Its a Terrible World out there for a FTB
Ani and I have come to a point in life where we've become fed up of living in a crappy little house that normally only students would consider. Though we've got other financial obligations like paying back my student loan, there are two big reasons for walking down the scary path of a First Time Buyer(FTB). The first is that we're just plain embarrassed to invite anyone over. The second is that we feel that we're throwing away money on rent and lining the landlord's wallet. Though the average FTB in this country is around 30+ years old, the earlier you climb onto the property ladder, the easier it is in the long run.
The first step was to find out how much the house we live in would cost if the landlord sold it and it turns out that our place is worth £115,000. I was shocked that it was on the upper end of the "No Stamp duty" cut off mark of £120,000. That's just plain outrageous. I went on to a couple of mortgage online calculators and based on our joint income we can only borrow around £112,000. They've got some bizarre rule that if you borrow on the basis of joint incomes, the total amount you can borrow has a smaller multiplication factor than if you borrow on the basis of a single income. How does that make sense? And even that amount we can borrow has a higher monthly mortgage repayment than what we are paying in rent. So that would mean an end to any dream of having a holiday or building some sort of savings. What would happen if one of us lost our job or had to take time off for some reason. We'd be screwed. The myriad types of mortgages available( variable rate, discoutned variable rate, fixed rate, capped rate, tracker rate, cashback, flexible, etc) also is so confusing and its difficult to make a choice without the constant fear of losing money. Then you have the other parasites that leech off the system like the solicitors, surveyors etc who charge ridiculous fees for each house that you are interested in. So the question is, should I lower my expectations and desires to live in a decent house? Should I resign to the fact that until our current salaries get doubled, we have to resort to living in a crappy house?
So the other option is to continue renting but rent a nicer place. So we looked around in the ads and arranged to view two houses yesterday. The first one was located outside Lancaster in Forton. It was located in a tiny small little picturesque village with views of the country. However, as soon as I entered that cottage, I felt like I stepped into a hobbit's house. The roof was so low that if I stood on my toes, I'd hit the ceiling. The bathroom just had a shower and the toilet was in a separate room. The so called study was a glorified cupboard space. The garden outside the house didn't belong to it, but belonged to another neighboring house. Its garden was somewhere down the road. Bizarre. The owner tried to sweet talk us into it, but we politely told him that we'd think about it and call him back. Phew. Though it was cheaper than our current place, No Way. The next apartment that we viewed was in the other extreme of the spectrum. City centre, posh building with video intercom, fancy lobby, the works. The flat itself was really awesome with a massive living room with wooden floors, bathrooms with heated floors, two nice bedrooms and everything was so chic and cool. We instantly fell in love with it and was quite happy with the higher rent.This was a place that we'd be proud to call our own. But then the landlord started listing the hidden costs such as maintenance, parking space etc and that completely put us off. £800 for parking for a year? Is he havin' a laugh?
I've booked a few more viewings this week. But I still have this voice in the back of my head telling me not to throw away money on rent. The thing is, we don't know how much longer we will be here in Lancaster. I may work for my company till the end of next year. Is it worth buying a house for that short period of time? Or should we get a foot on the first rung of the property ladder and hold on for dear life?
The first step was to find out how much the house we live in would cost if the landlord sold it and it turns out that our place is worth £115,000. I was shocked that it was on the upper end of the "No Stamp duty" cut off mark of £120,000. That's just plain outrageous. I went on to a couple of mortgage online calculators and based on our joint income we can only borrow around £112,000. They've got some bizarre rule that if you borrow on the basis of joint incomes, the total amount you can borrow has a smaller multiplication factor than if you borrow on the basis of a single income. How does that make sense? And even that amount we can borrow has a higher monthly mortgage repayment than what we are paying in rent. So that would mean an end to any dream of having a holiday or building some sort of savings. What would happen if one of us lost our job or had to take time off for some reason. We'd be screwed. The myriad types of mortgages available( variable rate, discoutned variable rate, fixed rate, capped rate, tracker rate, cashback, flexible, etc) also is so confusing and its difficult to make a choice without the constant fear of losing money. Then you have the other parasites that leech off the system like the solicitors, surveyors etc who charge ridiculous fees for each house that you are interested in. So the question is, should I lower my expectations and desires to live in a decent house? Should I resign to the fact that until our current salaries get doubled, we have to resort to living in a crappy house?
So the other option is to continue renting but rent a nicer place. So we looked around in the ads and arranged to view two houses yesterday. The first one was located outside Lancaster in Forton. It was located in a tiny small little picturesque village with views of the country. However, as soon as I entered that cottage, I felt like I stepped into a hobbit's house. The roof was so low that if I stood on my toes, I'd hit the ceiling. The bathroom just had a shower and the toilet was in a separate room. The so called study was a glorified cupboard space. The garden outside the house didn't belong to it, but belonged to another neighboring house. Its garden was somewhere down the road. Bizarre. The owner tried to sweet talk us into it, but we politely told him that we'd think about it and call him back. Phew. Though it was cheaper than our current place, No Way. The next apartment that we viewed was in the other extreme of the spectrum. City centre, posh building with video intercom, fancy lobby, the works. The flat itself was really awesome with a massive living room with wooden floors, bathrooms with heated floors, two nice bedrooms and everything was so chic and cool. We instantly fell in love with it and was quite happy with the higher rent.This was a place that we'd be proud to call our own. But then the landlord started listing the hidden costs such as maintenance, parking space etc and that completely put us off. £800 for parking for a year? Is he havin' a laugh?
I've booked a few more viewings this week. But I still have this voice in the back of my head telling me not to throw away money on rent. The thing is, we don't know how much longer we will be here in Lancaster. I may work for my company till the end of next year. Is it worth buying a house for that short period of time? Or should we get a foot on the first rung of the property ladder and hold on for dear life?
posted by TinTin @ 2:15 pm
1 Comments:
damn man! it's almost scary, these grown-up issues and stuff!
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