Mortgage/Valuation issue

toshj · 13 Jul 2010 at 18:17

haha. i've never learnt anything by shouting at people.

i'm not too worried about my own financial situation with regards to this purchase - even if interest rates four fold i'd still be paying less than i am for the place i'm currently renting - i'm just going to need to make sure my mate's mum will cover him if it all falls apart.

a perfect situation (for me) would see the vendor dropping his expectations and letting us take it for the amount it was valued at, but I don't think that's too likely. if all goes well i'll post the photos of the place, so you can tell me how much of an idiot i've been! on a side note, it does have a table tennis table!

toshj · 13 Jul 2010 at 18:18

britboy4321 said:
£540,000 for a flat? Must be in the centre or an SW postcode or something ..

Plan B:

Hampton is a bloody nice area and about 27 minutes from the centre by train (after a 10 minute walk).

Screw your flat, get this instead and spend 27 minutes reading the metro each day.

http://www.rightmove.co.uk/property-for-sale/property-26462407.html

spent 23 years in hampton, the plan is to not go back too soon!

footman · 13 Jul 2010 at 18:44

toshj said:
spent 23 years in hampton, the plan is to not go back too soon!

promise?

Glaucus · 13 Jul 2010 at 18:46

OldCoals said:
Isn't it just a prime example of how the banks ended up in a mess?

No, the bank mess had nothing to do with Uk mortgages.

However 450 a month on 18k, is a hell of a lot, then bills ontop.

toshj · 13 Jul 2010 at 18:55

AcidHell2 said:
No, the bank mess had nothing to do with Uk mortgages.

However 450 a month on 18k, is a hell of a lot, then bills ontop.

my mate is on £18,000, and thats £450 including bills - i just want confirmation from his mum that she'll cover him should he fail to pay. my salary is somewhat different. when i first rented a few years ago, I was on £17,500 and was paying £450 to live in a dive in fulham, so my mate should be able to cover himself quite comfortably.

footman - i'm never coming home!

Glaucus · 13 Jul 2010 at 18:58

I would see a solicitor and get some real agreement drawn up.

I assume and this is guess work, that mortgage is a bit like renting on a a single contract, they don't care who pays and doesn't. They will chase both of you for the money.

toshj · 13 Jul 2010 at 19:00

AcidHell2 said:
I would see a solicitor and get some real agreement drawn up.

I assume and this is guess work, that mortgage is a bit like renting on a a single contract, they don't care who pays and doesn't. They will chase both of you for the money.

the agreement is currently being drawn up by a solicitor, but your point on who pay's is correct. it'll come out of one bank account, so we're both liable

clv101 · 13 Jul 2010 at 19:02

Rotty said:
is it just me that finds this whole idea utterly ridiculous ?

Absolutely - it's gotta be a wind up, no one's daft enough to go through with the OP's plan!

Rich_L · 13 Jul 2010 at 19:02

Not really in London though - the young professional demographic working in London is somewhat different to elsewhere in the country - for a start there is absolutely no need to have a car which AFAIK is often the second highest commitment after mortgage/rent for most people - your transport costs are fixed at £100 a month with no unexpected repair bills, no car tax, no petrol or insurance required etc. Also he has no family commitments either.

Plus, it is a flat-share and not living singly, so fixed bills like council tax, broadband, cable TV etc are all divided by a third - so his monthly outgoings will break down roughly as

Rent - £450
House Bills - £100
Transport - £100
Personal Bills - £100 (deliberately high, say mobile phone + gym membership)

Outgoing - £750, Income - £1,200 leaves £450 a month purely disposable income to spend on food and entertainment - £100 a week is plenty really.

That said, if interest rates rise then he's royally screwed

toshj · 13 Jul 2010 at 19:06

Rich_L said:
Not really in London though - the young professional demographic working in London is somewhat different to elsewhere in the country - for a start there is absolutely no need to have a car which AFAIK is often the second highest commitment after mortgage/rent for most people - your transport costs are fixed at £100 a month with no unexpected repair bills, no insurance required etc. Also he has no family commitments either.

