Is paying a mortgage better than renting?

Many people feel that owning a property is cheaper than renting. They see that some people are paying less on their mortgage than they do in their rent and they feel that having a mortgage is the right things to do. However, there are other things to consider.

Firstly, if you own a house, you have to pay to maintain it. If there is any damage to the building you have to pay to get it fixed, you also have to pay to decorate it. You also have to pay the buildings insurance on it. If you have a mortgage you will also have to pay life insurance that will pay off the mortgage if you die.

If you rent, you will not have to pay out any of these extra expenses. If there is a problem with your house, you will be able to get the landlord to sort them out. It may take a while to get it done, but you will not have to pay out any money for it.

rent-vs-buy

Owning a  house does mean that you have something for your money. Some people feel like rent is throwing money down the drain, when having a mortgage means that you have money tied up in a property. The thing with this is that you will always need somewhere to live and so you cannot get to this money easily. In fact it is likely that it will only be available when you die. This means that your dependants will benefit from it, which could be something that you think is good.

It is difficult to say whether renting or mortgaging is better. It can depend on your own personal circumstances. You will have to pay for a house about three times over if you have a mortgage and you will have to pay to maintain it over the years and added in with the cost of the insurance it can come to a great deal of money. With renting, you are probably paying a lot less over the years, but you will have nothing to leave to your children when you no longer need a house.

Some people just cannot afford the deposit on a house to be able to have a mortgage. Then renting is going to be the only option for them. However, there are people who can afford a mortgage but would rather rent. It is all a matter of opinion really and something that you need to think hard about with your future in mind as well as your present situation. Talking it over with friends, family and work colleagues can be really helpful.

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Do You Really Need a House in a Troubled Economy

Some UK homeowners are starting to change the way that you’re looking at the real estate market. The truth is that you don’t have to own a home. Many people actually go their entire lives without owning their own home. However, there is something to be said about having something that’s yours. There is something to be said about having something that you can pass down to your children. But with interest rates being tempting, shouldn’t you go ahead and get your own home in this troubled economy anyway?

The answer might surprise you, but we don’t think that you should go out and automatically purchase a home. There are other factors that you’re going to have to think about if you’re really serious about being a homeowner for the long term. Of course, anybody can be a homeowner for the short term. They can just decide that they’ll make a few payments. But what if you have to think about the future? What if your job changes and you suddenly can’t get the things done that you really want to do? That’s where you start wondering if things are really going to be as put together as you think they will be. You have to start looking at the way the world is, not just the way you think it should be. If you don’t have job security now, why would you go out and get one of the top things in life where you really do need job security to maintain it? It’s something that just doesn’t make a whole lot of sense, if you ask us.

UK homeowners

As long as you’re thinking about this, you need to stop and get a lot more on the plate than just these things. You have to think about how you’re going to save up for that deposit. Sure, you could try to get the home and pay a minimal deposit. But that’s going to bite you in terms of equity. They will also make you get additional insurance to cover the chance of default from the mortgage holder’s point of view.

You want to still think about maintenance costs and council taxes. Taxes and insurance and everything else on a home can be substantial. It’s too quick to just pull out a simple mortgage loan calculator and judge everything by the payments that you’re going to be making on the home. That’s just the mortgage. You have to think about everything that’s involved with the house.

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Attracting tenants to your buy to let property

First impressions are everything when it comes to letting out your buy to let. It is crucial to have a well presented property in order to attract the right type of tenants. If the tenant views a clean and tidy home they are more likely to keep it in this condition, if you are presenting them with something unkempt they are less likely to look after said property. Small things have the potential to drive your tenant away but by making some minor alterations you can up your ‘curb appeal’ and therefore entice good occupants.

Ensure that the front of the property is kept clean and neat. Small labours such as mowing the grass, sweeping footpaths and pulling up any weeds make a vast difference, this will let the tenant know that the property is well sustained.

Within the property cleanliness is vital. Make sure you air out the property before holding a viewing. Ensure that you take the time to dust and vacuum beforehand. Cleaning products that leave a subtle smell will be inviting but don’t go too over board. Mainly focus upon the kitchen and bathrooms, unhygienic spaces will put tenants off instantaneously, so these areas need to be impeccable. Bleach all the bathrooms and make sure all tiling work has clean grouting and is mould free. Wipe down all kitchen cupboards and facades.

buy to let property

If your property in unfurnished this makes life much easier for both you as the landlord and for the tenant themselves. It gives them the freedom to put their own touch upon the property with their own belongings to make it feel like home. It also means that when it comes time for the tenant to vacate the property there are fewer checks to carry out in relation to evaluating any conceivable damage that may have occurred.

