Need some help with some important decisions

[rabbitstew]

Going to go against the grain on this one.

 

Have you got the new job? As people have said, you will be on probabation for anything up to 6 months (my current job I've just completed 5 months probation). Why not live at home until then, run the 350z as a commuter (I used to commute 35 miles each way in the 350z), and see how it goes? Last thing you want to do is sell the Zed, commit to a mortgage and running costs of a house and then possibly find you dont like the job or other reason not to complete probation. Then you will be left with all of the costs and no fun trying very quickly to find a new job?

 

Plan at the moment is to spend no more than £2k to get a economical car for the commute and use the Zed at the weekends.

 

If I get the job then I will have the car ready for the drives - and until then I'll probably only have to fill it up once a month with my current commute.

 

As for renting vs buying - I really don't want to rent, it feels like throwing money down the drin and will just make it harder when saving to buy somewhere.

 

Spending £2k on a car, then tax, insurance, mot, tyres, servicing..... you will have to do a lot of miles on the zed before that actually works out "cheaper". My old car was a Golf TDI which was worth about £2500. Including tax / insurance / mot / tyres / servicing and diesel it worked out it would cost me about 15p a mile based on 20,000miles a year to run it as a 2nd car. My zed currently costs me about 30p a mile just on petrol, tyres, servicing. Assuming over a 12 month period the shed looses £1000 in value, then id have to do over 6666 miles in it before it would start saving me money over using the zed. Then if you think you may need a new cambelt on the other car (400quid odd), and maybe something else goes wrong, it ends up actually not saving you anything at all.

 

Renting..... well you either pay (for example) £500 a month to rent somewhere, or £500 a month in interest to line a banks greedy palms for your mortgage. Then, with property prices falling, i know people whose houses have dropped by 25% this last year alone, so on a 150k house thats £37500 you have just thrown away over 12 months. Of course, people say that over the long term property goes up in value... and it does.. but it would have to go up by a hell of a lot to give you a better return over what you are paying in interest on the mortgage.

[gangzoom]

Spending £2k on a car, then tax, insurance, mot, tyres, servicing..... you will have to do a lot of miles on the zed before that actually works out "cheaper". My old car was a Golf TDI which was worth about £2500. Including tax / insurance / mot / tyres / servicing and diesel it worked out it would cost me about 15p a mile based on 20,000miles a year to run it as a 2nd car. My zed currently costs me about 30p a mile just on petrol, tyres, servicing. Assuming over a 12 month period the shed looses £1000 in value, then id have to do over 6666 miles in it before it would start saving me money over using the zed. Then if you think you may need a new cambelt on the other car (400quid odd), and maybe something else goes wrong, it ends up actually not saving you anything at all.

 

+1 Buying a 2nd car will not save you any money, especially if you still have a outstanding loan on the Z. It will make more sense to pay the loan off on the car, but remember as with any car it will always depreciate with time, so when it come to selling the Z you almost certainly "loss" money.

 

Running a house is ALOT more expensive than simply paying the mortgage, and once you see how much money the banks are making from the mortgages your be wanting to pay it off ASAP. Having said that if you can manage to pay your mortgage back quickly (over payments) it leaves you in very good financial ground, with house prices pretty flat its actually a reasonable time to buy...but ofcourse these days you need a pretty big deposit to get on to the good mortgage deals.

[ianphampton]

Going to go against the grain on this one.

 

Have you got the new job? As people have said, you will be on probabation for anything up to 6 months (my current job I've just completed 5 months probation). Why not live at home until then, run the 350z as a commuter (I used to commute 35 miles each way in the 350z), and see how it goes? Last thing you want to do is sell the Zed, commit to a mortgage and running costs of a house and then possibly find you dont like the job or other reason not to complete probation. Then you will be left with all of the costs and no fun trying very quickly to find a new job?

 

Life has got to be fun . . . and the car is part of that.

 

When I first got married, we committed to the maximum mortgage we could to get the maximum house we could and progress up the property ladder, then we moved and did it again

 

I spent 15 years being skint as all the money went into the mortgage and the house, we went on cheap holidays as it was all we could afford and so on. I couldn't afford a nice car.

 

Keep the Zed, keep some sort of life and don't over commit to a mortgage. That way you have a life and some spare cash to enjoy life.

 

Buy the house / flat later, perhaps with you and the gf together, but keep some disposable income so you're not on the treadmill giving your money away paying mortgages.

 

As George Best said in response to the question "What did you do with all your money, Mr Best?" "I spent 75% on wine and women - and the rest I just wasted"

[rabbitstew]

 

Life has got to be fun . . . and the car is part of that.

