DIY is also expensive and whilst you could add the cost of building work to your mortgage it is likely to incur extra fees and take up even more of your time. If done incorrectly, you can also end up incurring significant expense to rectify problems. In fact, in Britain we spend an average of £3200 rectifying botched DIY jobs, with an additional £4000 to complete the job in the first place.
    Cuuuuuuuunts.

    Load_2.0 wrote:
    Pasta before 5pm?

    Outrageous.
    That's my breakfast (16:8 intermittent fasting)...

    Next comes 2 hours on the turbo trainer. :(

    Edited by Psychotext at 17:33:46 02-08-2018
  • Carlo 2 Aug 2018 18:20:12 20,283 posts
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    So how much more is everyone's mortgages going to be with this .25% increase?
  • fontgeeksogood 2 Aug 2018 18:21:12 1,654 posts
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    If you didn't eat the toilet pasta you wouldn't need 2 hours on the turbo
  • Technoishmatt 2 Aug 2018 18:48:30 2,730 posts
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    I’d hope people move to fixed rates asap, with the impending massive increase in rates!
  • Psychotext 2 Aug 2018 19:26:29 63,528 posts
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    I'm two year fixed, and I'm really hoping there's not too many increases before I can get another mortgage.

    Oh... and the plasterer doing the wall upstairs said it was done when he's only bothered to straighten a fifth of the wall. I mean, did he think I wouldn't pay any attention to the rest of it or something?
  • fontgeeksogood 2 Aug 2018 19:38:50 1,654 posts
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    God knows, he probably saw you straining pasta in the bog, if that's not the act of a wholly together and observant snagging pro I don't know what is
  • IJ 2 Aug 2018 19:40:16 940 posts
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    Fixing rates doesn’t save you money if rates rise. Fixed rates price in the current yield curve, which is the markets currently expected change in rates over the next 100 years. If you fix you only save money if rates rise more quickly than the market is currently pricing. If you fix and they rise more slowly you lose money.

    If you’d fixed in 2007 you’d have lost out big time.

    If you look at Japan, their rates have been below 1% for over 20 years and are currently negative. Historically, we’re due a recession any time now! So who knows, rates could stay below 1% for another decade, particularly if brixit is a cluster fuck.

    That’s not to say fixing is bad, at all, but I wouldn’t rush out to fix 5 or 10 years thinking it’s a no brainer.
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