Good idea to move out?
Discussion
This is going to be a long one, so get comfy!
I'm 19, currently have £12,000 in the bank. I also own 35% of a flat worth around £35,000 and earn £200 a month (apprentice, on £5 an hour, 40 hour week). Said salary will go up each year, in that after one year of being where I currently am I'll be on £6 an hour, then after another year £7 an hour. Once I'm fully qualified it goes further (I've forgotten to what though). Through general chat with a co-worker he has found all that out (over many many conversations) and yesterday pitched me an idea:
Purchase the other 75% of the flat from my mum and sister (30% and 35% respectivly) with a mortgage of around £25,000, do it up a little (not excessively so) and live in it for 5-7 years. Sell and move into a nicer place in a nicer area, hopefully making some money in the process.
How does this sounds as an idea? Considering I currently have no personal space at my parents (share a room with my 21 year old sister) you can imagine it is reasonably appealing to me. However I worry about living in relative poverty for a long time (obviously not appealling) and my car (which is my pride and joy, and I worry it'll be vandalised)
The mortgage figure is extremely loose, I have no idea how much I'd be allowed to borrow, or how much I'd particularly need etc. Just a figure where we got some figures, then plucked the £25,000 out for it (in other words, it's very very rough).
Bearing in mind I only got this idea pitched to me yesterday, so while thought has went into it, not excessive amounts have been spent trying to work everything out).
I'm 19, currently have £12,000 in the bank. I also own 35% of a flat worth around £35,000 and earn £200 a month (apprentice, on £5 an hour, 40 hour week). Said salary will go up each year, in that after one year of being where I currently am I'll be on £6 an hour, then after another year £7 an hour. Once I'm fully qualified it goes further (I've forgotten to what though). Through general chat with a co-worker he has found all that out (over many many conversations) and yesterday pitched me an idea:
Purchase the other 75% of the flat from my mum and sister (30% and 35% respectivly) with a mortgage of around £25,000, do it up a little (not excessively so) and live in it for 5-7 years. Sell and move into a nicer place in a nicer area, hopefully making some money in the process.
How does this sounds as an idea? Considering I currently have no personal space at my parents (share a room with my 21 year old sister) you can imagine it is reasonably appealing to me. However I worry about living in relative poverty for a long time (obviously not appealling) and my car (which is my pride and joy, and I worry it'll be vandalised)
The mortgage figure is extremely loose, I have no idea how much I'd be allowed to borrow, or how much I'd particularly need etc. Just a figure where we got some figures, then plucked the £25,000 out for it (in other words, it's very very rough).
Bearing in mind I only got this idea pitched to me yesterday, so while thought has went into it, not excessive amounts have been spent trying to work everything out).
Firstly, congratulations on getting £12,000 of savings and 35% of a property at 19 years of age!.
I obviously assume you mean £200 a week, which would be £866 a month. A repayment mortgage would cost you £108 a month (based on a 3% interest rate and you borrowing the full 65% balance of the property) leaving you with £758 a month for all other costs.
The borrowing you would need (£22,750) is well within your earnings capacity and £108 a month (£25 a week) is a small price to have your independence.
I can't comment on your concerns for your car though!
I obviously assume you mean £200 a week, which would be £866 a month. A repayment mortgage would cost you £108 a month (based on a 3% interest rate and you borrowing the full 65% balance of the property) leaving you with £758 a month for all other costs.
The borrowing you would need (£22,750) is well within your earnings capacity and £108 a month (£25 a week) is a small price to have your independence.
I can't comment on your concerns for your car though!
Difficult one and a very personal one.
I didn't move out until I was 26 and lived at home until then. Lived a bit as a young-un. Nice car, motor sport, pub etc etc
Once out I was in a flat, then a house, then another and so on. Always had to temper my spending a little, borrowing on credit card every month then paying it back became the norm, but it's been worth it (I think).
A friend from school days moved away from his home area for work at the age of about 23. Bought a small place, caught the house price increases earlier and ended up with a place in Fulham worth well over a million.
But I don't think house prices will rise anything like the way they did then, but there again interest rares were 15% not 2 or 3%!
Would you really like to live in this place. Would you be better getting your money out of that one and buying elsewhere? Does your Mum & sister want to sell??
I didn't move out until I was 26 and lived at home until then. Lived a bit as a young-un. Nice car, motor sport, pub etc etc
Once out I was in a flat, then a house, then another and so on. Always had to temper my spending a little, borrowing on credit card every month then paying it back became the norm, but it's been worth it (I think).
A friend from school days moved away from his home area for work at the age of about 23. Bought a small place, caught the house price increases earlier and ended up with a place in Fulham worth well over a million.
But I don't think house prices will rise anything like the way they did then, but there again interest rares were 15% not 2 or 3%!
Would you really like to live in this place. Would you be better getting your money out of that one and buying elsewhere? Does your Mum & sister want to sell??