 

When I first got married, we committed to the maximum mortgage we could to get the maximum house we could and progress up the property ladder, then we moved and did it again

 

I spent 15 years being skint as all the money went into the mortgage and the house, we went on cheap holidays as it was all we could afford and so on. I couldn't afford a nice car.

 

Keep the Zed, keep some sort of life and don't over commit to a mortgage. That way you have a life and some spare cash to enjoy life.

 

Buy the house / flat later, perhaps with you and the gf together, but keep some disposable income so you're not on the treadmill giving your money away paying mortgages.

 

As George Best said in response to the question "What did you do with all your money, Mr Best?" "I spent 75% on wine and women - and the rest I just wasted"

 

Thats very sound advice. When I bought my house i didnt stretch myself. My mortgage was twice my income. Not cos i was earning loads, but i bought a cheap house. I could have got 5 times my income if i wanted, but i wanted a safety net. That meant I could still keep my motorbike as a fun toy whilst i did the house up and paid the bills.

[Greeny]

As a wise Tom Selleck once said.. well the other night actually

if you ever cant afford the car payments and mortgage payments. Pay the car as you can sleep in the car but you cant drive your house to work!!

[chrisgunton]

Im holding off on the flat/house for the moment! That isn't an issue anymore. Plus I'm not struggling to pay off the loan payments - nothing is a struggle!

 

The £2k I'm looking at spending on a car is the TOTAL including the insurance and tax. I've been sitting on the cash for a while with nothing to spend it on. If it keeps the Zed safe during the winter and makes my current commute to work extremely cheap then I think it's a wise idea.

 

Nothing is set in stone yet - need to see just how much extra it will cost to insure. I'll find that out and go from there.

[AK350Z]

Running a second car isn't cheaper than running the Zed to work, It just saves wear and tear/mileage on it.

[Greeny]

Running a second car isn't cheaper than running the Zed to work, It just saves wear and tear/mileage on it.

Really? if you had a cheap diesel you would more than half fuel costs. and if he pays the insurance off using the "free" 2k he claimed then i wouldnt count that as a cost

[Sarnie]

Going to go against the grain on this one.

 

Have you got the new job? As people have said, you will be on probabation for anything up to 6 months (my current job I've just completed 5 months probation). Why not live at home until then, run the 350z as a commuter (I used to commute 35 miles each way in the 350z), and see how it goes? Last thing you want to do is sell the Zed, commit to a mortgage and running costs of a house and then possibly find you dont like the job or other reason not to complete probation. Then you will be left with all of the costs and no fun trying very quickly to find a new job?

 

Plan at the moment is to spend no more than £2k to get a economical car for the commute and use the Zed at the weekends.

 

If I get the job then I will have the car ready for the drives - and until then I'll probably only have to fill it up once a month with my current commute.

 

As for renting vs buying - I really don't want to rent, it feels like throwing money down the drin and will just make it harder when saving to buy somewhere.

 

Renting..... well you either pay (for example) £500 a month to rent somewhere, or £500 a month in interest to line a banks greedy palms for your mortgage. Then, with property prices falling, i know people whose houses have dropped by 25% this last year alone, so on a 150k house thats £37500 you have just thrown away over 12 months. Of course, people say that over the long term property goes up in value... and it does.. but it would have to go up by a hell of a lot to give you a better return over what you are paying in interest on the mortgage.

 

I'm sorry but that's utter rubbish.

 

A £500 a month mortgage is not £500 of interest. A certain % is capital unless your on interest only. Even if a property loses 25%, it's only relevant when you sell. If you sell in 10 years times, it's value 9 years before that is wholly irrelevant. House prices are not like car depreciation; they actually go both ways

 

If someone rents for ten years, thats 120 rent payments (120 x £500 = £60,000) down the drain. A 100% waste of money. There is no return on that money. If you bought a place, yes a % is interest but you may have paid off £25,000 or so and the property may have risen £20,000, thats £45,000 of accessible equity that you have. Even if the house price was the same as when you bought it, you could sell up and get £25k back. What would you get if you were renting for ten years? Sweet FA.

[Sarnie]

Running a second car isn't cheaper than running the Zed to work, It just saves wear and tear/mileage on it.

 

+1

 

You would have to be doing huge mileage to make to cost efficient.

[mbs]

Going to go against the grain on this one.

 

Have you got the new job? As people have said, you will be on probabation for anything up to 6 months (my current job I've just completed 5 months probation). Why not live at home until then, run the 350z as a commuter (I used to commute 35 miles each way in the 350z), and see how it goes? Last thing you want to do is sell the Zed, commit to a mortgage and running costs of a house and then possibly find you dont like the job or other reason not to complete probation. Then you will be left with all of the costs and no fun trying very quickly to find a new job?