Electrical items that you are supplying need to be checked every 12 months by a qualified electrician, this is also true of the boiler, this needs to be serviced frequently in order for the property to be safe for your tenant. As the landlord it is exclusively your obligation to make sure that both the property itself and the appliances that you are providing are safe

Last but not least be prepared and organised! All tenant agreements need to be in order, and payment dates set out in advance so that both you and the renter know where you are in relation to payment dates. As in most situations the rent that you receive from the tenant is funding the mortgage you don’t want any nasty surprises, make sure that they are aware that prompt payment is essential in order for you to avoid any possible late payment charges or impairment to your credit rating.

Individuals don’t invest within the property market every day, consequently it’s significant that you make enquiries into the buy to let mortgage options that are available to you. There are many brokers that will offer you free advice or comparison sites where you are able to enter information and find the mortgage option most suited to your needs.

Ceri Harris is an underwriter at Willows Finance a secured loans company based in Wales.

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How to Save Money for a Down Payment on a House

The idea of saving enough money to be able to afford a down payment on a house can be overwhelming. In today’s market you need to be creative and focus on finding many ways to save money for your goal. Here are some easy suggestions to help get your started:

  • Goal-oriented savings account. Open a savings account specifically for your house down payment so you can track your progress and the account growth. You should not link a debit card to this account; this may help prevent you from spending the money on something else. You should research opening this new account at an online bank. Online banks often pay higher interest rates than traditional banks and they are FDIC insured.
  • Monetary gifts. If you receive any monetary gifts from your wedding or from a parent or relative put the money away in the savings account specifically for your house down payment.Down Payment on a House.

    Down Payment on a House

  • Automatic savings plan. Take advantage of this opportunity if your employer offers it. Ask for a percentage of your direct deposit from your paycheck to be sent to the savings account that is specifically for your house down payment. Having a set amount deposited into your savings account helps with your savings goal and ensures that your balance is growing. It may take some time to reach your goal, but it will be worth it in the end.
  • Take inventory. Find the items in your house that are valuable but that you do not use or need and think about selling them. The proceeds from the sale can be added to your savings account to get you closer to your goal. If at the end of the day you are unable to part with your items, you can still get an appraisal for the items for your records.
  • Budget adjustments. Sacrifices now will help you obtain your goal of owning a house in a shorter period of time. Review your budget to see if there are areas where you can reduce or eliminate the expense.

While it can be overwhelming at times, achieving your goal of home ownership will be very rewarding. Remain focused on your ultimate goal and you will achieve your dream.

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House prices pick up sharply across the UK

The number of homes coming onto the market fell during November of this year pushing up house prices even further according to a recent survey. The survey, conducted by the Royal Institute of Chartered Surveyors, has shown that house price growth hit a 14 year high during November and is expected to continue growing due to the lack of supply. The survey indicates that 59% more chartered surveyors have forecast that house prices will continue to rise rather than decrease in the next few months. This figure is the highest seen since September 1999.

House prices rose sharply last month according to 58% of those surveyed. Every region of the UK saw price rises for the second consecutive month. For example Yorkshire saw house prices rise by 7.7 percent. Some regions are still struggling more than others but most regional markets are responding positively to the latest government schemes and consumer confidence is on the rise. The lack of housing supply appears to be the biggest challenge faced by the UK housing market but the number of transactions is still on the rise. The average number of homes sold by each chartered surveyor included in the survey hit 20.6. This was during the three months leading to November. During the same period in 2012 the average number of homes sold per chartered surveyor was 15.9.

House prices

According to the survey, 76% of surveyors predict that sales levels will rise significantly heading into 2014. The Bank of England’s withdrawal of Funding for Lending could slow the market slightly as many may struggle to afford to get on the housing ladder. However, this is countered by the number of reduced price mortgages already widely available therefore the withdrawal of this scheme may have less impact than originally thought. According to the survey, 52% more chartered surveyors in Scotland predict house prices to continue rising over the next three months. Some 42% of surveyors reported price growth in Scotland. Director of RICS Scotland Sarah Speirs has stated that the lack of housing supply is one that will be addressed in the coming year.

Prices were also up in Northern Ireland according to the survey. A net balance of 23% of surveyors reported price rises in the three months to November and this was the sixth consecutive month of price growth seen. However, average prices are still 50% below peak levels. Variations can also be seen across Northern Ireland.

