Like A Rolling Stone

So much has happened in the past month that I didn’t really know where to begin! I was going to break it all down into smaller posts but that has just led me to procrastinate typing it all up so I’m going to just write it all in this post!

A couple of weeks after our first foray into viewings, we were back at it.  This time we went by ourselves and had a look at a small village about ten minutes drive away from the first town we had a look at.  We quite liked the quieter feel while still being close to town.

We viewed four properties that day.  There was one definite ‘no’ due to a lack of natural light and a small garden and two definite maybe’s for various reasons. The last one of the afternoon I didn’t even recall booking the viewing for.  We loved it.  It needs some work but not nearly as much as the other place we looked at did.  It had three bedrooms, a garage and a huge garden.

After the viewing, we went to the local pub to discuss what we had seen.  We started chatting to the bartender and she told us more about the area (and the other local pubs!).  Talking about what we wanted from our forever home really cemented our decision and we put in a lower offer on the final place we saw.

A few days later we found out we had been successful and our offer had been accepted! We were both in a bit of shock, we fully expected the offer to rejected as it was last time.  Over the next week there were a flurry of emails from the real estate recommending mortgage brokers and solicitors to us going to comparison websites and doing our own research.  We ended up going with the real estate agents recommended broker and finding our own solicitor via the comparison website and this seems to have worked out well.

We had a homebuyer’s report done on the place to make sure there was nothing serious wrong with it (again, we used a comparison site to get the best deal).  Thankfully there wasn’t.

So as it stands, our solicitor is making the final checks on the property and we are still awaiting the outcome of our mortgage application.

We are still in two minds about potentially leaving London.  I’ve gone over the pros and cons in my mind more than a few times and there are advantages to both options but  ultimately I believe we can make a good go of living in this new area.

I look forward to letting you knowing whether we are going to be homeowners or not in the next post!

3 Reasons Your House Offer Could Be Rejected

Last blog I shared our adventures in house hunting.  We saw three properties and liked one of them enough to make an offer.  Unfortunately, after a few days deliberation we received news from the estate agent that the vendors had moved forward with somebody else’s offer.

Having reflected on it, I’m not too surprised at this outcome and there are definitely a few things we’re going to do differently next time.

Do your homework!

Don’t just research the home that you’re viewing before making an offer.  Spend time learning about the neighbourhood.  How much have similar properties in the area sold for? How long ago were they sold for? How long were they on the market before selling?

We went to the viewing not really knowing what to expect or really what we were looking for.  The house had a few features that made it particularly desirable (big garden and garage) and there weren’t many other properties for sale like it in the area. It had only been on the market two weeks when we jumped in and offered 7% lower than the asking price.  The estate agent warned us that there were other offers that were higher but we thought blind optimism could win the hearts of the vendors.

How low will the vendor go?

The seller has probably done their research when putting their home on the market and has their own bottom dollar that they won’t go below. Perhaps they require a certain amount in order to afford their next house, they are mortgage-free and can afford to wait for a higher offer or they are going through a divorce or other major life event. Maybe they just believe that the property is worth more than your offer.  At this stage, you can return with a higher counter offer.

Not having an Agreement in Principle

Our offer was made rather hastily so we didn’t have an AiP (despite me writing a post about them recently!).  Thankfully we were able to get one quite quickly so this aspect did not let us down.

Once you put your offer in, all you can do is wait and see if the vendor will accept but with a bit of pre-planning and research, you will be able to increase the chances of your offer being accepted.

House hunting, part 1: A tale of three houses

We view three properties with an estate agent for the first time, here’s how it went.

As I mentioned last week, we lined up a few viewings last Friday.  We were looking within a town about half an hour drive from my husband’s family.  We quite like this town as it has all the amenities that you need but the town centre still looks delightfully traditional and isn’t too busy to walk around (as much as I love London, the sheer amount of people can occasionally be overwhelming).  My father-in-law came along too for moral and practical support.

It was a beautiful, sunny day, perfect for a day out. We viewed three properties that all cost the same, but were vastly different from each other.

House One

This property had been owned by a couple for nearly 50 years until the husband had passed away and the wife had moved into a care home.  As soon as you walked in, you could tell it had been a cherished family home.

The carpet and wallpaper in every room was dated but in good condition.  There were still a few mementos left behind such as the decorative plates lining the walls and the hand cross-stitched wedding scene hanging proudly as you first walked in.

The downstairs was segmented into a living room, then through a doorway to the dining room, then another door to the kitchen.  Unusually, there was also a large utility room where the washing machine and dryer were kept. The bedrooms were upstairs and all were a good size.  You had to walk through one bedroom in order to get through to the other which felt a bit unusual but was apparently common for properties of the time.

