New house purchase, am I being an idiot??
Discussion
Sheetmaself said:
Teebs said:
How long have you been with the new partner for?
About a year, lived together for about 7 months. Im 40 so head screwed on and been through this before so don’t need to waste time second guessing if things feel right or not.
Nope and nope
Went through this a few months back, got advice from here on what to do and it will all be covered by the non marriage version of a pre-nup, I forget what it is called but she would need to be able to buy me out which couldn’t happen.
We will go in with the equity we bring in being our own and the equity gained from paying the mortgage being shared.
I will be under no obligation to maintain a home for them should we split either if married or otherwise.
Went through this a few months back, got advice from here on what to do and it will all be covered by the non marriage version of a pre-nup, I forget what it is called but she would need to be able to buy me out which couldn’t happen.
We will go in with the equity we bring in being our own and the equity gained from paying the mortgage being shared.
I will be under no obligation to maintain a home for them should we split either if married or otherwise.
sounded daunting but really wanted the house and it just goes out at the start of the month and that's that.Doesn't sound that big a stretch. We have always stretched to the biggest we can afford, and it does temper with time.
Sounds like you have been sensible with prenup equivalent. Which is wise given the income / expense spread.
Re a crash and local house prices, who knows. But as you already have a house it is the uplift that you are paying for, as every home owner is exposed, but it is only an issue if you need to sell. A lot of people here forget that for most people a house is for living in, and not just an asset. Having said that, it could be an opportunity for you to drive a bargain on the new property, particularly as we enter autumn.
Sounds like you have been sensible with prenup equivalent. Which is wise given the income / expense spread.
Re a crash and local house prices, who knows. But as you already have a house it is the uplift that you are paying for, as every home owner is exposed, but it is only an issue if you need to sell. A lot of people here forget that for most people a house is for living in, and not just an asset. Having said that, it could be an opportunity for you to drive a bargain on the new property, particularly as we enter autumn.
Sadly no bargain to be had with this one, off plan purchase and about 5 others want it!
The other one on the other hand I have negotiated £20,000 off and it is fully furnished and optioned with a rough cost (to the consumer) of £15,000 extras that are included in the deal.
My old business head wants this one as I previously thought of buildings as assets now I am buying a home and need to remember that!
The other one on the other hand I have negotiated £20,000 off and it is fully furnished and optioned with a rough cost (to the consumer) of £15,000 extras that are included in the deal.
My old business head wants this one as I previously thought of buildings as assets now I am buying a home and need to remember that!
If it's a forever home that you can see yourself retiring to, then crack on.
I'm in a broadly similar situation and I've not 'saved' a penny in 6 years, I make sure all fixed costs are deducted or taken into sub-accounts (eg car maintenance & tyres, holidays, rainy day fund etc), so that it's blindingly obvious by mid-month just what is left.
Have you not considered porting your existing mortgage, or does your partner want her name on the deeds?
Although the chain collapsed on our house purchase we went through a broker L&C (London & Country Mortgages) and they have been great, they seem to get great rates from 'high street' / well known lenders.
If the house you mention is the one, then if not done already make absolutely sure what the service charge covers, is it just the green area? Be aware that developers discount the management companies for the first 3+ years so be prepared once the development is complete that it may creep.
One point you haven't covered is that your partner's kids are presently at their cheapest, once the teenage years begin it's a slow wallet drainer, my 18- year old step-son has cost a small fortune once you take allowances, mobile phone contracts, school trips and the '0%-bank-of-dad' into consideration!
I'm in a broadly similar situation and I've not 'saved' a penny in 6 years, I make sure all fixed costs are deducted or taken into sub-accounts (eg car maintenance & tyres, holidays, rainy day fund etc), so that it's blindingly obvious by mid-month just what is left.
Have you not considered porting your existing mortgage, or does your partner want her name on the deeds?
Although the chain collapsed on our house purchase we went through a broker L&C (London & Country Mortgages) and they have been great, they seem to get great rates from 'high street' / well known lenders.
If the house you mention is the one, then if not done already make absolutely sure what the service charge covers, is it just the green area? Be aware that developers discount the management companies for the first 3+ years so be prepared once the development is complete that it may creep.
One point you haven't covered is that your partner's kids are presently at their cheapest, once the teenage years begin it's a slow wallet drainer, my 18- year old step-son has cost a small fortune once you take allowances, mobile phone contracts, school trips and the '0%-bank-of-dad' into consideration!
