How do we know our maximum we can offer?

[NotJustACigar]

A house we love is on the market at £289,000 and we are going to view it today. It's been on the market for six months and has dropped in price from £299,00 recently. The EA has told us the owners are motivated because they've found a place they want to buy. However they also say another couple is booked in for a second viewing today. Of course we don't know whether there is any truth behind the second viewing couple or if its just a tactic to make us rush?!

We will offer £250k fully expecting it to be rejected. If/when it is, we will consider going slightly above the stamp duty threshold. We only have £30k down payment due to losing money on our last house sale. But we have a good income (70k combined and I have a review panel in May where I am very likely to be promoted raising out income to £80k combined). We have a mortgage agreed in principle for £250,000. We also have a relocation package from work that will pay for the survey, solicitors, moving costs etc but not the stamp duty.

I'm thinking the highest we can possibly go is £272,000 and get the stamp duty added to the mortgage. Does that sound like a crazy plan? We don't have any DCs and our car is paid for. We have overdraft facilities of 5k in case of emergencies. And we absolutely love the house.

[Anniegoestotown]

Stamp duty rises to 3 % on purchases over £250k not at £250k.

At £250000 your stamp duty would still only be £2500.

If you purchased a house at £250001 then the stamp duty would be £7500.03.

Please don't offer £250000 it would just get the owners back up and would be embarassing. It would also close you off from any further bids because you would not be taken seriously. Personally I would go in with just under what you can afford and explain it is your full and final i.e. £270k also explaining the position you are in, that you are able to move quickly, have your mortgage in principal etc. Then if the answer is a no then you can always add the xtra £2k on and then walk away if it is not accepted.
Don't forget the couple who are coming for a second viewing might not be in the same position as you.

[KarenBrockman]

I would go for a house that needs work at £250k personally in your position.

[HoleyGhost]

Whatever the reasons you have for not having much of a deposit, are any likely to recur?

[ihategeorgeosborne]

You never know, George Osborne might remove the cliff edge for stamp duty on houses just over 250k in the March budget. I doubt it, but you never know!

[NotJustACigar]

Holey, no, considering one of the main ones was DHs divorce before we met! That plus the house we lost money on was abroad and we will never buy there again. Anyway even if the market went down and I terest rates went up on this one it wouldn't matter as we would be planning to stay at least 20 years in the house barring health stuff.

[whineaholic]

How did the viewing go Notjust?

[NoArmaniNoPunani]

You said earlier in the thread that part of the problem was your DH being unemployed for a year. That type of thing could happen again (as it could to most of us)

[NotJustACigar]

It went well, whine, thanks for asking. We're still considering what to do and we have a viewing for another house tomorrow and another on Thursday. Then will decide.

NoArmani yes DH was unemployed as he moved for my work. It would be much more concerning if I lost my job though considering I am the higher earner.

[cunningplan101]

Legal fees are quite a small cost in the scale of things - so I wouldn't let that sway your decision too much. You can get fixed price conveyancing, or even mortgage deals which include the conveyancing fees (although I'm not sure how good the service would be, and it usually comes with a higher interest rate.

House prices are going up, but the saving in interest % for a better LTV is definitely worth considering. It can make a big difference to monthly payments and, over the lifetime of the mortgage, ends up being A LOT of cash.

Or, if you want to take the plunge now, I'd try and get a flexible mortgage with no early repayment charges. That way you can overpay a lot each month, get down to a better LTV soon, and then remortgage on a better rate.

Rather than asking the vendors to pay for half your stamp duty, you could always offer them £250,000 (so pay 1% stamp duty) and then offer them money towards fixtures and fittings, but that can also be tricky tax-wise (see forums.moneysavingexpert.com/showthread.php?t=245199)

[NotJustACigar]

Just thought I'd update to say ... we got the house .

[roslet]

Congratulations! Did you get it for 250 in the end? That would be amazing!

[NotJustACigar]

No fraid not. £270k and managed to scrape together enough for stamp duty. We will have to live with the hideous carpets and unfortunate paint colours etc for a while as no money left to redecorate but it will be worth it in the end. Thanks for the congrats .

[Wormshuffler]

Yet! I love it when a plan comes together!

[Wormshuffler]

That's yey, not yet....

[HaveToWearHeels]

well done OP, I have just read your thread and would have been another one advising to buy the best house you can. We have really stretched ourselves every time we have purchased and are now in our forever home which is worth at substantial amount at 41 and 44. We have both lived through dips in the market and I have got through interest rates at 15%. Enjoy your home.