Costs of moving out. Morgage vs Rental, ect;

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BoomAM

BoomAM

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Hi.
Ive been working out how much i'll be earning come the next financial year, and in light of what ive found, im looking at the possibility of moving out.

So ive got a few questions.
Some apply to both rental and morgage. Some apply to both.

Rental vs Morgage.
Thoughts?
Rental would be easyier, in theory, but a Morgage is a more long term option and isnt really wasting money away.

Other costs on top of monthy payment for house/flat (not nessessarily house costs, but still outgoings to take into account):
Council tax
Internet
TV Licence
House Insurance
Electricity
Gas
Water
Food
Mobile contract
Car Petrol
Possible car repair costs.


Thoughts, musings, advice and whatnot would be much appriciated. :)

Thanks in advance all. :).
 
imo renting (in general) is a waste of money. Paying off a mortgage means one day the house is yours, and you then have no more payments to make:)

Renting can be good for certain situations though, but in general I would say mortgage is better than renting.
 
If I were you, I would rent for your first year. Here is why:

1) You are young, not much is certain (presumably).
2) The economy (and possibly) your income is not guaranteed.
3) Houses will be cheaper in a year.
4) Mortgages will be cheaper in a year.

Rent, build up some savings, spend a year watching the market.
 
Indeed, buying at the moment is a little crazy imo. Renting certainly is not a waste of money if your losing money hand over fist in deprecation.

How secure is your job? Unemployment in a rental while a PITA is preferable to it happening with a massive mortgage hanging over you, and if you happen to be in negative equity whcih is quite possible in the current climate you can find yourself in world of pain....
 
Bigsy said:
and if you happen to be in negative equity whcih is quite possible in the current climate you can find yourself in world of pain....
Click to expand...

Providen you can afford the mortgage payments, then the value of the house is irrelivent til you come to sell it.
 
I'll say it comes down to if you are really prepared to make the commitment of buying a house and can afford to as well. But as has already been said, i would wait til the housing market stabilises a bit before buying a house thus making renting a good move for now.
 
mglover070588 said:
imo renting (in general) is a waste of money. Paying off a mortgage means one day the house is yours, and you then have no more payments to make:)
Click to expand...

This advice is generally wrong.

What people forget: Say a mortgage payment is £700 a month (£120k, 25yrs, 5%). Of that £700, £500 is interest so you are only actually only repaying £200.

You say renting is a waste of money, well what do you call the £500 interest paid to the bank each month!!

The situation often exists these days where the rent can be less than the interest would be. So you can rent that same house for maybe £450 a month and from your £700 budget save £250 a month. With the mortgage you are only saving/paying off £200 a month. Also note that when renting you are not responsible to carpets, central heating, the roof, buildings insurance, windows, decoration etc etc...

When you can rent (and save the balance) for less than the interest would be on a mortgage the concept of "renting is wasted money" simply does not apply.
 
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if you want to move out, I would definitely rent for at least 6 months. Just so you can figure out how much everything is and decide what you want in a property. Also nothings certain. But I'm expecting house prices to fall a lot this year.

I have some proper figures at home for renting. I'll post them in a few days when I'm back.
 
clv101 said:
When you can rent (and save the balance) for less than the interest would be on a mortgage the concept of "renting is wasted money" simply does not apply.
Click to expand...

1) as long as you do actually save it
2) if renting is cheaper, however in many areas mortgage is cheaper or the same as rent. Certainly seems to be in bristol Bristol.
3) you have to take house price inflation into account.
 
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clv101 said:
This advice is generally wrong.

What people forget: Say a mortgage payment is £700 a month (£120k, 25yrs, 5%). Of that £700, £500 is interest so you are only actually only repaying £200.

You say renting is a waste of money, well what do you call the £500 interest paid to the bank each month!!

The situation often exists these days where the rent can be less than the interest would be. So you can rent that same house for maybe £450 a month and from your £700 budget save £250 a month. With the mortgage you are only saving/paying off £200 a month. Also note that when renting you are not responsible for the maintenence of the property i.e. boiler, roof etc

When you can rent (and save the balance) for less than the interest would be on a mortgage the concept of "renting is wasted money" simply does not apply.
Click to expand...


Edited, but a fair point, not quite as cut and dry as that as you could get a 20 year mortgage and more cash would be put into the house, or a 15 year one etc.
 
So the general concencus is rental. Fine. Lets move onto the next bit....other costs:

- Council tax
- Internet - Dependant on package - Monthly cost
- TV Licence - £140 - Yearly
- House Insurance - £Unknown - Monthly or Yearly
- Electricity
- Gas
- Water
- Food
- Mobile contract - £40ish - monthly - £40 a month.
- Car Petrol - £40ish - weekly - £160 a month.
- Possible car repair costs - Unknown variable.

Can anyone help with rough estimates for some of them, and/or add anything else to that list?
 
Well in my eyes a good 10% deposit would be the minimum, and Im going for between that and as close to 25% as possible before buying. Well giving myself a max of 3yrs to get that together.

Renting might be dead money, but what else is there, living at home until 25-30, not possible. Im moving out of London in the new year after 1 yr there living with my Mrs. Nothing wrong with us, just the inability to have any decent life and save, so moving back in with our parents for 6months to start with to get some cash together and decide what to do. I will be commuting from Bedford, and although the trainfair is high, it still saves me a good £300pm compared to renting in SW London around Tooting.

Get a good deposit together then go for a house in a year or 2.
 
Based on 1 person, 3 bedroom end of terrace worth £160k ish

Council Tax - £110 per month.
Buildings and Contents Insurance £22 per month
Water - £36 per month
Food - £150

Can't remember how much gas/electricity I use!

You will also need line rental for home telephone, TV (Sky/Virgin), Life Assurance (for mortgage)
 
For us here :

Electricity £30
Oil (Heating) £80
Lotto £10
Window Cleaner £6
Phone & Internet £55
Car Insurance £30
Diesel £35
Maintenance & Road Tax £70
Rates £80
TV Licence £12
Life and Crit Illness £25
Buildings & Contents £15
Food & Drink £200

Also have a mortgage, saving, pension - all totalling more than £500.
No Mobile contract, no water bill, no Sky TV, no Credit cards, no other subscriptions or unecessary stuff.
 
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You need at least 20% deposit at the moment. 25% more like it. I know, we've just made an offer on s 230k house.

We've been renting for years, and been the laughing stock of many 'homeowner' who were rambling and are now in negative equity, while we were saving like crazy. Now we're on the hunt to buy, because 1) the market is low 2) it's still possible to get a mortgage 3) we've got a massive deposit that doesn't make much interest anyway.

So, renting /is/ a good idea, it always was.
 
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