Living Costs

[anzo]

Ahoy there.

Basically a few months ago a mate of mine suggested we rent a house together, I liked the idea, seems cool n all that shit. Now its been mentioned again, and I want to look into it. However, the whole 'renting thing' is bullshit to me, I'd much rather have a mortgage as you actually have the house to yourself and no arsehole of a landlord checking the house for damage everyday (which probably will happen with two 19 year olds together).

Although mortages are f**king scary stuff, too much legal work involved and I could seriously end up in the shit...although, I have to move out of my parents house at some point, right? So....suppose I better face the music really.

Now then, Just wondering who here has a mortgage and how much it's costing them, generally, to live to a reasonable standard, if I move in with him we'll be looking at about £500 a week in combined wages, to cover food, bills, furniture and all the shit that goes with it.

I'm pretty clueless as to how it all happens with regards moving in, getting the mortgage ect. So any guidance will be lurrrrrvely.

[Fuse]

I've only got a few minutes, so my reply will be brief. I might add some more later if nobody else posts anything useful though!

If you type in "mortgage calculator" into Google you should get some sites popping up that will allow you to roughly work out how much a mortgage will cost you per month. Bear in mind these are only rough guides though, and the real calculation is going to be based on a whole heap of factors. Also bear in mind that those costs are just the mortgage repayments, there'll be other one off costs like solicitors fees and the like that certainly aren't insignificant.

Don't forget costs like electricity/gas/water bills, food, council tax, tv licences, etc. too, as these usually always add up to more than you originally estimate!

[guineasmithpig]

main things to consider are that renting will cost more per month than the mortgage repayments on the same house. however, all maintenance should be covered, at no extra cost to yourself, which in my case stacks up to a lot! in our student house so far, we've had the double glazing, power shower, door and window locks, and fridge freezer all replaced in the last 5 months. now imagin all that crap going wrong if you could only just scrape together the mortgage repayments. also, rent payments tend to be a bit more flexible if you're short (ie, if your injuredand can't work or something).

however, when renting, you have no equity against loans and crap, and also no way of recovering money you've spent as you would when selling your house, giving you chance to buy cheaper and make a profit. you also are constrained to what you can do to the house as far as decorating, modifying and what you do there with renting. common problems are pets, tinkering with cars, and keeping bikes indoors and stuff. they also tend to rip you off for damage to a rented property also.

there's plenty of other stuff as well, though these are the main things me and the missus are thinking about as we are moving in together over summer.

also try speaking to an independent financial adviser! Luckily I have a friend who is one, but there help and advice is often invaluable. predictions about house prices, wheres best to live, companies offering deposit free mortgages and first time buyer specials. all stuff everyday folk don't get to hear about! and make sure they aren't tied into certain companies commission and stuff. INDEPENDENT is the key word!

best of luck

smithy

[Fuse]

main things to consider are that renting will cost more per month than the mortgage repayments on the same house.

I know I said I didn't have much time, but it seems I've got a few more minutes

Renting isn't necessarily cheaper, and in fact I would argue the opposite. The place I'm in at the moment costs £575 a month to rent. I'd estimate that the property is probably worth around £130k. Based on a 30 year repayment period and an interest rate of 6%, that would give mortgage repayments of something like £750 per month, which is significantly more than it's costing in rent!

Edited January 11, 2007 by Fuse

[OD404]

I'm in a similar situation right now. Girlfriend and I are currently renting a place and have done since the summer, but I have considered the possibility of buying a house. Now I know a lot of people will come on here and spote the old "renting is pants because its wasted money etc" and yes to an extent it is true. However, when you buy a house you really need a decent amount of capital behind you as fees quickly stack up. Add to that a deposit, which in my mind is a good idea as it can make the mortgage more managable, and you have a very large outlay. For many people that is just too much, certainly for myself coming out of uni with nothing but debt there was no way I could have afforded that.

Best places for advice would be your bank and a local estate agent, while they may not have the best deals on mortgages for you or the house you want, they will be able to explain exactly how the process goes and then you will be in a better position to make a decision.

Other than that there is very little advice I feel I can give. House prices/rent varies considerably accross the country as do people's living habits which will affect bills etc

Though I don't want to post a complete breakdown of my living costs, I can tell you that between us my girlfriend and I are spending just under £400 a month to live where we are (good sized 3bed terrace with private parking and garage in Coventry) and that includes rent, council tax, gas, electric, water, tv license and food. That might give you an idea of the costs involved but as I said, it could be so different for where you are.

