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Are you sure you can pay it back? Have you considered all the costs that will come up with your own house in addition to the mortgage payments?
Electricity, water, taxes, etc.
I don't know what the minimum wage is in the UK but if it's anywhere near my wage I wouldn't dare think about all this.
And a house for 50k? I'm not sure what you'll get on the market for that.
I don't want to completely discourage you, just hope you really thought about this. :bow:
50k muhahaha you can get your very own cardboard box and two daisy's to put on top of it as a garden. Here at least :SWEATDROP:
I don't think there's anything wrong with renting for a while. Cheaper than a mortgage, and it lets you find out what you like.
Edit - Congrats on basically getting a mortgage with nothing but confidence though.
CR
Nothing wrong with renting. Especially when the housing bubble is due to burst in a few years time ...
But congrats nonetheless.
I have no idea what the prizes are in the UK, but you won't find anything decent for 50k.
Also, allthough the law here says banks cannot give you more money than you can pay back with 1/3 of your income, banks here still give people way too big loans which they then have big difficulties with paying back.
Ignore the advice and the offers of your bank, make your own calculations. What's your salary. How much will you spend on basic costs: heating, electricity, food, taxes, clothes, water etc. You'll also want to live a bit, so make sure you have a budget for free time too. And of course, you need to be able to save something each month if you're going to stand on your own feet; to deal with unexpected stuff. You should be able to save at least 10 % of your income each month. Will you need a car (because a car is expensive)? If the answer is yes, you need to save an additional 10 % each month, because cars don't last forever and one day, you'll need to buy a new one. "Oh, but I can get a car loan too", I hear you coming. Sure, but know that the more you buy on credit or with loans, the higher the probability you'll end up miserable for the rest of your life before your 30th birthday.
What's left of your salary after all that, you can spend on paying rent/paying back a mortgage.
I would say... Congratulations!!
Yes, owning is better than renting. Even though renting can be cheaper, it is money down the drain. Paying on a mortgage is paying money to your investment.
At least this is true here in Norway. With the interests being low these days, you can pay more of the actual mortgage reducing future interest peaks.
I did the brave thing of actually building my house at a time it cost 10 times my annual income. It cost 3000k to build but is worth 5000k on today's market.
Congrats on securing the loan and good luck.
Sound advice. :bow:Quote:
Originally Posted by Andres
Not over here... renting here is actually very expensive compared to a mortgage, but just how expensive does depend heavily on the north/south divide. Rhy* is in Scotland if I recall correctly (?), so house prices and rents are generally much lower there than in e.g. the south east of England. I'm not sure what you'll get for fifty grand though...Quote:
Originally Posted by Crazed Rabbit
That is assuming that house prices will not decrease. May be true in Norway, but we have seen housing bubbles burst all over the world. You run the risk of being trapped in negative equity if you bought on a high market and the bubble bursts. Because then you are paying money down the drain, and you can't get out.Quote:
Originally Posted by Sigurd
There are some forecasts out there that suggest house prices could decrease in the UK in the foreseeable future. Of course it won't be an even development. I would suggest to OP he does some research to assess the risks associated with getting a mortgage, especially for the consequences if the housing market does not develop nicely.
Buying a house now, at this moment, as a short term investment (i.e. you plan to sell it with profit within less than 5 to 10 years) is indeed not the brightest idea.
As a long term investment (think 15 to 20 years), I don't think you'll lose. If you don't have to sell, then your loss caused by a housing market going down will only be virtual. It's always best to be in a relatively stable and secure financial position before you make such a big investment, but now even more so. Right now, you need to avoid being in a position that has the risk that you may have to sell in the near future.
Rhyfelwyr, you probably won't like this, but I think you should listen to your parents. If I were you, I'd wait a bit longer before buying. Save as much as you can, perhaps get a better job or a significant raise and then buy. Buying real estate while you just started to work and are on minimum wage seems too risky to me, certainly in the current economic climate.
In 2008/2009, I've seen plenty of young people who were forced to sell their houses during that period. I still remember a young couple, they had gotten a mortgage at 125 % of the prize of the house they bought (personally, I think it's scandalous that banks gave/still give people more money than the house costs; it should be capped at 80 % of the prize; the rest should be paid with your own money; 125 % is a perfect recipe for putting people in deep misery). He lost his job and his welfare + her salary weren't even enough to pay the monthly amount to the bank. Their house was sold (forced) at half the prize they bought it. They'll be in poverty for many years to come, with no house and a gigantic debt to the bank.