Plus, it is a flat-share and not living singly, so fixed bills like council tax, broadband, cable TV etc are all divided by a third - so his monthly outgoings will break down roughly as

Rent - £450
House Bills - £100
Transport - £100
Personal Bills - £100 (deliberately high, say mobile phone + gym membership)

Outgoing - £750, Income - £1,200 leaves £450 a month purely disposable income to spend on food and entertainment - £100 a week is plenty really.

That said, if interest rates rise then he's royally screwed

that's pretty much the plan. my friend has no car, cycles to work and is incredibly conservative when spending money - never spent more than £100 in one go - plus he's got savings. all he has is £20 phone bill, so you can add an extra £180 onto his disposable income. Also, by the end of the two years fixed, he'll be on about £25,000.

i walk to work and my company takes care of the phone bills, etc.

Paul11 · 13 Jul 2010 at 19:08

Rich_L said:
That said, if interest rates rise then he's royally screwed

well, if you cant manage if the rates rise, then its a bad move

Danthus · 13 Jul 2010 at 19:09

AcidHell2 said:
No, the bank mess had nothing to do with Uk mortgages.

However 450 a month on 18k, is a hell of a lot, then bills ontop.

I should have said a prime example of what is wrong with the banks, irresponsible lending.

Glaucus · 13 Jul 2010 at 19:12

OldCoals said:
I should have said a prime example of what is wrong with the banks, irresponsible lending.

seeing as repossession rates stayed low through the crisis (although they did rise) I don't see what basis you have to say irresponsible lending. Something the media has blown all out of proportion.

However it does keep house prices artificially high and that's not a great thing.

Rich_L · 13 Jul 2010 at 19:15

Well it was irresponsible lending that led to the crisis, just not here it was pretty much all in the US

Paul11 said:
well, if you cant manage if the rates rise, then its a bad move

Absolutely, I suppose I was talking in the context of rental rates more than mortgages in terms of affordability

Glaucus · 13 Jul 2010 at 19:15

Rich_L said:
Well it was irresponsible lending that led to the crisis, just not here it was pretty much all in the US

Not by our banks either, they just purchased bad debts.

Danthus · 13 Jul 2010 at 19:17

AcidHell2 said:
seeing as repossession rates stayed low through the crisis (although they did rise) I don't see what basis you have to say irresponsible lending. Something the media has blown all out of proportion.

However it does keep house prices artificially high and that's not a great thing.

Not to mention the current interest rate, which is only ever going to increase.

Rich_L · 13 Jul 2010 at 19:18

AcidHell2 said:
Not by our banks either, they just purchased bad debts.

Indeed, irresponsible purchasing if you will.

horseunderwater · 14 Jul 2010 at 04:12

have you though what you do will when your friend wants to move out ?

Tefal · 14 Jul 2010 at 05:04

Rich_L said:
Indeed, irresponsible purchasing if you will.

Wasn't that because the regulators/advisor's (i forget their proper name) that asses the debts when they're sold started changing from conservatively assessing them (ie in buyers favour, being sceptical about quality etc) but after new government regulations came in it became much better to mark them favourably for the seller and give them much better rating than they used to get?

So the buyers believed they where much better buys than they really where.

^that is just a vague collection of rememberings from news articles etc.

cableguy2003 · 14 Jul 2010 at 09:22

Not wishing to state the obvious here, but you do realise that you will owe 540k on an interest only mortgage. That means with payments of £900 per month over your 2 year fixed term you will pay 22k out in "rent" and at the end of those two year you will STILL owe 540k. Why dont you just rent somewhere, or buy somewhere you can afford ?

You keep talking about how you can afford this, if you have to pay interest only and have no plan to pay the mortgage off with a savings plan then you most definately cant afford it and you WILL get shafted further down the line.