On £25k but 'poor'?! Misery thread...
Discussion
Craikeybaby said:
I don't think that really helps the OP much, the point of this thread is to get the OP into a better position.
OP - have you worked out short/mid/long term plans with your girlfriend?
Not as yet, I'm going to wait until we have had this meeting to see whether we need to rule out buying our own house or make it a realistic 'target'. We want to have another child, before our daughter gets much older as we don't want there to be a big age gap. If that means sacrificing a home of our own then so be it, I know there are lot of spectators to this thread that find it difficult to comprehend, this is often because they don't have a family or a desire to start one though!OP - have you worked out short/mid/long term plans with your girlfriend?
will-w said:
I'm in pretty much the same position as the OP, it's a pretty rough place to be and gives me all kinds of nightmares trying to work out what to do next.
We currently pay £800 a month rent for a small-ish 2 bed semi. Flats in the immediate area are £700-£800 so we got it quite cheap.
It would be more expensive to buy (mortgage around £1,000) but I'd rather do that than waste money on rent. However, there is no way we could afford the deposit to buy. Our neighbour has just put their house (which is identical to ours) for £295,000. Take stamp duty into account, legal fees and a 5% deposit - that's £20,000.
There are however advantages of renting with a young family. If our boiler breaks, we call the landlord and he fixes it. If the oven breaks, we call the landlord and he replaces it. We don't have to spend the next 5 financially difficult years worrying about the possible big bills to roll in.
Swings and roundabouts I say
Indeed, there are definitely 'pros' to renting. However, the exceptional rate which landlords are now charging (and it's a strong market) seem dis-proportionate to the property you get for your money.We currently pay £800 a month rent for a small-ish 2 bed semi. Flats in the immediate area are £700-£800 so we got it quite cheap.
It would be more expensive to buy (mortgage around £1,000) but I'd rather do that than waste money on rent. However, there is no way we could afford the deposit to buy. Our neighbour has just put their house (which is identical to ours) for £295,000. Take stamp duty into account, legal fees and a 5% deposit - that's £20,000.
There are however advantages of renting with a young family. If our boiler breaks, we call the landlord and he fixes it. If the oven breaks, we call the landlord and he replaces it. We don't have to spend the next 5 financially difficult years worrying about the possible big bills to roll in.
Swings and roundabouts I say
When we moved out 2 years ago I had no idea we would be moving back home with Mum and Dad. Our first place was rented for £675 and it was a flat - you can't even get a flat (aside from a bedsit) for that money any more. The house we moved to was £715 PCM, which we struggled with. Identical properties are now up for £850 PCM just 18 months later.
£850 is a mortgage repayment on a 95% mortgage for a much, much bigger property in this area.
The cost is obviously driven up by demand, of which there is a lot, probably because a lot of people my age find themselves in this predicament.
I can turn my hand to most things and the industry I'm in means that I know a lot of builders / plumbers, so I could consider a property which needed work too. It's just that all-important deposit I need to get anywhere.
If I go back to private renting I might have ~ £100 spare per month which I could save or spend on holidays etc.
If I proceed with a mortgage I will be in the same position, albeit my hard-earned money won't be lining someone elses pockets and actually be counting for something.
It seemed surprising to the mortgage advisor at Natwest (who wasn't interested in taking the conversation any further) that a family member wouldn't 'gift' me the £20k.
Do people really get £20k 'gifts'?! Struck me as odd.
C.A.R. said:
Do people really get £20k 'gifts'?! Struck me as odd.
For a lot of people its the only way of getting a deposit.Not all are actually 'gifted' mind you and will be paid back eventually, but that just comes down to whether or not you want to lie on the application or not...
C.A.R. said:
£850 is a mortgage repayment on a 95% mortgage for a much, much bigger property in this area.
Would it be? In Herts? I'm in Hampshire so not quite apples with apples but we are just getting our first mortgage in place now at 90% and our repayments on that will be £1,200+ for 25 years repayment at 4.39% fixed for 3 years. This moves us from renting a 2 bed semi (£800) to a 3 bed semi...
