Me and my girlfriend are thinking about getting a house through shared ownership. Has anyone had any experience of buying a house in this way I would be glad if you could share your views etc.
I have got all the information and the idea looks good but I want to hear how it is in practice.
Cheers
Sorry to state the absolute obvious , but have you lived with your girlfriend before?
Living with someone really brings out the 'real' monster so to speak ;-)
Actually i'd like some info on this too... my brother suggested it last night.
Rent first for at least 6 months.
If you're dead set on buying together, be sure to get legal assistance in drawing up documents to assure where the house is going in case of a breakup. I'm not up on anything, but that's probably the route I'd go.
I have been living with my partner for 2 and a half years now in rented accomodation (the top half of my mother's house, tbh...), and it's an ideal stepping stone, imo. We'll be looking to buy in about 3 years.
Now probably isn't the best time to buy. Prices are starting to drop and like others are suggesting you should rent for 6 months and see how things are then.
I think Famished may be talking about the other type of shared ownership? i.e. the method of buying a house.
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^ what he said... make sure that you're 50% liable in anything.
Was only renting, but i could have got mightily screwed over by that one.
Definitely live with someone first before committing to a large purchase like that... it can all go pear shaped very quickly.
But it's something that i'll be looking into possibly in the next couple.
TBH, it makes knob-all difference to the building society (in my experience). When me & the mrs bought this place we were'nt married (I know, gasp, shock-horror). The mortgage companies were perfectly aware of the situation & told us it made no difference. All we had to do was fill in some forms stating what we would do in the case of the other's sudden demise & that was it. As long as you have your insurances (life, buildings etc) that's all. And to be doubly sure, make a will.
Youi love each other right? Then stop farting around & go for it!There isn't much more satisfying than owning your own home & coming home to a warm house & hot mrs.
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Originally Posted by Blitzen
Me and my girlfriend have lived together for the past 2 and half years since uni, I would would much rather own some bricks than pay for some landlord to go on holiday for a month. We would buy 50% of the house and then buy out the rest of the house as time goes by.
In the current economical climate a Shared Equity mortgage is prolly the only way to go for a lot of first time buyers.
It's a common misconception that it always makes more financial sense to buy than to rent. It really doesn't matter whether you're paying for your landlord to go on holiday or not, what matters is what makes more financial sense for you. Go to the BBC mortgage calculator and see if what you pay in rent (or what you would pay on the size of house you want) would cover the interest on the mortgage you need. If it doesn't, then you will be better off in the long run if you rent. If you were to buy, you'd no longer be paying for your landlord's holidays, you'd be contributing to the bank's multi-billion pound profits instead! If your landlord has a hefty mortgage on the property (plenty of recent 'buy-to-let' types do), it could even be that he's effectively paying for you to live there!
Add to that that house prices in most areas of the country have been steadily falling for the last year and IMO it really makes no sense at all to buy at the moment. Keep renting, save up a deposit while the price of houses falls to a more sensible level, and buy when it does
cheers mate that makes quite a bit of sense
I really thank you!
I dont see how...you will be better off in the long run if you rent.
If I rent for 30 years I have nothing to show for it at the end of my time except maybe some savings in cash.
If I buy in 30 years I will have a house, the land that goes with it and everything. Anything goes pearshaped I can always sell up and have a nice lump sum of money and go back to renting or anyhting.
Twigman
Unless the value of the house depreciates, as was mentioned by someone above. Even if the value of the house is remains static, there are costs associated with selling. The only bright spot in your whole argument (at least if the situation is similar to the United States) is that you can write interest off on your taxes (which could net a nice profit if you snag a roommate or two willing to pay under the table). Additionally, buying a house is a marriage caliber commitment. For me, commitments are the enemy. The only commitment I will ever make is to live frugally and retire before age 40.
Look at it this way- if you rent a house, you're paying a certain amount of rent each month to the landlord for the privilege of renting the house. It doesn't make the house yours in any way. If you get a mortgage to buy the house, then you're effectively renting a large sum of money from the bank- the interest charge is the equivalent of rent- and since they still own the cash, they still own the house. So, if the yearly interest charge to borrow the money is more than you'd pay to simply rent the house directly, you're better off renting and putting the difference in a high interest savings account.
Of course, on top of the interest you pay back a bit of the mortgage every year, which does make the house yours bit by bit, so you just look at the interest charge to make the comparison.
Now, if the value of the house increases, then it's worth more than you paid for it, and this increase in value might be more than you could earn by saving up your money. However, at the moment prices are falling and so that doesn't happen. If you rent and put your money in a high interest savings account, then when house prices fall to the point where it is cheaper to get a mortgage than it is to rent the house, you can use that as a deposit so you start off owning a chunk of the house already. Somebody who bought their house at the top of the market and has subsequently found that it has lost value could at that point owe the bank more than their house is worth (negative equity)- so the person who rented and then bought is well ahead. Do you see?
I'm not saying that it's always better rent than buy- I plan to buy myself at some point. I'm just saying that if you're at the stage where you're considering buying a house (be it now or five years time) you should look at house prices, interest rates and rents and weigh up what, at that point in time, is the best value option.
No, it's not as simple as that. If you borrow a lot of money to buy a house which subsequently drops in value, you can end up owing the bank more than it's worth- this is negative equity. If you then lose your job and can't afford to pay the mortgage, they could reposses your home. When they sell it, they won't be able to recover the full value of the mortgage from it and so even though you've lost your home you still owe them money. In serious cases you could go bankrupt.Anything goes pearshaped I can always sell up and have a nice lump sum of money and go back to renting or anyhting.
This is not some horror story I'm making up to scare you, it happened to lots of people in the early 1990s and I wouldn't be at all surprised if it started happening again soon.
Last edited by Rave; 15-09-2005 at 11:55 PM.
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