Julian has outlined the mortgage side, it’s easily doable from that point of view, I would be a bit wary of the other costs.
Do you pay housekeeping with your present arrangements at home?
Off the top of my head;
Council tax & water rates (your comment about your car’s safety tends towards it being a lower band but even so) £50 a month?
Gas & elec £50 a month?
Home insurance £20 a month
Buying all your own food £150 a month
We’re nearly at half your monthly income and haven’t looked at your car’s costs, money to do the place up and having money left over for living life while you’re young.
If it was me, I would stick it out another year. That extra pound an hour I think would make all the difference and because it’s already in the family, the chances of the flat being snapped up by someone else isn’t really there.
Do you pay housekeeping with your present arrangements at home?
Off the top of my head;
Council tax & water rates (your comment about your car’s safety tends towards it being a lower band but even so) £50 a month?
Gas & elec £50 a month?
Home insurance £20 a month
Buying all your own food £150 a month
We’re nearly at half your monthly income and haven’t looked at your car’s costs, money to do the place up and having money left over for living life while you’re young.
If it was me, I would stick it out another year. That extra pound an hour I think would make all the difference and because it’s already in the family, the chances of the flat being snapped up by someone else isn’t really there.
Firstly as others have said - congrats on having that much savings at 19 - You must be screwed on!
If I were in your position I'd use the 12k to pay off your sister @ 35% (£12,250)
in theory (because you already own 35% you'd only have your mum left to pay out, which is only £10.5k
Could you not mortgage only this part or even just make an arrangement with her to pay monthly? (saving yourself the interest of a mortgage?)
Good luck whichever way to decide to go!
If I were in your position I'd use the 12k to pay off your sister @ 35% (£12,250)
in theory (because you already own 35% you'd only have your mum left to pay out, which is only £10.5k
Could you not mortgage only this part or even just make an arrangement with her to pay monthly? (saving yourself the interest of a mortgage?)
Good luck whichever way to decide to go!
JulianPH said:
Firstly, congratulations on getting £12,000 of savings and 35% of a property at 19 years of age!.
I obviously assume you mean £200 a week, which would be £866 a month. A repayment mortgage would cost you £108 a month (based on a 3% interest rate and you borrowing the full 65% balance of the property) leaving you with £758 a month for all other costs.
The borrowing you would need (£22,750) is well within your earnings capacity and £108 a month (£25 a week) is a small price to have your independence.
I can't comment on your concerns for your car though!
Yes I did mean £200 a week I obviously assume you mean £200 a week, which would be £866 a month. A repayment mortgage would cost you £108 a month (based on a 3% interest rate and you borrowing the full 65% balance of the property) leaving you with £758 a month for all other costs.
The borrowing you would need (£22,750) is well within your earnings capacity and £108 a month (£25 a week) is a small price to have your independence.
I can't comment on your concerns for your car though!
Joys of writing that quickly before I left the house at 7:20 in the morning!Nice mortgage breakdown, thanks
I feel obliged to point out that the savings are inheritance (although I like to think that the fact I haven't spunked it all (nearly did on an MGB though) is a good sign)
Skyedriver said:
Difficult one and a very personal one.
I didn't move out until I was 26 and lived at home until then. Lived a bit as a young-un. Nice car, motor sport, pub etc etc
Once out I was in a flat, then a house, then another and so on. Always had to temper my spending a little, borrowing on credit card every month then paying it back became the norm, but it's been worth it (I think).
A friend from school days moved away from his home area for work at the age of about 23. Bought a small place, caught the house price increases earlier and ended up with a place in Fulham worth well over a million.
But I don't think house prices will rise anything like the way they did then, but there again interest rares were 15% not 2 or 3%!
Would you really like to live in this place. Would you be better getting your money out of that one and buying elsewhere? Does your Mum & sister want to sell??
Do I want to live in it? Don't know. A few years ago I would have point blank said no without a moment's thought, however the area is "on the up" so it's got me thinking. I didn't move out until I was 26 and lived at home until then. Lived a bit as a young-un. Nice car, motor sport, pub etc etc
Once out I was in a flat, then a house, then another and so on. Always had to temper my spending a little, borrowing on credit card every month then paying it back became the norm, but it's been worth it (I think).
A friend from school days moved away from his home area for work at the age of about 23. Bought a small place, caught the house price increases earlier and ended up with a place in Fulham worth well over a million.
But I don't think house prices will rise anything like the way they did then, but there again interest rares were 15% not 2 or 3%!
Would you really like to live in this place. Would you be better getting your money out of that one and buying elsewhere? Does your Mum & sister want to sell??
Would I be better with another one? Good question, anything equivalent in a nicer area would be about £20,000 more. Which means I can't afford it! Take what you will from that
Mum and sister want to sell? Well, if I don't live in it it's getting put on the market anyway, so I assume they'd actually be more willing to sell to me than a random stranger (sentimental value).