Using Nationwide calculator (http://www.nationwide.co.uk/products/mortgages/our-mortgages/tools-and-calculators/tools#xtab:mortgage-payment-calculator) and a 4.4% rate I get a capital amount of £155,000 being a £850 repayment per month.
Does £155k get much in Herts? You'd need a further £8k deposit plus all the other stuff (legals, survey etc etc). Plus I don't think 95% mortgage's are available with a rate as low as that.
Not trying to shoot anything down, just trying be objective and realistic for you OP. I know my sister (lives overseas) had a child a couple of years ago and they really struggled too. They're making it through the other end now, but you have my empathy.
Edited by miln0039 on Thursday 5th June 17:46
Have you considered that it's not necessarily better to buy than to rent? When you buy, you're essentially "renting" money from the bank from which you get your mortgage - the interest on the mortgage is analogous to rent on a property.
Also, you have an opportunity cost for handing over that big deposit in order to purchase the property - this is money that could be invested elsewhere.
There's obviously a lot to consider, but renting rather than buying isn't actually as bad as you might think. The "dead money" you pay for rent means (as you've mentioned) you don't have to pay for maintenance, nor mortgage interest and you're much more able to move.
Have a read of these articles for some pros and cons
http://monevator.com/reasons-to-rent-a-house-inste...
http://monevator.com/reasons-to-buy-a-house-instea...
http://jlcollinsnh.com/2012/02/23/rent-v-owning-yo...
Also, you have an opportunity cost for handing over that big deposit in order to purchase the property - this is money that could be invested elsewhere.
There's obviously a lot to consider, but renting rather than buying isn't actually as bad as you might think. The "dead money" you pay for rent means (as you've mentioned) you don't have to pay for maintenance, nor mortgage interest and you're much more able to move.
Have a read of these articles for some pros and cons
http://monevator.com/reasons-to-rent-a-house-inste...
http://monevator.com/reasons-to-buy-a-house-instea...
http://jlcollinsnh.com/2012/02/23/rent-v-owning-yo...
will-w said:
There are however advantages of renting with a young family. If our boiler breaks, we call the landlord and he fixes it. If the oven breaks, we call the landlord and he replaces it. We don't have to spend the next 5 financially difficult years worrying about the possible big bills to roll in.
This is an extremely good point. Renting gives you a fixed outgoing. Don't forget that with a mortgage, especially with a 10% deposit, you will be paying a fair chunk every month in just interest. If it's a stretch to pay the mortgage then make sure you consider repairs required to the house, interest rate rises and of course 'home improvements' which the mrs will always be keen on 
C.A.R. said:
Do people really get £20k 'gifts'?! Struck me as odd.
Some people really do. In fact, some people I know got a significant amount more than that! However, there's a lot more satisfaction in doing it yourself. In terms of this thread and making life easier.... You sound like a hard worker and someone who has a desire to succeed. I would seriously suggest you get in contact with some decent recruitment company's in your sector. Give them an updated CV and give them a target salary figure (go £40k+). Let them do the peddling and see what they come back with. Also, make sure they don't rule out contract work.
Seriously, I know the design industry and whilst I don't know you or your skills you sound like your worth a lot more than your getting. Good luck.
Unfortunately some of those 'pros' to renting haven't exactly been the reality I have experienced.
For instance, when the boiler packed up at the first property the landlord sent someone out who determined that; yes, it was definitely faulty. This diagnosis took 4 days. The landlord then spent 5 weeks ignoring the agency / the agency ignoring us before it was eventually replaced. It's all very well saying that you just 'withhold rent' until these problems are fixed but the reality is very different.
I concede that it would have obviously cost me more to have it done if it was my property, but I could have borrowed the money from family and had it replaced immediately instead of going nearly 6 weeks with no hot water. Fortunately this was during the summer!
The same occurred at our second place when the power shower stopped working. That took nearly 2 weeks and a lot of hassle to resolve.
I'll admit that my experience is limited to 2 privately rented places under 2 different agents / landlords, but in both instances the experience was crap the moment you had a problem.