Already fairly impressed with the size of the interior, we were blown away by the garden.  It seemed to stretch on endlessly (well, 150 feet) and was in pretty good condition. The couple had maintained various beds of vegetables however all that was left was a neatly manicured lawn.  There was also a shed and a single garage.

My FIL noticed the neighbour working on the roof of the house next door and shouted out to him.  He gave us a bit more information about the area and how he had extended his own property (which was the same design originally). It was a helpful conversation although I’m not sure if our estate agent approved!

House Two

The next place was further down on the same road and boasted four bedrooms and a huge garden.  It was questionably decorated in the advertised photographs but as I’ve said, we don’t mind spending a few weeks decorating if it means that we get a beautiful home for a good price.

Oh how wrong we were.

We walked in.  The black, glittery, mismatched wallpaper peeling from the walls greeted us. In the living room, glittery decorations, perhaps from a final house party from the outgoing tenants, hung sellotaped to the ceiling.  The light switch was screwed in sideways.  My husband liked that, “It reminds me of when I was at uni”.  The downstairs toilet hadn’t been cleaned in months and that was apparent without lifting the lid.

The house had a huge kitchen (decorated with glittery butterfly wallpaper this time) however there were gaping holes from where the whiteware had been ripped out.  There were more holes in the ceiling, this time from leaks that had gone unchecked for too long.  The sink area, at first appearing tiled, was actually tile wallpaper.

The garden was one of the highlights of the property and although had a lot of rubbish to be cleared, was in reasonable condition.  I stepped in something and my foot couldn’t move.  I asked the estate agent what it was, he just shrugged and laughed.

Upstairs, there were four good sized bedrooms and a bathroom.  There was nothing much to say about them aside from needing redecorating.  There was also a good-sized loft.  The estate agent invited us to go up and look, we declined.

All in all, this place would have been perfect for someone who had money put aside and the expertise to restore the home to a liveable standard.  We however, weren’t in that position so it was a hard no from us.

House Three

We took a break and had lunch at a local pub on the river before going to view the third and final property for the day.  The town is really lovely and I do enjoy spending time here, especially when the weather is so nice.

The third house was in a housing estate built in 2004 so a fairly new build.  The previous owners had owned it since new and were upsizing to a larger property.

The place was really well presented and in great condition.  It had three bedrooms and the master bedroom had it’s own ensuite.

The garden was a bit small but in tidy condition.

There was nothing wrong with this place yet my husband and I weren’t excited about it.  I guess it was just too perfect? My FIL said “This would suit your sister in law perfectly but, and I say this with love, you two are weirdos and are looking for something a bit different.”

His explanation was perfect, we were looking for something a bit different and we would have had no idea that that was what we wanted until we had viewed these properties.  We now have a much better idea of what to look for when viewing listings and organising further viewings.

 

 

Are we ready to buy a house?

I was exploring Pinterest the other evening and found a thoughtful article by Kristina a few years ago at Cents + Order about the questions you should ask yourself before buying your first home.  I took some time to ponder them and my answers are below.

Have you saved a deposit?

The short answer is yes, we have.  Is it enough? To be honest I don’t think you can ever save too much.  The article and many other websites recommends a 20% deposit.  There are many benefits to having a larger deposit including better mortgage interest rates, meaning you’ll pay less interest over the life of the loan and better protection in the event of another crash because you’ll own more of the property.

Mrs Frugalwoods says:

The smarter way to go is a 20% downpayment, which ensures good rates on a “conventional” mortgage. If you can’t put 20% down, it’s probably a good idea to keep saving. A solid downpayment signals to a lender that you’re a responsible saver and reduces the chance that the property will be worth less than the loan’s outstanding value in the future.

Although occasionally a 5% deposit will be enough (especially if you use the Help to Buy Scheme and purchase a new build home), the general advice is to save at least 10%

Michelle from Money After Graduation says:

In order to keep extra cash in your monthly budget and protect yourself from volatility in the real estate market, you need to put at least 10% down on your first home. Ideally, you’d put 20% down, but with the average house price in Canada nearly $500,000, there are very few 20- and 30-somethings with a spare six-figures lying around. A 10% down payment is enough to lower your monthly mortgage payment, reduce your mortgage default insurance, and secure enough equity in your home to whether small dips in the real estate market.

So really, saving the deposit is only the first step in deciding if you are ready as there are going to be lots more expenses along the way.

Will you be happy in the same house for many years?

Putting emotion to one side, it’s recommended that generally you keep a house for five years to avoid a financial loss through the closing costs and so you’ve started to make a dent in the principal of your mortgage.