Barring a massive change in circumstances it will be the forever home yes.
Maintenance charge will go up with inflation so happy with that
I can port the mortgage over but i am fixed for another 7 years at 2.99% whereas i can fix for 5 years at 1.58% so while it may cost me £8,000 to get out of the mortgage I will save over this at the end of the five years plus I can extend the term of the mortgage.
I hadn’t thought about the kids getting more costly to be honest I will need to think on this bit.
Maintenance charge will go up with inflation so happy with that
I can port the mortgage over but i am fixed for another 7 years at 2.99% whereas i can fix for 5 years at 1.58% so while it may cost me £8,000 to get out of the mortgage I will save over this at the end of the five years plus I can extend the term of the mortgage.
I hadn’t thought about the kids getting more costly to be honest I will need to think on this bit.
I don’t want that to come accross and it is something i am aware of but in fact the opposite is true, I am more for the cheaper one and my partner is wanting the more expensive one and I’m trying to ensure it won’t ruin us as i am not too fussed which one we have all being equal whereas she is set for the pricey one!
Muzzer79 said:
There will always be risk-averse people telling you not to and what-iffing.
I'm super risk adverse, but I'm also the one that ended up mortgaging at 28% of my earnings buying a bungalow and the wife proceeding demolish it and replace it with a house, whilst at the same time the company I worked for was going through a CVA - so there was a twitchy bum for a while, because all i had to show for my "house" was a pile of rubble - the bailiffs wouldn't of even been able to knock at my door!My previous house i considered to be a stretch, but within a couple of years I was overpaying the mortgage. This house was a stretch for far longer and only became easier after a promotion - which was largely driven by the fact that i didn't like being stretched.
Hence my view, is that stretching is OK - IF you have relative job security and ideally the path to progress salary wise to reduce the burden/stress. Relying on inflation pay rises isn't really a good plan IMO, because many companies no longer give automatic pay rises of any percentage any longer - it's up to the individual to make themselves valuable to the business.
Sheetmaself said:
For the care home question i am unsure but my dad’s mums money went i to a care home instead of my parents and my parents have stated they have taken advice on what to do to ensure this doesn’t happen. May dad especially is very careful with money, to give an indication of what i mean he has a million plus worth of investments but was “only” on about £60k per year with two kids and a stay at home wife, so if there is a way he will of exploited it.
Given how much you are relying on inheritances for your standard of living in retirement, you owe it to yourself & family to do a lot more diligence on this question. Your answer is "hand waving" at best.Personally I feel that the political climate is moving towards higher inheritance taxes and wealth taxes later in life, so you could be setting yourself up for a nasty surprise here.
EDIT: the other thing to consider is that at age 40 you are nearly 50% through your earning years and you are proposing having a mortgage up to retirement (or slightly beyond). What pension savings have you already accumulated and what do you think you will accumulate in the next 30 years at your current contribution rate?
Sheetmaself said:
It will be fixed for 5 years at 1.58% part of the reason for the high mortgage is i need to pay £8k to get out of a 10 year fixed mortgage so this eats into my savings/equity but overall saves me over the next 5 years.
The house should (should!) go up in value as it’s in a really good location just outside of a major town with a canal passing through and a very popular house style with detached double garage. I initially was looking at one at £340,000 slightly smaller and single detached garage but on the edge of a rubbish area and I would be concerned about the value of that one dropping.
I would be concerned re price drop as local town nearby me big houses etc selling for £400,000 mate divorced could only sell house for £360,000 2 years later so lost all his deposit equity,maybe try to knock developer down a bit if possibleThe house should (should!) go up in value as it’s in a really good location just outside of a major town with a canal passing through and a very popular house style with detached double garage. I initially was looking at one at £340,000 slightly smaller and single detached garage but on the edge of a rubbish area and I would be concerned about the value of that one dropping.
saying that 14yrs ago I paid £50,000 over price to get my dreamhouse I am still in and paid off so can be worth stretching yourself for a once in a lifetime oppurtunity
mike9009 said:
Not sure I would want a mortgage at 70 years of age, although you might be looking to downsize before that?
How is your pension provision?
Pension is pretty good, I’m on a final salary pension that puts me on 40/60ths of my final salary from age of 62 rest of the payments will be overpayments and bonus for not drawing straight away as can retire and draw at 60. How is your pension provision?
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