 

Plan at the moment is to spend no more than £2k to get a economical car for the commute and use the Zed at the weekends.

 

If I get the job then I will have the car ready for the drives - and until then I'll probably only have to fill it up once a month with my current commute.

 

As for renting vs buying - I really don't want to rent, it feels like throwing money down the drin and will just make it harder when saving to buy somewhere.

 

Renting..... well you either pay (for example) £500 a month to rent somewhere, or £500 a month in interest to line a banks greedy palms for your mortgage. Then, with property prices falling, i know people whose houses have dropped by 25% this last year alone, so on a 150k house thats £37500 you have just thrown away over 12 months. Of course, people say that over the long term property goes up in value... and it does.. but it would have to go up by a hell of a lot to give you a better return over what you are paying in interest on the mortgage.

 

I'm sorry but that's utter rubbish.

 

A £500 a month mortgage is not £500 of interest. A certain % is capital unless your on interest only. Even if a property loses 25%, it's only relevant when you sell. If you sell in 10 years times, it's value 9 years before that is wholly irrelevant. House prices are not like car depreciation; they actually go both ways

 

If someone rents for ten years, thats 120 rent payments (120 x £500 = £60,000) down the drain. A 100% waste of money. There is no return on that money. If you bought a place, yes a % is interest but you may have paid off £25,000 or so and the property may have risen £20,000, thats £45,000 of accessible equity that you have. Even if the house price was the same as when you bought it, you could sell up and get £25k back. What would you get if you were renting for ten years? Sweet FA.

 

Agree 100% - I bought my first house when I was 22, my mortgage payments were nearly 1/3rd of my income at that time but don't forget as your salary increases with inflation and promotion your mortgage repayments become a less and less % of your income. I'd always go for buying over renting if you can afford it, far better in the long run.

[Chris`I]

Definately agree with the others WRT renting vs buying, but I would still say stay at home until you are comfortable and know what you want to do and also how much disposable income you will really have. Dont underestimate how much a house costs to run, it makes the Zed seem cheap

[sparky370z]

Going to go against the grain on this one.

 

Have you got the new job? As people have said, you will be on probabation for anything up to 6 months (my current job I've just completed 5 months probation). Why not live at home until then, run the 350z as a commuter (I used to commute 35 miles each way in the 350z), and see how it goes? Last thing you want to do is sell the Zed, commit to a mortgage and running costs of a house and then possibly find you dont like the job or other reason not to complete probation. Then you will be left with all of the costs and no fun trying very quickly to find a new job?

 

Plan at the moment is to spend no more than £2k to get a economical car for the commute and use the Zed at the weekends.

 

If I get the job then I will have the car ready for the drives - and until then I'll probably only have to fill it up once a month with my current commute.

 

As for renting vs buying - I really don't want to rent, it feels like throwing money down the drin and will just make it harder when saving to buy somewhere.

 

Renting..... well you either pay (for example) £500 a month to rent somewhere, or £500 a month in interest to line a banks greedy palms for your mortgage. Then, with property prices falling, i know people whose houses have dropped by 25% this last year alone, so on a 150k house thats £37500 you have just thrown away over 12 months. Of course, people say that over the long term property goes up in value... and it does.. but it would have to go up by a hell of a lot to give you a better return over what you are paying in interest on the mortgage.

 

I'm sorry but that's utter rubbish.

 

A £500 a month mortgage is not £500 of interest. A certain % is capital unless your on interest only. Even if a property loses 25%, it's only relevant when you sell. If you sell in 10 years times, it's value 9 years before that is wholly irrelevant. House prices are not like car depreciation; they actually go both ways

 

If someone rents for ten years, thats 120 rent payments (120 x £500 = £60,000) down the drain. A 100% waste of money. There is no return on that money. If you bought a place, yes a % is interest but you may have paid off £25,000 or so and the property may have risen £20,000, thats £45,000 of accessible equity that you have. Even if the house price was the same as when you bought it, you could sell up and get £25k back. What would you get if you were renting for ten years? Sweet FA.

 

 

this man makes sense!! listen to him.

 

renting is OK short term, but looking at it as described above. my mate has been paying off 36K of somebody elses mortgage. he has been renting for approx 4 years now. when i ask him why does he rent (as he could easily afford a mortgage) he says the house prices are too high. but in those 4 years he could have been paying off a massive chunk of his house.

 

to me its a total no brainer really

[rabbitstew]

Going to go against the grain on this one.

 

Have you got the new job? As people have said, you will be on probabation for anything up to 6 months (my current job I've just completed 5 months probation). Why not live at home until then, run the 350z as a commuter (I used to commute 35 miles each way in the 350z), and see how it goes? Last thing you want to do is sell the Zed, commit to a mortgage and running costs of a house and then possibly find you dont like the job or other reason not to complete probation. Then you will be left with all of the costs and no fun trying very quickly to find a new job?

