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Is Your Rent Increasing
Today's news reports that Landlords will be increasing rents to cover for the new expenses that they are expected to face. Many landlords are also discarding properties due to the new legislation.
It is hard enough for young couples struggling with families without this additional cost. There is the much publicised government "Help To Buy" Scheme that ONLY applies to purchases of the new houses. This is where couples only have to find 5% deposit and agree to an equity loan to repay alongside a mortgage. Fine! Until the loan repayments start to increase after about six years.
But there is a second, lesser known scheme that allows first time buyers to purchase ANY house with the same 5% deposit. This is called the Mortgage Guarantee Scheme. Purchasers apply for a mortgage after shopping around for the best repayment rates - and then just pay the mortgage repayments. Over a thirty year period, the repayments are around the same as rental payments - but the difference is that while paying your mortgage, the house is the purchaser's to decorate and change as they wish and they do not have to worry about people in a neighbouring flat in the same property - after the thirty years the property is owned by the purchaser outright.
For a £100K house - the first time purchaser would need £5K - not easy, when you are paying rent, but if you can get a bit of overtime for a while, you could take out a loan to cover for the deposit, if you do not have a sympathetic family member.
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Originally Posted by
said
Over a thirty year period, the repayments are around the same as rental payments - but the difference is that while paying your mortgage, the house is the purchaser's to decorate and change as they wish and they do not have to worry about people in a neighbouring flat in the same property.
So you're comparing buying a house with renting a flat? Hardly the same and I doubt the monthly rent on many flats would be more than the monthly mortgage payment for a house.
Certainly once the mortgage is paid off it works out cheaper in the long run but many people are barely making ends meet from month to month so being better off in 30 years time isn't an option.
Also when you buy a house you will have the cost of maintaining and insuring the building.
Only buy if you can comfortably afford to do so would be my advice.
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Originally Posted by
salus.populi
So you're comparing buying a house with renting a flat? Hardly the same and I doubt the monthly rent on many flats would be more than the monthly mortgage payment for a house.
Certainly once the mortgage is paid off it works out cheaper in the long run but many people are barely making ends meet from month to month so being better off in 30 years time isn't an option.
Also when you buy a house you will have the cost of maintaining and insuring the building.
Only buy if you can comfortably afford to do so would be my advice.
Agreed - but the costs are now comparable. Basically, mortgage repayments are similar to saving the money in a bank account for yourself. It does not go to a third party and you have something valuable at the end of it. Another take would be - only pay rent if you can comfortably afford to do so. At least in a house you can insulate it so the cost of heating is kept low, that is not an option if you rent, and many rental places have those high ceilings.
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