That is one 'pro' I don't accept anymore until proven otherwise!
For instance, when the boiler packed up at the first property the landlord sent someone out who determined that; yes, it was definitely faulty. This diagnosis took 4 days. The landlord then spent 5 weeks ignoring the agency / the agency ignoring us before it was eventually replaced. It's all very well saying that you just 'withhold rent' until these problems are fixed but the reality is very different.
I concede that it would have obviously cost me more to have it done if it was my property, but I could have borrowed the money from family and had it replaced immediately instead of going nearly 6 weeks with no hot water. Fortunately this was during the summer!
The same occurred at our second place when the power shower stopped working. That took nearly 2 weeks and a lot of hassle to resolve.
I'll admit that my experience is limited to 2 privately rented places under 2 different agents / landlords, but in both instances the experience was crap the moment you had a problem.
That is one 'pro' I don't accept anymore until proven otherwise!
So I had my meeting with the mortgage people on Saturday (in amongst the chaos caused by the EDL march in Stevenage).
Basically we cannot consider anything without the deposit backing - something we knew beforehand. The deposit amount varies depending on what avenue we take - if we want to buy our own place outright then he thinks £9k will afford me a £187k mortgage plus fees (so £12k+ realistically). I'd be looking at 10-12 months more with mum & dad if I can get that kind of money together.
We will likely pass the 'affordability' checks, we both work, we don't gamble and the only outstanding debt is the credit cards which are almost cleared. Never had any ccj's or been refused credit etc. I think he did the calculations based on the credit card debt still being in the region of £2k, so it really didn't make that much difference to our application.
Then there's shared ownership, which we hadn't really considered before. I'm struggling to work out the pro's and cons to this scheme and whether it is worthwhile pursuing it further. The deposit requirement is approximately half depending on the percentage of the shared ownership you go after (ie. 50-60%). The concern is that it is not possible to calculate what the HA will charge you in rent on the remaining value of the property. There's also a lot of scare stories online about shared ownership and my friend who works at a local law firm says he wouldn't recommend it unless we had no other option.
So..
I can try to pursue the whole frugal living thing for another 12 months with the aim of earning enough for a deposit, in the hope that these 6-8% price increases on property don't actually take hold. The only way I can speed this process up is to borrow money from family, which I didn't really want to do. With a mortgage and bills coming in I've no practical idea of what I will be able to pay back each month. Obviously if we consider my current situation as -
£1800 income (approx)
£300 housekeeping / rent
£1000 debt repayment
£500 living costs
Theoretically if the mortgage repayments, council tax and utility bills sum less than £1000/month I could afford to pay back what we are currently paying in housekeeping off a family loan.
However that isn't the case, since an estimated repayment on a mortgage is going to be anywhere between £850-925. Top that up with council tax @ £130ish, utility bills @ £150 and I've eaten into that £300 to the tune of £130 - 205.
Obviously this leaves little in terms of a 'rainy day' fund also. We currently have no plans for a holiday and the family car could do with replacing (old Pug 306). The £500 living costs I've calculated could probably go further, but I'm struggling to see how we can save more. £200 of that goes on fuel and insurance for the car every month as it is.
So as of today we are still no closer to having a 'plan', we just have a slightly better idea of what's available to us and our options (as well as a ton of reading material).
If we go back to renting we're looking at a £750-850 rent payment plus council tax plus utility bills, with the only advantage being that we could move out immediately.
As always, any input / help much appreciated.
Basically we cannot consider anything without the deposit backing - something we knew beforehand. The deposit amount varies depending on what avenue we take - if we want to buy our own place outright then he thinks £9k will afford me a £187k mortgage plus fees (so £12k+ realistically). I'd be looking at 10-12 months more with mum & dad if I can get that kind of money together.
We will likely pass the 'affordability' checks, we both work, we don't gamble and the only outstanding debt is the credit cards which are almost cleared. Never had any ccj's or been refused credit etc. I think he did the calculations based on the credit card debt still being in the region of £2k, so it really didn't make that much difference to our application.