 

Plan at the moment is to spend no more than £2k to get a economical car for the commute and use the Zed at the weekends.

 

If I get the job then I will have the car ready for the drives - and until then I'll probably only have to fill it up once a month with my current commute.

 

As for renting vs buying - I really don't want to rent, it feels like throwing money down the drin and will just make it harder when saving to buy somewhere.

 

Renting..... well you either pay (for example) £500 a month to rent somewhere, or £500 a month in interest to line a banks greedy palms for your mortgage. Then, with property prices falling, i know people whose houses have dropped by 25% this last year alone, so on a 150k house thats £37500 you have just thrown away over 12 months. Of course, people say that over the long term property goes up in value... and it does.. but it would have to go up by a hell of a lot to give you a better return over what you are paying in interest on the mortgage.

 

I'm sorry but that's utter rubbish.

 

A £500 a month mortgage is not £500 of interest. A certain % is capital unless your on interest only. Even if a property loses 25%, it's only relevant when you sell. If you sell in 10 years times, it's value 9 years before that is wholly irrelevant. House prices are not like car depreciation; they actually go both ways

 

If someone rents for ten years, thats 120 rent payments (120 x £500 = £60,000) down the drain. A 100% waste of money. There is no return on that money. If you bought a place, yes a % is interest but you may have paid off £25,000 or so and the property may have risen £20,000, thats £45,000 of accessible equity that you have. Even if the house price was the same as when you bought it, you could sell up and get £25k back. What would you get if you were renting for ten years? Sweet FA.

 

I can only go based upon my own personal experience.

 

I rented a house for 5 years, paying £450 a month rent. So thats £27k I paid. I could also afford to save £250 a month up in a savings account which gave me £15k plus whatever the interest was at the time. 5% or whatever.

 

I then bought a house, and the mortgage was £650 a month for the same sized property, I used my £15k of savings as a deposit so I would no longer get any interest on that money. Of that £650 a month, something like £450 was interest to the bank and the £200 was paying off the house.

 

Then after 5 years, I had paid the bank £27k in interest (no return on that money), only paid £12k off the property capital and had not saved a penny as the mortgage was more expensive than renting. I had to also spend about £15k on the house in maintenance as it was a cheap house and needed everything replacing. So, in actual fact, excluding the actual value of the house, comparing rent to mortgage at this point I was actually £18k worse off. If I had been lucky to get a house needing no maintenance then id only have been £3k worse off than renting, but would have to have settled for a much smaller house.

 

As you say, the house value itself is largely irrelevant as all the prices rise & fall over the market, so in my case if my house increased in value, the house id probably want to move into next would also have increased and id have to fork out more for it. On the other hand, people like my brother & my ex missus both bought their houses around 6 years back and now they are both worth 30k less than they paid - but that only becomes a problem should they want to sell.

 

So based on my experience, renting enabled me to save more money and not worry about any maintenance, mortgage or property dropping in price. Of course, everyones situation is different, and in some areas its cheaper to get a mortgage than rent etc. etc.

 

Where I think mortgage would be better is if you have a huge amount of savings or a large income, where you only have a very small or very short term mortgage. That way your monthly expenditure on a mortgage would be much lower than renting and would save you money.

[chrisgunton]

Just a quick update... got the job

[rabbitstew]

Just a quick update... got the job

 

Nice one!!!!!! Congratulations!!!!! As others have said, watch the probation period before you celebrate too much!

 

[Chris`I]

Congrats

[Ebized]

Congratulations

 

Hope that means you can afford a mortgage and the bills to keep a place of your own going and most imporatntly to keep the ZED, - win win I would say

[chrisgunton]

Just a bit more of an update! It looks like I'm starting in Jan as I've asked to stay on with my old employer a little longer to finish up some projects - Christmas is the worst time for me to leave them.

 

It should make it possible to keep the Zed and run a daily driver at the same time, while saving a deposit for a flat. I'm going to look at a Fabia tonight which is perfect for me and really well priced.

 

If I'm wrong then I can always sell the Zed. Having a 2nd car doesn't make it a huge inconvenience as I'll still be mobile.

 

Really appreciate everyones advice!

[Sarnie]

Good work

[Stew]

Good work and call me when you're looking for a mortgage. I'm an AWESOME financial advisor type.

 

 

EFA Liam.

[Ebized]

Good work and call me when you're looking for a mortgage. I'm an AWESOME financial advisor type.

 

 

EFA Liam.

 

 

 

At least we can confirm he dosen't fall within the *anker category

 

Well not on financial matters, but on anything else.............. the jury is out