Reply to: Getting a mortgage - FTB

[jaleach]

Its perfectly possibly. My monthly outgoings have never been more than 1/2 of my monthly post tax income. And I throw far more than I need to into the vat / corporate tax pot.

As for buying a house don't rush. the last thing you want is for the estate to end up half finished or being the only owner occupier in an estate full of housing benefit tenants. Rent, wait a while and buy when you have more cash.

Aye - the estate is on it's third phase of development, it's been going for four years and I've rented a flat there for nearly three now. There's a hospital, bar/cafe and a Hilton, so it's not going to dive anytime soon.

My outgoings aren't particularly heavy - they haven't actually changed since being a permi. I have the spreadsheet from SJD and have been careful not to distribute much of the 'maximum dividend' - no coke/hookers for me, no no. I'll just stick with not splashing out on things until next year and then see how much I can put down on a place.

Cheers guys.

[eek]

You have a few months bench money from only 6 months contract??? Are you sure you are not just talking about the amount in the bank. Remember CT and VAT have to come out and your warchest is profit! Not the number that is in your bank?

I am sure I saw an article talking about .25% interest coming with a return to 0.5% not before 2015. These predections are guesswork at best but I can't find the article again to link..

From BBC News - House prices: Will they fall or rise in 2012?



Dunno where you live but if the max predictions are £20k down on a £200000 you could be making money by continuing to rent at the moment

Who bloody knows what will really happen though. If someone said the UK will go bust in 2012 I wouldn't take it too flippantly right now.

Its perfectly possibly. My monthly outgoings have never been more than 1/2 of my monthly post tax income. And I throw far more than I need to into the vat / corporate tax pot.

As for buying a house don't rush. the last thing you want is for the estate to end up half finished or being the only owner occupier in an estate full of housing benefit tenants. Rent, wait a while and buy when you have more cash.

[northernladuk]

Cheers NLUK - I thought that'd be the case but it's always good to ask around a bit :-) Warchest isn't substantial but there's a few months bench-safety in there now.

You have a few months bench money from only 6 months contract??? Are you sure you are not just talking about the amount in the bank. Remember CT and VAT have to come out and your warchest is profit! Not the number that is in your bank?

I am sure I saw an article talking about .25% interest coming with a return to 0.5% not before 2015. These predections are guesswork at best but I can't find the article again to link..

From BBC News - House prices: Will they fall or rise in 2012?

Ray Boulger - down 4%
Bernard Clarke - "a broadly flat market"
Jonathan Davis - down 10%
Martin Ellis - "unchanged plus or minus 2%"
Robert Gardner - "flat to modestly lower"
Henry Pryor - down 10%
Simon Rubinsohn - down 3%
Ed Stansfield - down 5%

Dunno where you live but if the max predictions are £20k down on a £200000 you could be making money by continuing to rent at the moment

Who bloody knows what will really happen though. If someone said the UK will go bust in 2012 I wouldn't take it too flippantly right now.

[jaleach]

Personally I wouldn't commit with only one contract under my belt. I would like to know I am cut out before commiting. I would also want a substantial war chest backing me up as well which I am assuming you don't.

I would advise option 1 and sit there grinning from ear to ear as property prices continue to fall and concentrate on being financially stable in the meantime.

Cheers NLUK - I thought that'd be the case but it's always good to ask around a bit :-) Warchest isn't substantial but there's a few months bench-safety in there now.

[northernladuk]

Personally I wouldn't commit with only one contract under my belt. I would like to know I am cut out before commiting. I would also want a substantial war chest backing me up as well which I am assuming you don't.

I would advise option 1 and sit there grinning from ear to ear as property prices continue to fall and concentrate on being financially stable in the meantime.

[jaleach]

Hi Guys (& Girls)

I thought I'd revive this thread as I wanted to get some consensus on buying a house.. I've been renting a 1-bed flat for nearly three years now and it's time to get something a bit bigger so I can at least have a separate office and perhaps a garden. So I'm up to the decision of whether to buy soon or keep renting until I have a larger deposit.

Here's the situ: I've been contracting for 6-months now. By the time December comes round I should have enough for a small deposit but I can see a few choices here:
1- Hold off until next summer - I'll have plenty of cash deposit behind me plus extra to cover furniture, fees etc etc. Benefit to this is lower LTV so hopefully a good rate, plus I'll have been contracting for over a year.
2- Look at buying something now with a smaller deposit. The development where I live is still growing and they're currently putting up some new 2/3 bed houses which I like the look of. I like the area and location so would be keen to buy here anyway.

Balancing - I hate the idea of continuing to pay someone else's mortgage off with option 1, so the question is, would it be better to buy something now and at least get on the ladder, overpay mortgage payments when I can and start to build up equity, perhaps remortgaging in a year or two.. OR.. suck it up for another 12-months of paying rent and then buy with the large deposit and lower mortgage rate.

Cheers in advance :-)

[Bexter]

Out of interest does anyone know how they calculate how much you can borrow? I understand they base it on your day rate and annualise it. But then what do the multiply that by? I always thought it was about 3 times annual salary, but seems sometimes it's 4, 5 or even 6? Or are those days gone now?

[ChimpMaster]

Of course it is!! There are more than enough people needing to sell desperately so will take discounts that will more than cover any further decline in the price. Mortgages are cheap and not going to go up just yet. Rents going through the roof.

We have hit the bottom.. Fill your boots!!!!

It is certainly a good time to buy and will be a good time to buy for a couple of years yet while the cogs wind up again for the next push upwards.

[Wanderer]

Do seriously consider offset options.

WHS. My offset has had some massive ups and downs over the years. Best thing I ever did. Go for fully flexible not one of these stupid arrangements when you can over pay by 10% or something dumb like that. I've had my mortgage vary between completely paid off and maxed out at different stages....

[bobhope]

I thought real contractors bought houses with cash anyway?

[oversteer]

ContractorMoney were very efficient on the phone and you will basically be limited only by your deposit in terms of the house value you want. Only thing is with a 10% deposit I could only get a rate at about 6%. 15% led to 4.5% and 20% lead to 3.99% so if you can wait and save, it's probably worth doing so.

[PAH]

So you'd buy the house through your Ltd?

Normally I'd say no as you are then liable for CGT when it is sold.

However in times of depreciating property maybe it would be a smart move as you could offset any losses against tax, alongside the usual mortgage interest and maintenance/insurance expenses.

[northernladuk]

However it's rarely to see a good property on sell because of lowest interest rate and government subsidy.

Eh??? Google translate please.

[xing]

However it's rarely to see a good property on sell because of lowest interest rate and government subsidy.

Of course it is!! There are more than enough people needing to sell desperately so will take discounts that will more than cover any further decline in the price. Mortgages are cheap and not going to go up just yet. Rents going through the roof.

We have hit the bottom.. Fill your boots!!!!

[northernladuk]

So are we saying it's a good idea to buy property at the moment?

Of course it is!! There are more than enough people needing to sell desperately so will take discounts that will more than cover any further decline in the price. Mortgages are cheap and not going to go up just yet. Rents going through the roof.

We have hit the bottom.. Fill your boots!!!!