Dan_M5 said:
That must be a very strange relationship you have with your sister. Move out!
We absolutely despise each other! Although we have got everything down to a tee so we are never ever in the room at the same time, other than sleeping. Which again our beds are at opposite sides of the room so were about as far apart as we can get! It works, just not happily.
Shermanator said:
Do I want to live in it? Don't know. A few years ago I would have point blank said no without a moment's thought, however the area is "on the up" so it's got me thinking.
Would I be better with another one? Good question, anything equivalent in a nicer area would be about £20,000 more. Which means I can't afford it! Take what you will from that
Mum and sister want to sell? Well, if I don't live in it it's getting put on the market anyway, so I assume they'd actually be more willing to sell to me than a random stranger (sentimental value).
It doesn't matter how you got the money, it is the fact you kept hold of it that is important!Would I be better with another one? Good question, anything equivalent in a nicer area would be about £20,000 more. Which means I can't afford it! Take what you will from that
Mum and sister want to sell? Well, if I don't live in it it's getting put on the market anyway, so I assume they'd actually be more willing to sell to me than a random stranger (sentimental value).
If the flat is in an up and coming area you may want to keep hold of it as you would benefit from the growth in value.
If you wanted to sell and buy in a better area (having already bought your mum and sister out) then the addition of your £12,000 cash would still enable this (though at slightly higher monthly payments.
If there is no one currently living there why don't you move in for a month and see how it feels before committing?
And my I congratulate other PHers for refraining from offering to share a bedroom with your 21 year old sister!
emicen said:
Julian has outlined the mortgage side, it’s easily doable from that point of view, I would be a bit wary of the other costs.
Do you pay housekeeping with your present arrangements at home?
Off the top of my head;
Council tax & water rates (your comment about your car’s safety tends towards it being a lower band but even so) £50 a month?
Gas & elec £50 a month?
Home insurance £20 a month
Buying all your own food £150 a month
We’re nearly at half your monthly income and haven’t looked at your car’s costs, money to do the place up and having money left over for living life while you’re young.
If it was me, I would stick it out another year. That extra pound an hour I think would make all the difference and because it’s already in the family, the chances of the flat being snapped up by someone else isn’t really there.
Currently have to pay £250 a month "dig" money. Which is obviously a lot!Do you pay housekeeping with your present arrangements at home?
Off the top of my head;
Council tax & water rates (your comment about your car’s safety tends towards it being a lower band but even so) £50 a month?
Gas & elec £50 a month?
Home insurance £20 a month
Buying all your own food £150 a month
We’re nearly at half your monthly income and haven’t looked at your car’s costs, money to do the place up and having money left over for living life while you’re young.
If it was me, I would stick it out another year. That extra pound an hour I think would make all the difference and because it’s already in the family, the chances of the flat being snapped up by someone else isn’t really there.
My car shouldn't cost too much, it's a Citroen C1! Although, obviously absolutely anything could happen, and I've got to take that into consideration!
Maybe I could put the flat on the market and if it doesn't sell within the year buy it myself
dionbee93 said:
Firstly as others have said - congrats on having that much savings at 19 - You must be screwed on!
If I were in your position I'd use the 12k to pay off your sister @ 35% (£12,250)
in theory (because you already own 35% you'd only have your mum left to pay out, which is only £10.5k
Could you not mortgage only this part or even just make an arrangement with her to pay monthly? (saving yourself the interest of a mortgage?)
Good luck whichever way to decide to go!
Like your idea, other than the fact it doesn't have any plan for the renovation.If I were in your position I'd use the 12k to pay off your sister @ 35% (£12,250)
in theory (because you already own 35% you'd only have your mum left to pay out, which is only £10.5k
Could you not mortgage only this part or even just make an arrangement with her to pay monthly? (saving yourself the interest of a mortgage?)
Good luck whichever way to decide to go!
JulianPH said:
It doesn't matter how you got the money, it is the fact you kept hold of it that is important!
If the flat is in an up and coming area you may want to keep hold of it as you would benefit from the growth in value.
If you wanted to sell and buy in a better area (having already bought your mum and sister out) then the addition of your £12,000 cash would still enable this (though at slightly higher monthly payments.
If there is no one currently living there why don't you move in for a month and see how it feels before committing?
And my I congratulate other PHers for refraining from offering to share a bedroom with your 21 year old sister!
Mhm, moving in for a month sound interesting but risky! Will think about that If the flat is in an up and coming area you may want to keep hold of it as you would benefit from the growth in value.
If you wanted to sell and buy in a better area (having already bought your mum and sister out) then the addition of your £12,000 cash would still enable this (though at slightly higher monthly payments.
If there is no one currently living there why don't you move in for a month and see how it feels before committing?
And my I congratulate other PHers for refraining from offering to share a bedroom with your 21 year old sister!
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