New homes director at the Mortgage Advice Bureau Andy Frankish states that, due to rising confidence, the movement in the housing market is positive and government schemes such as Help to Buy are helping increase demand. Consumer interest is on the increase therefore many home sellers are responding to demand by raising their asking price. However, supply must meet demand should the market keep improving over the coming year. Confidence among the construction industry is on the rise therefore, with the government’s help, steps can be made to increase the supply of housing and create a wider variety of housing in the UK.

Such activity on the housing market is likely to contribute to an increase in activity at estate agents in Huddersfield as well as other desirable places across the UK.

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Sellers, Rejoice – House Prices are Going Up

The Guardian recently reported that the house prices are on the rise — but that’s only half the picture. The house prices are rising because sellers are standing up and really looking at how much their homes are worth. Once multiple sellers start listing their homes higher, it becomes a trend in terms of where the homes begin to be worth a lot more than before. Are you a seller that’s looking at how to make more money on your property, or just to make sense of the trend in general? That’s what this guide is all about.

In our opinion, just trying to list your house at a higher price really isn’t enough. You need to seriously look at the condition of your house. This is where having a real estate agent available to pull comparable is very important. You don’t want to list so low that you’re just taking any offer that comes in. You want to list in a way that represents the true value that your home provides. You need to consider the location, any mineral rights or water rights that come with the property, as well as future development. Far too many people have listed their home for very little money, only to be disappointed later on when developers come in to change the area. You wouldn’t do too terrible if you were to look at the current news going on around you. That’s when you’ll really see what’s going on, and then you can make changes accordingly.

Make sure that you stress the importance of not just repairs, but staging. Buyers want to imagine living there, not imagining you living there. If they can’t do that, then they aren’t going to be interested in the property.

Don’t get discouraged just because the first open house didn’t go through as planned. Again, looking at the numbers can bring you a little bit more patience when it feels like everyone’s overlooked your home. Investing in your property creates an asset that you can enjoy for life. You might as well check it out when you have a chance, right? Who knows what will happen when you put your home up for sale? Make sure that you also find a great real estate agent, because you can’t go too far without that!

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Remortgage & first time buyer lending at its highest for five months

The Council of Mortgage Lenders released figures today showing that remortgage lending is at its highest level for the last 5 months. A total of £3.4bn was advanced to UK borrowers remortgaging in April 2013, which is the highest level since November 2012. (However this figure is still slightly below the figure for the same time last year – April 2012, which stood at £3.5bn)

The CML also reports that gross lending for April 2013 has been the strongest month since 2008! With an 4.3% increase in gross lending from £11.6bn to £12.1bn, and they point out this is due in part to the strength of the remortgage lending.

January to April saw 70,700 loans advanced to first-time buyers, which was 11% higher than the same time last year. The first quarter activity is even more impressive when you consider than last year was boosted by the stamp duty holiday, which ended last year.

CML director general Paul Smee says: “Lending to first-time buyers remains above the levels seen at the same time last year, despite the boost caused by the end of the stamp duty holiday in March last year.”

Approximately 46% of home buyer mortgages where advanced to first time buyers in April, which has been steadily rising since the lows of 38% seen in 2007. It is also a positive sign to see the average loan to value rate increasing from 80% to 81% which indicates more mortgages are being provided at higher LTV than the previous year, for example an average first time buyer now only need to put down a 19% deposit, compared with 20% in March.

But if the “Funding for Lending” and “Help to Buy” schemes both helping to boost first time buyers and the available of mortgage lending?

Kevin Gibson, Ascot Mortgages says “Strong first time buyer activity is very welcome news, this spring have shown many very positive signs for first time buyers and home movers alike. This is mostly due to increasingly attractive mortgage deals – with many lenders lowering their rates and with more enticing offers being slowly rolled out to buyers with smaller deposits.”

The average first time buyer mortgage rate for 95% mortgages has also slightly reduced from 5.48% last year, to 5.32% this month. The overall range of deals available has decreased slightly, but it looks like the deals are getting better.

There is however still criticism that the Funding for Lending scheme, which the government championed would help first time buyers get a foot on the property ladder just isn’t hitting the spot, as the majority of people benefitting from the more significant drops in interest rates are those with 30% deposits and more, which typically are not first time buyers.

Kevin Gibson, Ascot Mortgages says “This may have been a different story if the government insisted that their Funding for Lending Scheme was to be for higher LTV lending”

“The Help to Buy scheme announced in this year’s Budget should provide a further boost to the first-time buyer and home mover markets, but we still await further details on how the initiatives will work.”

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