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NQT - No Mortgage - £70k

Discussion in 'Secondary' started by boat4boat, Apr 9, 2012.

  1. Myself and my partner have been renting a house for a while now and would love to buy our own, but we cannot get a mortgage.
    When do you think our hard earned money will stop going to someone else on rent?
    We don't have a deposit and can see no way out!
    Thanks for any advice
  2. Not sure why you have put this question on a Secondary Teachers' forum but here goes with my pennyworth:
    Personally, I don't think that owning a house should be anyone's 'target ambition'. The British are quite obsessed with owning property while other Europeans are not. We have a distorted view of the advantages of property ownership - there are other equally or more valid ways of getting a good return on your money.
    For some, having a mortgage is like having a millstone around your neck. You have a long term financial commitment (20 to 25 years), your spare cash (deposit) is locked away in the house & you can't get access to it easily without selling the house (and each time you buy or sell there are transaction costs such as solicitors fees, surveyors fees, mortgage valuation fees, land search fees, stamp duty, estate agent fees etc). In addition you are responsible for the maintentance (mending leaks, fixing the roof, replacing the fence, servicing / replacing the boiler etc) and you are more geographically immobile - so if you see a good job somewhere else in the country, you can't easily move to take it up. In addition, if your salary drops you risk being stuck in an unaffordable and stressful situation.
    Personally, I think a better option is to rent property & to put spare cash / savings into investments that are more flexible and can appreciate just as well as they would in a well chosen property. You can move to a better job /area / property with little notice, little cost and no risk that you will be forced to sell at a 'bad point' in the house price cycle.You have no property maintenance costs and can accommodate salary drops or rises into your life more easily. Paying rent is not such a bad option - the yields that Landlords are getting at the moment are low & many tennants are getting a better deal as tennants than they would be as owner-occupiers.
    One reason many of us want to own property is for the 'control' it gives us over our living environment. We can put pictures up, paint walls the colour we like, knock walls down, put a new kitchen in, have chickens in the garden etc etc.
    Check why you want to own property & make sure that it is not just 'because everyone else does' or 'because I think I ought to'. The decision my not be the best one for you!

  3. Just found this site:

  4. katnoodle

    katnoodle New commenter

    I admire people who are happy to rent; in many ways in does give you a lot more freedom. However, like the OP I'm determined to become a homeowner and I'm saving up all my spare cash to afford a deposit. There are several reasons for this, the most important being at the mercy of your landlord for so many aspects of living at the property. We've rented several times, and we've been fortunate to have an absolutely wonderful landlord at a beautiful property who looked after it superbly and was extremely fair on rent and the return of the deposit. Unfortunately there are so many downsides: 1) Most landlords don't give a hoot about what the property looks like. As long as it meets safety regulations (and some of them are even lax on these) they'll avoid paying out any money to improve it like the plague. In our current property I'd rip out the current bathroom like a shot if I could but I have no right to do so as a tenant. Maybe I'm a frustrated interior designer but I can't stand it when things are kept **** when they could be improved no end. So one of the things I hate about renting is having to put up with someone else's standard of "yeah that'll do" when it comes to decorating.
    2) The rent I pay in Surrey is ridiculously high. I know a lot of this is choice of where to live or work, but knowing that I could be paying a much lower monthly payment on a mortgage with the comfort of it actually going somewhere rather than into lazy landlords' pockets, is quite a grind. I have to wait until I can afford a deposit.
    3) If something goes wrong with the property, unless it's an urgent problem, landlords often don't sort it out for ages. Similarly they don't tend to have an interest in making their properties energy-efficient, so I'm lumbered with high energy bills and powerless to do anything about it apart from trying to restrict basic usage.
    4) There are quite a lot of financial products that are only open to homeowners, as if to say that renters are by definition intransigent and untrustworthy.
    To the OP, good luck saving up for a deposit. Fortunately there are an increasing number of low-deposit mortgages available ... unfortunately the stamp duty 'holiday' for first time buyers has come down again, so you'll have to pay it on most properties again.
  5. In my honest opinion? If you can rent for as long as you can and save alongside then buy the house outright at the earliest opportunity. Then move abroad, rent the old house out and get a mortgage in an alternative country.

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