Hope that has given you a bit of info to start with, but I would certainly recommend popping into your bank and a local estate agents

EDIT: That's just under £400 each

[guineasmithpig]

i guess it depends where you're living then. me n the missus were looking at 1 bedroom flats in oxford area/s, and they're around £900 per month. we got a mortgage quote of £125k (which is ridiculously high considering i'll be a student only adding £300 a month to the house income! again, the joys of knowing a financial advisor) though thats still strugglin to find us anywhere. Oxford is ridiculously expensive. 1 bed flats start around £150k!!! hopefully we can get a better mortgage if she lands a job with the Faststream course, as the quote was based on her earning £16k, and the Faststream jobs are a bit higher paid.

smithy

[RicH_87]

i agree 100% on it being more sensible to be paying your own mortgage every month rather than someone else's, but unless your mate is like, seriously close, i wouldn't want to be buying a house with just a friend...

[anzo]

i agree 100% on it being more sensible to be paying your own mortgage every month rather than someone else's, but unless your mate is like, seriously close, i wouldn't want to be buying a house with just a friend...

Yea, seriously close. I'll ask him about renting to be honest, mortgage is way to much of a commitment to it, and who knows where I'll be and what I want to do in 2 years time, let alone 10...and I'm sure its the same for him too. Plus with a mortgage, theres nothing 'legally bonding' (no, we're not queer) so if something were to happen to me, or him, either of use would be in deep, deep shit with a £100k mortgage to pay off.

I think renting is more the sensible approach at the minute, if all goes will, theres nothing to stop us buying another house.

I actually can't believe how gay all this sounds...

Many, many thanks for your help guys

[RicH_87]

Yea, seriously close. I'll ask him about renting to be honest, mortgage is way to much of a commitment to it, and who knows where I'll be and what I want to do in 2 years time, let alone 10...and I'm sure its the same for him too. Plus with a mortgage, theres nothing 'legally bonding' (no, we're not queer) so if something were to happen to me, or him, either of use would be in deep, deep shit with a £100k mortgage to pay off.

I think renting is more the sensible approach at the minute, if all goes will, theres nothing to stop us buying another house.

I actually can't believe how gay all this sounds...

Many, many thanks for your help guys

hah naa it doesn't sound gay, but yeh i was getting at the massive commitment side. for example unless you have been friends since you were like 1, then who's to say you won't fall out or whatever, and one can just leg it leaving the other as you say, in the shit.

plus what would happen if one of you wanted to settle down with a girl and wanted to sell up to get their share of the house, but the other wanted to stay there.

renting in the longterm (3 years or more imo) is just pissing money away, but to move in with a mate or little group of people just to get started out on your own it's a lot easier.

like my older brother rented for years after uni, but his g/f left him and he couldn't afford the place anymore, but no biggie really as he could just leave, no strings attached and find somewhere else/get a mortgage.

[OD404]

renting in the longterm (3 years or more imo) is just pissing money away

Though a mortgage can be the same. The assumption is that when you buy a house, it will increase in value, which will cover the costs when it was bought, however in some cases house prices don't rise nearly enough (if at all) to do this. Also consider that the trend nowadays is to stay in the same house for on average 5 years before moving, so the money you have tied up in one house will go towards your new house, but you will have more fees to pay, which you may or may not get back through the value of the new house.

While I agree that in the long term mortgages are the better option, a sweeping statement like that is a little narrow-minded as there are more factors to consider than simply "paying someone elses mortgage". Which is why I am renting right now, as I cannot financially justify buying a house. If anything, tieing myself into a mortgage right now could possibly cripple me later in life.

[poopipe]

renting in the longterm (3 years or more imo) is just pissing money away,

thats debatable. both me and the missus are on good wages but to buy a decent sized house between us in cambridge we'd need to borrow 4-5 times our combined salary - we'd be looking at in excess of £1200 a month in repayments to cover an interest only mortgage. the rent on this place is £800 so we figure we get a better quality of life by renting and saving half the difference towards reducing the initial mortgage when we do buy.

of course in other bits of the country you don't have to pay£280k for a 3 bedroom semi so the same reasoning might not be appropriate

Edited January 11, 2007 by poopipe

[Fish-Finger-er]

i agree 100% on it being more sensible to be paying your own mortgage every month rather than someone else's, but unless your mate is like, seriously close, i wouldn't want to be buying a house with just a friend...

you not see the beauty of this situation for anzo, anzo buys a house/flat on mortgage after raising/nicking off ur parents a small deposit, he pays the mortgage, his mate pays the correct value of rent for his share of the house. your mate gets what he wants( a house with anzo(crazy fool), and the knowledge that there aint gunna be a landlord kicking round,and the fact no ones gunna shout if hes £32.41 short one month) anzo gets his house, and a cheap(er) mortgage.

[Gavyn.]

if you were to find somewhere where the value of the house was rising rapidly then you could buy and when you sell, get back all your money but you'd need a pretty flexible mortgage for that