Items Tagged With over capitalize

We can add the following to the basic 15 Steps To Reducing Your Mortgage:

1. Buy a house rather than a flat
   
   
2. Always keep your monthly payments WITHIN THE MONTH CONCERNED - even a few days out can cost you dear for the rest of the year, or when taking out another loan
   
   
3. Go direct to the lender
   
   
4. Try NOT to take out a mortgage with the same bank that holds your current account - they say that power corrupts and absolute power...
   
   
5. DON'T take out a foreign currency mortgage
   
   
6. Unless you really need to, avoid taking out a long term fixed rate mortgage - rates tend to be high and you almost always never do it at the right time
   
   
7. Don't over-capitalise the property with "improvements" - buy as large a house as you can, rather than one you have to keep adding to
   
   
8. If your eyes really are bigger than your pocket, consider a "split equity" type of deal (more of these later)
   
   
9. Choose well and stick with your decision - like good investments a good mortgage is worth sticking with rather than switching from one fad to another, particularly when you consider the charges involved in remortgaging

Action Points

• Always buy as big a house as you can afford and pay as little as possible for it!
  
  
• Don't over-capitalise the property by adding on extensions, conversions etc, unless you intend to live there for a long time
  
  
• Don't buy a repossessed house at auction until you are absolutely certain of getting the finance for it
  
  
• 4 bedroom houses are always a good buy
  
  
• Look out for properties that are with more than one agent
  
  
• Choose the location with as much care as you choose the house
  
  
• Beware of redecoration carried out immediately before a property goes on sale
  
  
• ALWAYS get a structural and ground survey carried out
  
  
• KNOW YOUR VENDORS - this is the most important "buy" you'll ever make
  
  
• DON'T finalise matters until the lender has agreed that the valuation is fair

I've got to be honest and say that I write much of this with tongue firmly in cheek as our house was a bungalow that had four extra bedrooms, an extra bathoom, large conservatory and very extensive garden works, all done before we moved in 15 years ago. It is certainly not in the best of areas.

However, it is the house that my father built with his own hands for my grandfather, I was born literally across the road in a nursing home and my great-grandfather had a house at the bottom of the road that was probably the best for miles around (it was subsequently torn down by hungry developers for the land). I also have no long term intentions of moving

There are many reasons why we choose a particular house to be our new home. Some are practical, but in truth it is the emotional ones that have an overriding influence:

• A new job requires a move to a new area
  
  
• Your relations, or your partner's relations, live in a particular area
  
  
• One area has better job prospects than another
  
  
• You need to move to cope with a growing family
  
  
• You want to "trade up" (or "trade down") to a different house, or area
  
  
• You want to retire
  
  
• You want a change