Well good luck buying your own property with £50K. Did a quick search and it turns out you can actually buy apartments over here for that kind of money: €49K for 90m², in the middle of nowhere (Paterswolde)...
Condos can be quite nice. He is single afterall. All you have to do is keep the inside of the house, the rest is done for you. At least over here (and as far as I know).
Congrats.
Nothing wrong with renting and getting a room mate to split the bills. Sure, it isn't the same as going it alone but its fun to do whilst you're still young. As soon as you get the mortgage that's it, the world swallows you up.
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Well, I think it is a sound investment, considering that the rent marked is pressed as the high prices indicate.
If you get a job which means you need to move to another part of the country don't sell... rent it out. The rent will pay your mortgage and then some.
The market will fluctuate and there will be a dip in the prices or interest will go up. When the real estate prices dip - buyers will grow and the prices raise again. The renting marked will grow when the interests raise. If you have the means, it is always good to own something.
The most sound advice when it comes to real estate is to build something new. If you build something that costs 300k (£), no matter what the marked says, you will at minimum get 350k for it if you need to sell. An appraiser will look at all the documents (bills, drawings etc.) and give it an appraisal above the cost of building it. This is not the same as asking price in a sales document. The asking price will be higher.
Unless you find yourself on Iceland and the **** just hit the fan and nobody can buy anything. You still have the option to lease it out.
That's only true if you take matters into your own hands and don't rely entirely on some contractor who'll rip you off. Finding all professionals you need yourself is of course a huge investment of time and energy. If you can do some stuff yourself (my father did the central heating and all electricity in his house himself and my both grandfathers did all the carpenting), all the better.Quote:
Originally Posted by Sigurd
In Belgium, there's also the fact that you pay 21 % VAT on a new house whereas on acquiring an existing property, you pay 10 % registration rights (in Flanders; 5 % if it's a "modest" house); if it's your first acquisition or if you sell your current house and buy another one, you get additional benefits. You do get better tax benefits for a newly built house. If you sell your new house within a short timeframe (2 years after it's officially finished), you can recuperate the VAT you payed yourself, if you sell later however, you can no longer get your VAT back; so you'll have to wait a bit if you want to make some profit.
:yes:Quote:
Originally Posted by Sigurd
Don't sell if you're not going to make profit. That's why it's important to be in a good secure and stable position before you buy. Reduce the risk of finding yourself in a situation that you have to sell as much as you can. Get that professional job before buying; the job market is not looking good and won't get much better any time soon. I wouldn't take for granted that some high degrees are a guarantee of getting a well paying job. Many of those who have to work for a living, face or will face difficult times.
They say you have to build three times before getting it right. I did it once and I am quite happy with my property.Quote:
Originally Posted by Andres
The VAT, is that in addition to the VAT you pay the contractors and building materials? If so, we don't have that here. Every bill from contractors etc.. does come with a VAT charge, which you of course add to the appraisal value. We do have something called document fee, which is a stupid tax of 2,5% of the property value. This is just to register the property to your person and getting the deed of your property. I have already paid the government a handling fee when I got the approval to build the house.
Yeah... when you build you need to shop around. Give the blueprints to several contractors and never go for the cheapest or steepest. And it helps having someone you know in the business check the bids and checking in on builders from time to time. It is a hassle as the process goes on, but so much rewarding when you realize you just made a "profit" of 2 million (NoK) when it is done. This profit is only realized when you are able to sell at the estimated price. But the banks use this new value when evaluating your equity for other loans. I am now good for 5 mill with an existing mortgage of 2.4 mill. I now have a 3.5 mill line of credit with my bank which mean I can take out or pay into the loan whatever I want as long as I pay my interest (on the sum I have used) on a monthly basis. Today with an interest of around 3% I am able to pay all my interests with the rent I get from an apartment I own and that I am leasing out.
So you see Ryf... this could just be the start of something that will ensure a comfortable future. And when you meet that special girl, make sure she is able to get an education if she hasn't got one already.