Then there's shared ownership, which we hadn't really considered before. I'm struggling to work out the pro's and cons to this scheme and whether it is worthwhile pursuing it further. The deposit requirement is approximately half depending on the percentage of the shared ownership you go after (ie. 50-60%). The concern is that it is not possible to calculate what the HA will charge you in rent on the remaining value of the property. There's also a lot of scare stories online about shared ownership and my friend who works at a local law firm says he wouldn't recommend it unless we had no other option.
So..
I can try to pursue the whole frugal living thing for another 12 months with the aim of earning enough for a deposit, in the hope that these 6-8% price increases on property don't actually take hold. The only way I can speed this process up is to borrow money from family, which I didn't really want to do. With a mortgage and bills coming in I've no practical idea of what I will be able to pay back each month. Obviously if we consider my current situation as -
£1800 income (approx)
£300 housekeeping / rent
£1000 debt repayment
£500 living costs
Theoretically if the mortgage repayments, council tax and utility bills sum less than £1000/month I could afford to pay back what we are currently paying in housekeeping off a family loan.
However that isn't the case, since an estimated repayment on a mortgage is going to be anywhere between £850-925. Top that up with council tax @ £130ish, utility bills @ £150 and I've eaten into that £300 to the tune of £130 - 205.
Obviously this leaves little in terms of a 'rainy day' fund also. We currently have no plans for a holiday and the family car could do with replacing (old Pug 306). The £500 living costs I've calculated could probably go further, but I'm struggling to see how we can save more. £200 of that goes on fuel and insurance for the car every month as it is.
So as of today we are still no closer to having a 'plan', we just have a slightly better idea of what's available to us and our options (as well as a ton of reading material).
If we go back to renting we're looking at a £750-850 rent payment plus council tax plus utility bills, with the only advantage being that we could move out immediately.
As always, any input / help much appreciated.
C.A.R. said:
If we go back to renting we're looking at a £750-850 rent payment plus council tax plus utility bills, with the only advantage being that we could move out immediately.
No, there are lots of other advantages. You don't need saved capital for property repair like a boiler failure, or indeed have to sort those problems. You don't run the risk of negative equity if the south east property bubble bursts. You don't have to pay such huge costs to move. You probably don't have to pay such a high rate of cash per month in comparison to the early days of a mortgage.I'm not suggesting renting is sweetness and light. Many elements of it suck, but don't be chased into over-committing because the grass looks greener.
IMO, on your salary you are utterly insane to be considering a nigh on £190k house with a 95% mortgage. I bailed out of buying a £150k house, earning a fair whack more than that. I could have fiddled the affordability to have got it, but it wasn't worth it to me.
Back into rented for me, I've invested the deposit in my own business instead. I have not a shadow of a doubt that over the next two years I will earn significantly more (in real money) than the 'paper gain' on a house will provide.
Like someone earlier said, renting isn't all bad. If you have better ways to make you money work for you with investments, then do that instead. The next 12 to 18 months might be a bit 'interesting' in the housing market as there is a conflict of interests with some parties trying to inflate prices and others trying to suppress them. Personally, I sincerely hope the suppressors succeed on a grand scale, because house prices are a bloody joke.
Back into rented for me, I've invested the deposit in my own business instead. I have not a shadow of a doubt that over the next two years I will earn significantly more (in real money) than the 'paper gain' on a house will provide.
Like someone earlier said, renting isn't all bad. If you have better ways to make you money work for you with investments, then do that instead. The next 12 to 18 months might be a bit 'interesting' in the housing market as there is a conflict of interests with some parties trying to inflate prices and others trying to suppress them. Personally, I sincerely hope the suppressors succeed on a grand scale, because house prices are a bloody joke.
I predicted as much.
The problem with speaking to a mortgage advisor is that their interest is in trying to sell you a product, so they're unlikely to have ever given me 'the right kind' of advice, ie. unbiased.
The problem being that whatever path we choose, we will not be living 'comfortably', not even if I get the £30k salary I'm chasing.
So when it came down to it, if I was spending £800+ a month on either rent or a mortgage I'd rather it be the latter, purely for the fact that I stand to gain something if the house prices don't collapse.