Moneyning says:

Usually, it isn’t until you’re about five years into paying down your mortgage that you’ve made enough progress on the principal to make it a better deal than paying rent each month.

I’ve moved around a lot in my twenties. Aside from my childhood home, our current rental in London is the longest I’ve lived anywhere and it has seen us through some of the highlights of our relationship including getting married and having a baby.

I’ve talked about the emotion behind owning a home but one of the reasons we started looking for our own home is that we feel ready for a larger place.  We have talked about what we want from a new home and been using these criteria when booking viewings.

Ideally we want to buy a house that we would stay in for at least 10 years.

Are you handy (or not handy)?

dane-deaner-284390-unsplash
Just a splash of paint and she’ll be good as new!

Unfortunately not.  We won’t be building our own studio space a la Mr Money Mustache (although to eventually have a space like that would be awesome!).  Older houses can be beautiful and have character too.  Sometimes they can also be cheaper due to the cost of modernising. For this reason, there are some places that we would skip viewing if it looked like there was too much work to be done.

If we were to consider an old home to do up, we would need to carefully weigh up the cost of the repairs with how much value they would add to the place.  Cosmetic renovations like painting and decorating would be cheaper and we could potentially learn how to do that ourselves (you can learn anything from Youtube these days, right?)  Major structural work would cost a lot and not add very much value to the property (but make the house far safer and comfortable to live in).

Michael Holmes, author of Renovating for Profit says:

 Buyers should be looking for “the worst house you can find on the best street you can afford” and consult a builder or structural engineer when putting a renovation budget together – although project managing the process yourself (ordering materials, liaising with the relevant trades and generally moving the project along) could save you 15-20% of the total cost… Most importantly, he adds: “Leave money in the budget to make structural repairs, and to make sure [the property] is warm, dry and weather tight.”

Since we would almost certainly need to hire contractors to do the work, we will most likely try to find the not-worst house on the best street (not quite as catchy!)

What will it cost to live there?

This includes many upfront costs when purchasing the property such as:

  • stamp duty,
  • valuation fee required by the mortgage provider,
  • surveyor’s fee (to ensure you haven’t bought a place that has hidden problems)
  • solicitors fees,
  • land registry fees
  • electronic transfer fee of £40-£50 that covers the lenders cost of transferring the mortgage money from the lender to the solicitor.

Once we eventually purchase a property, some of the expenses we would then need to think about would be:

  • moving costs
  • furniture costs (our families have a lot of hand me down furniture in excellent condition and we intend to purchase secondhand off Gumtree but will still need to have some money in the budget for this)
  • mortgage payment
  • home and contents insurance
  • council tax
  • utilities
  • transportation from the new location
  • ground rent if we chose a leasehold property
  • childcare costs

As you can see, quite an extensive list.  I believe once we’re in a new home, we’ll be able to make the monthly expenses work like we always have done.  The closing costs are probably going to eat a bit into our savings which means less money to go towards the deposit so we will need to remain diligent with our savings.

Do you have what you need to furnish and care for a home?

The dream is once you have bought your home, you can let your imagination run wild and have multiple Pinterest mood boards dedicated to every area of the place, all perfectly coordinating.

The reality is, coming from a partially furnished rental property, we are going to need to purchase a few large bits and pieces such as a bed and bedroom furniture and seating for the living area.  We won’t do this all at once, and as I mentioned before, we have very generous extended family who will help us out with some of it.

I’m only thankful that we’re not moving to a homestead from the city like the Frugalwoods did.  Each month Mrs Frugalwoods update us on their monthly expenditure and although they’re doing it frugally, there are some absolutely massive expenses on their lists!

Do you have an emergency fund?

Emphatically, YES! Writing this article has alerted me to the sheer number of additional costs associated with home ownership. As Kristina says in the closing paragraph of her article:

Home ownership is a serious investment that can come with unexpected expenses if you are unprepared. Consider the neighbourhood, your life plan, and whether you can afford all aspects of home ownership before you buy your first home.

We are continuing to work hard to achieve our dream of home ownership and by doing exercises like these and taking time to properly consider our circumstances, we become more prepared to make the leap.

Thanks for reading! What questions did you ask yourself before purchasing your first home? What other questions should we be asking ourselves?

 

 

 

Reflecting on our experience of Shared Parental Leave

On Friday my husband spent his last day at home caring for our son.  This week our little boy started with his childminder and my husband returned to work.  He’d met up with his colleagues for after work drinks on the Thursday and had a chat with his managers about his role returning to the company.

