Serious question time chaps
Wifey and I are looking to move to a bigger house and we've seen the one we want. It's a new build and we are hopeful of getting a decent deal.
We are planning to Part Exchange as its a lot less hassle and trying to sell now is pretty tough. I appreciate we will get shafted on the valuation but I am happy with that if we get a similar reduction on the new house
Our mortgage is likely to go up to around £1500 a month I believe and this is serviceable (provided I don't lose my job - I am fairly secure I think but then who knows!!)
I was just wondering if anyone out there is "in the know" and could give me their opinion on whether I am a nutter to buy a house at the moment
Thanks in advance
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You might be surprised with the selling bit. Depends on where you are. But deffo get a few local agents in to give you their price then at least you got a bargaining tool withthe Part ex if you go down that route.
We can afford it without him but I really would like to make things easier
I take it onboard that new build is not too preferable for you guys but the development is almost finished now and it's a really nice development (Bocking Mill in Braintree). It will be so nice to have a blank canvas to work with and to make our own. Our current house is 130 years old and as much as I love it I hate decorating because I always seem to uncover something (ie spare room had 8 layers of wallpaper on it)
The way I see it - lots of people make money in times of great hardship and I see this as a good chance to move up the property ladder. It's a 4 bed house so we can grow into it too and I don't envisage moving any time soon.
I'm excited but also nervous......I worry I am too impulsive and I need to make sure we do whats right for my wife and daughter
I can't imagine mortgage rates will ever again be much lower than they are at the moment - and the only way is up, in future.
If the bank rate increases substantially in say a year or two's time, it could easily add another £500 pm to the cost of your repayments ...... just think how suddenly rates have dropped in the past 6 months, could you cope if they went back to previous levels and perhaps even higher?
That's exactly what happened at the end of the 80's and early 90's.
Near the Feynes very nice.
The key with buying now is to be able to "nail the seller to the wall" ie, if they have to move they'll accept a low offer.
Also, mortgage wise- rates are good with 40% equity, ok with 25% and the less said ( currently) about loans with less than 25% the better so, if you haven't already, look at the whole of the market, don't just go back to your existing lender.
Agreed working with a lot of big house builders there is still further falling in valuation to come IMO. There are some good deals out there at the moment but i feel in another 8 months with the loans these builders have they will be desperate to get the market going meaning good times if you have cash on the hip.
Stanny, would you agree mortgage rates are probably rock bottom at the moment - or is there scope to go a little lower?
I feel that once this low bank rate period is over, mortgage rates will rise substantially again.
History indicates that they probably will.
Amused by your 'bank of Dad' comment. I promised to buy my son and daughter-in-law a flat in London for their wedding present last August and we're only just progressing it. Glad we delayed because needless to say, we're getting a much better deal than we would have done six months ago. I'm not certain it's the greatest time to take out a big mortgage, though.
Good luck if you go for it!
The synic inside me would say that the banks and government owned banks will want to recover the debt some how the only way i can see that happening is if all of a sudden interest rates rocketed and the general public get stung again.
What the market needs is for lenders to start to compete for business and then the products on offer, ie- fixed rates and tracker margins may ( hopefully) should fall....
Mind you- i'm a mortgage broker, not an economist or clairvoyant....
That repayment was based on a 5.9% mortgage - we still have 7 or 8 months to run on a really good rate mortgage and we can port that across.
I know we will get our valued at "fire sale" prices but my wife and I agree on the maximum price differential between old and new.
The new house is up for £290k (was £329k last year)
Ours we won't accept less that £150k
I am planning to say we don't want more than a £100k differential so if we only get £150 we want to pay no more than £250k
That's our startpoint and we'll go from there.
I guess I am in a strange & lucky position that I know when my father is no longer alive I will be pretty well off so I guess that tends to become a factor in my impulsive decisions and that's why I feel ok taking a risk like this where some might baulk at the thought
And it's from the desperate seller that you can get that bargain price.
Whether developers will offer you such bargains at the moment, I've no idea.
Good time to buy?
Probably - but even if prices fall lower, any time is a good time to buy if you own that house long enough - and don't sell.
As your Dad and others of his generation will no doubt tell you.
Regardless of what Estate Agents and the media tell you, a house is only worth what somebody is prepared to pay for it.
Admittedly we have not put an offer in on a private sale house but that seems to be the impression I am seeing
So that can be good enough reason to go ahead, especially if you see that house as your long term family home.
The bargain purchase tends to be had if you are not fussed about a particular property.
You could even put an advert in the local paper saying "Wanted, 3-bed house, garage, garden, recent construction, Max price £175,000, etc".
You may be amazed at the response you get, and the choice of properties that would normally fetch a much higher value.
The cheapest place to get a house now is at auction, absolutely wonderful bargains to be had but not for the faint hearted and you would really need to take advice if you were to go down that route.
If buying new build my suggestion would be to negotiate hard, homes are just not selling and housebuilders are desperate for cash back therefore you are in the driving seat and can i would have thought (although i have no direct experience) be able to push them down quite a bit from whatever asking price they start on.
As for your mortgage, if you can get a fixed rate then i would go for that, once inflation starts to take off at the end of this year Base Rate will be forced rapidly upwards IMO and if your mortgage is only just affordable now you dont want that happening in a short space of time...you could always use 'bank of dad' to give you a larger deposit to put down, hence qualifying for the 60% deals that you read about being so much better at the moment, then agree to pay your dad interest on what he lends, after all if he puts his money in a bank at the moment he would not get better than say 3% and that would be taxed, so if you paid him 3% all in it would be of benefit to both of you potentially...
I am certainly no expert, but they are my thoughts.
Selling now BAD
Buying now GOOD
;-)
Thats the way I see it - we do not HAVE to move right now - so if they can't meet fit in with out needs then we will walk away - at the end of the day they want to sell it to me so they need to be receptive to our needs.
If you don't mind me asking - what kind of price were you looking to pay and what was list price? and what was their final take it or leave it price?
You've have to talk to the Sales Director and play real hard ball, but nothing ventured, nothing gained.
Good mate at work is engaged to PA for the Sales director for the region at Barratts - they do the same house style on the development so I am trying to get an idea for the minimum they would sell for - then can use that as a starting point for our battle