Renting would make sense if it weren't for 'greedy' landlords, but this is all governed by supply and demand for which there is clearly an imbalance, driving the cost of renting up to an un-manageable high.
We won't be going on family holidays if we rent, but we wouldn't be going on them if we were to try and buy either. It's lose lose as far as quality of life is concerned! It's just depressing TBH.
The problem with speaking to a mortgage advisor is that their interest is in trying to sell you a product, so they're unlikely to have ever given me 'the right kind' of advice, ie. unbiased.
The problem being that whatever path we choose, we will not be living 'comfortably', not even if I get the £30k salary I'm chasing.
So when it came down to it, if I was spending £800+ a month on either rent or a mortgage I'd rather it be the latter, purely for the fact that I stand to gain something if the house prices don't collapse.
Renting would make sense if it weren't for 'greedy' landlords, but this is all governed by supply and demand for which there is clearly an imbalance, driving the cost of renting up to an un-manageable high.
We won't be going on family holidays if we rent, but we wouldn't be going on them if we were to try and buy either. It's lose lose as far as quality of life is concerned! It's just depressing TBH.
okgo said:
Yet numerous times you've been told to move to a cheaper area and you continue to ignore this advice. Remind me why your Mrs doesn't work again?
I have been advised by others to move further afield - something I'm not opposed to. However, there is nowhere within a commutable distance to where I work that offers enough of a cost saving to make it viable. This is the unfortunate situation we find ourselves in that house prices / rent typically are very high for this part of the country.My Mrs does work, keep up at the back!
MajorProblem said:
Why not apply for work elsewhere then?
Because-This job is secure
It pays well
There is an opportunity to progress in the next few months (hence the £30k target)
I have no qualifications / higher education. I'm just an experienced worker. Nobody seems interested in hiring me into other jobs.
I wouldn't completely rule it out, but it's a pretty unrealistic aim at present.
And a motorbike would see me dead in no time. I'm absolutely hopeless on a pushbike, let alone something even quicker.
I'd love to be paid more, I certainly feel like I work harder than my pay reflects.
However, with no higher education / degree then employers simply dismiss my application. I went through the process a few months ago prior to getting my payrise in May and had no interest / couldn't find a suitable position.
I travel 18 miles to work via the nightmare that is the A602 every day. I also car share to try and save even more money.
I think a motorbike would end up costing me more money since I'd need to obtain a license, a motorbike and equipment and would still need a car to get my family around, so two lots of insurance also. It would be a long while before the cost savings were actually recognised. And there's the aforementioned likely event I would kill myself.
However, with no higher education / degree then employers simply dismiss my application. I went through the process a few months ago prior to getting my payrise in May and had no interest / couldn't find a suitable position.
I travel 18 miles to work via the nightmare that is the A602 every day. I also car share to try and save even more money.
I think a motorbike would end up costing me more money since I'd need to obtain a license, a motorbike and equipment and would still need a car to get my family around, so two lots of insurance also. It would be a long while before the cost savings were actually recognised. And there's the aforementioned likely event I would kill myself.
Honestly, renting isn't too bad an approach. Don't forget SDLT/furnishings/fixing things/decorating when buying somewhere, this all adds up. And that's all without considering rate rises/council tax/utility bill increases etc.
I appreciate you want to have your own place, but there is always something that needs fixing/doing when it's your own place, which all costs
Unless your OH is happy with 2nd hand furniture/white goods/making do then you may find it is even more of a struggle.
I was lucky enough to be able to stay at my parent's when saving for a deposit, my OH was exactly the same (wanting to go out, have her own space etc.). We don't have kids, so am guessing we had it slightly easier.
I appreciate you want to have your own place, but there is always something that needs fixing/doing when it's your own place, which all costs
Unless your OH is happy with 2nd hand furniture/white goods/making do then you may find it is even more of a struggle.I was lucky enough to be able to stay at my parent's when saving for a deposit, my OH was exactly the same (wanting to go out, have her own space etc.). We don't have kids, so am guessing we had it slightly easier.
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