I’ve taken some time to reflect over the past 10 months of our shared parental journey and share my thoughts with you.

One thing I’ve been very grateful for has been the positive reaction to our decision.  Sometimes you read articles where women have been ‘mummy-shamed’ about their decision to return to work early or the father is questioned why he isn’t providing for his family (the internet can be the worst sometimes).  We have received no judgement from family and friends or our workplaces and we feel incredibly lucky for this.

One of the main reasons we chose SPL was financial.  Since I am the main breadwinner, I was keen to get back to work once my maternity pay had dwindled. As it turned out, we had saved enough to safely cover emergencies (thank you PF/FIRE community!). Good thing too as we had to purchase a new car and pay a one month deposit to the childminder.  Would we have done SPL if my husband earned more? Probably as there have been other benefits too.

My husband has had a valuable chance to bond with our son and develop his own style of parenting.  We have different approaches and sometimes I question why he is doing something a particular way but then I have to stop myself.  His way is no less effective than mine, only different so I have learnt to respect his judgement more.

Some of the downsides have been I have lost some of the friendships I had developed when I was on maternity leave since going back to work now that I can no longer hang out on weekdays.  Some may say this isn’t much of a loss but I do miss having people to talk about parenting with and children of a similar age for my son to play with. Thankfully I still have a couple of people that I still get to see on the odd weekend and of course all of our other friends, with or without children!

Setting up SPL was a bit of a pain as it is still reasonably new and there was a bit of paperwork to complete.  We almost had to be experts ourselves before approaching our HR departments.  There was an issue with my first month’s pay back at work full time as I hadn’t been put back on payroll so there was a flurry of activity and a lot of anxiety on my end as they sorted it out.

I think my husband found the change of pace challenging at times and although the landscape is changing slowly, he would still sometimes be the only man at our son’s activities. We also had to consciously make time for each other, rather than just ‘changing shifts’ when the other parent got home from work.

Overall though, it’s been an amazing experience and I highly recommend looking into it, even just to give yourself more options when deciding on childcare.  I have had colleagues of both sexes ask about how we set it up and about our experiences and I hope we can help them as they decide the best course of childcare for their families.

More information about Shared Parental Leave can be found at:

https://www.gov.uk/shared-parental-leave-and-pay

http://www.acas.org.uk/spl

https://www.maternityaction.org.uk/advice-2/mums-dads-scenarios/shared-parental-leave-and-pay/

 

The emotion behind owning a home

We visited my husband’s friends over weekend.  I had heard a lot about the guy as my husband plays in a band with him so it was one of those situations where you feel like you already know the person despite having never met. He and his wife have a son who’s a little older than our boy. We had a lovely time watching the babies play, eating delicious food and playing board games.

They bought their home approximately two years ago in an area neither of them had heard of approximately one hour’s drive from London. The area seems to have had an influx of new build properties in various states of construction as we drove through. They each commute half an hour to their jobs.  When I asked why they had chosen that particular area, the deciding factor had been the size and quality of the house they could afford.  Indeed, as we sat in their open plan kitchen-dining room and looked out into their large backyard, I could hardly argue.

We are still deciding where we want to live but sometimes I wonder whether we would be better off continuing to rent.  My favourite blogs are asking the same questions and I wanted to share some of the more thought-provoking posts I have read on the topic.

On Monevator, which is one of my favourite UK personal finance blogs, they wrote two articles on either side of the coin:

Reasons to buy a house instead of renting

Reasons to rent a house instead of buying

Some of the reasons to continue renting were:

  • The ongoing cost of repairs, insurance and furnishing your own property
  • The cost of a mortgage and the associated interest
  • Buying a house ties you down to an area which may improve or deteriorate as time passes
  • House prices could crash in the future.

On the other hand, reasons for buying included

  • There will be an eventual end to the mortgage payments
  • Having complete freedom to do what you like with a property and not worrying about landlords
  • Mortgage interest rates are historically low at the moment
  • The house price will potentially increase in the future

Across the pond in Canada, another one of my favourite blogs, Money After Graduation, set Twitter alight with a tweet about home ownership which inspired her own blog post on the Rent vs. Buy debate.  After running the numbers, the final conclusion was that the numbers work out roughly the same however buying one’s own property has it’s own significant emotional benefits.  I particularly liked this quote from the article.

Homes are emotional investments even more than they are financial ones. For most people, buying a home symbolizes adulthood as much as it does a retirement plan.

Ultimately, I think it is a personal decision.  Although we still consider renting a larger home or perhaps trying out a new area, we very much have our heart set on owning our own home.

Did you have your heart set on buying and then change your mind?