Cost of buying and selling within 2 years?

B

Bluebean

Registered User
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hi all,

Just wondered what the costs would be to buy now, live in house for approx 2 years and then sell on and buy somewhere else?
We are ftb's, trying to get a leg on the ladder. There is a house that we like and can afford, but we would not want to live there for very long. There are a number of new houses being built in the location we want, these will not be ready for approx 2 years.
Supposing for arguments sake that the property we buy now does not appreciate or depreciate in value over the next 2 years, and we sell it for what we bought it for - what other costs are involved please?

thanks.
 
Off the top of my head .......

Legal fees - approx 1500 per transaction. 2 purchases one sale 4500ish
Possible stamp duty costs if applicable.
Estate agents fees for selling.
Mortgage closure fees when selling the first one.
Loss of preferential interest relief as first time buyer when you move.
Moving costs - removal company etc.
Decoration of two houses.
The real possibility that house prices drop and you get stuck with negative equity in a house you don't want to stay in.
 
also

- add (or subtract) the difference between the interest cost on the mortgage and the rent you would have paid.
- Insurance requirements - house / life / mortgage protection
- possible loss of stamp duty benefit for your next house

and finally - consider how you will manage to pay the deposit on the next house before you sell this house, and how you will manage to time the sale at just the right time to move into the new house.
 
Thanks for the help everyone.

We feel that we want to buy now rather than wait another 2 years.

I just wanted to get an idea of the costs involved, should we buy a house and then a few months down the road we see another house that we would prefer more.

It looks like, worst case scenario we would cost ourselves 10k in fees etc. That is not allowing for property prices to fall - if we did end up in a situation where we had negative equity then we would stay put and ride it out. If prices stabilise or continue to rise, then we would probably cover our costs should we change.

thanks.
 
It's an abslolutely crazy idea IMO.

WHY would you do it?

In expectation of capital appreciation?

You also realise that it's during the early years of a mortgage payback where the majority (particularly in long-life mortgages) of the mortgage payment is infact an interest payment. Ie. the amount of equity you will build up in 2 years will be negligible.

On top of that of course you have the FACTS, that you will lose money on transation costs and loss of FTB status.

And knowing that if you were to rent you would more than likely be paying less than the mortgage payments, you could also make a considerable saving.

Plus, at the minute no one can second guess the market, but planning to buy for just 2 years is trying to second guess the market.
 
The house we are thinking of buying is in a good area, we can afford the payback.
We may not necessarily move after 2 years, but we might. As I said, if the market falls, we will stay in the house. Its not our ideal house, but then does anyone get their dream house first time around?

We have decided that we have sat on the fence for too long, now is the time to get on to the property ladder.
If we wait another 2 years and continue renting, then we have gained nothing but we would have lost close to 20,000 euro in rent.

Again, thanks for the feedback.
 
For what it's worth I think you're doing the right thing. What's the point in waiting till you can afford what you want - how do you know you ever will. All this scaremongering - what's the worst that can happen, like you say you have to keep living there if prices fall, big deal, at least you have a roof over your head.
 
Bluebean said:
The house we are thinking of buying is in a good area, we can afford the payback.
We may not necessarily move after 2 years, but we might. As I said, if the market falls, we will stay in the house. Its not our ideal house, but then does anyone get their dream house first time around?

We have decided that we have sat on the fence for too long, now is the time to get on to the property ladder.
If we wait another 2 years and continue renting, then we have gained nothing but we would have lost close to 20,000 euro in rent.

Again, thanks for the feedback.
Click to expand...
But you're probably going to be pumping in about 20,000 euro to pay off the interest portion of the mortgage in the first two years... This doesn't seem like the right time to be buying a place that you are only planning to live in for two years!
 
Bluebean said:
We have decided that we have sat on the fence for too long, now is the time to get on to the property ladder.
If we wait another 2 years and continue renting, then we have gained nothing but we would have lost close to 20,000 euro in rent.

Again, thanks for the feedback.
Click to expand...

You're panicing now and about to jump in right at the top of the market,in 2 years time you will probably have paid far more in interest payments than you will in rent.You're going to cost yourself a fortune on a house your not happy with and you haven't even bought it yet.
 
thewatcher said:
in 2 years time you will probably have paid far more in interest payments than you will in rent.
Click to expand...
You can work it out using Karl Jeacle's mortgage calculator if you like. Enter the mortgage amount, term and rate and then choose the Annual Table option to see how much interest and capital you will be paying in the first few years. Note that the calculator does not factor in owner occupier mortgage interest relief (up to €4000 @ 20% = €800 p.a. per buyer for FTBs).
 
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