Mortgage, property bleg
June 29, 2009Apparently a “bleg” is a dreadful portmanteau word describing begging on your blog.
I think we really are going to buy a house, for possibly quite silly reasons. I’m tired of being cold in winter, and the landlord has no incentive to insulate the place or install proper heating. Also, I HATE moving, so if we’re really going to move, it had better be to a place we own. And it seems that we may in fact be able to afford a non-freezing non-hovel withing a reasonable distance from town. It seems to me that now may not be a great time, but it’s probably not terrible either. And we talked to a bank today and they will lend us some money.
Anyway, if you bought a house recently (or perhaps deliberately refrained from buying a house) what do you wish you had known?
Che Tibby
Stephen
Frugal Me 
bought a house recently, but not in NZ. Anyway, I wish I had spread the mortgage over the max number of years possible, instead of getting annoyed at how much interest the bank was charging and therefore deciding to make life harder and take it for only half the time.
No particular advice on buying a house but re being cold- I love the heatpump we got last year. It’s a huge improvement to my lifestyle and I wish we’d installed one years ago.
I’ve been admiring other people’s heat pumps and I’m sure I would love yours 😀
That’s the kind of improvement that no Wellington landlord ever makes.
We bought about 7 mths ago, just when market and rates were beginning to slide. No regrets at all. Love being able to do things like mount TV on wall, add underfloor insulation etc etc etc without asking the Landlord! We had a great LL, but nothing beats owning our own place. Now’s an even better time to buy IMHO.
As far as mortgage goes, went for 6mths fixed term and just re-fixed into smaller parcels of different rates. I can highly recommend John Bolton [JB] at Squirrel for sound advice and assistance for 1st home buyers. http://www.squirrel.co.nz
Read the house inspector’s report very very carefully, and don’t trust it. That mistake cost us a full rewire of the house, plus the lost ability to bargain the price down.
I’s 2nd what Michael said. My mother-in-law got an inspection when buying and they didn’t bother to check under the house. Bathroom floor all rotten and water pooling etc etc etc etc. We were looking at a house at the same time and got my father in law to check it (he is a builder) the whole baseplate was rotten and many of the joists (too we didn’t buy it
If you have any builder friends, buy them some beers and get them to poke around any prospective house.
As for heating, we’ve got a wood burner which we’re happy with, but if we had the choice again it would be a toss-up between a heat pump or a pellet burner.
No matter what heating you choose, it will make you poor but warm.
Get an inspector with a reputation for being ‘anal’, we have our report somewhere and would be happy to send his details (assuming thy haven’t gone under).
Also hedge your bets with the mortgage, we have a fixed-portion and a floating (line of credit thing) one. This gives a great place to store any surplus cash. If I were to do it again I would have split the fixed into a few chunks too with varying maturities.
course, with rates as low as they are perhaps fixing for a trillion years is the best bet.
Make sure you have a solicitor who you trust to do this, we had a referral and he was useless. To the point of being embarrassing to his firm. Again, happy to give a referral.
Agree with everyone who said get a heat pump. Very cost-effective and keeps the damp down. Definitely worth the money!
the trick with heat pumps is not to skimp on the size. go slightly larger than you need, and you’ll save in the long run.
apparently the problem is that if your pump is too small (or only just enough), it runs overtime and can freeze solid. which stops it altogether. big spate of that a few years back.
We put a wood burner in, 1st thing we did, it is excellent, our house is always warm, wood is affordable if you buy it in summer and let it season until you need it in winter. We also installed a heat transfer so the whole house benefits from the warmth of the fire 🙂 I recommend the econo-heat panels from the dvs shop in Ngauranga, we have 2 big ones and a small one. The small one runs from 6pm to 8am, the big ones run from 11pm to 7am, our power bill is very affordable, the initial outlay is worth it. We had a very through inspection done, they went in the attic, on the roof and under the house.
Never having bought a house, but having lived in a few: work out how much you absolutely need at a bare minimum to feel comfortable. And then go a little above that, but not a huge amount. It may or may not be your problem, but some people spend more than they need on rooms and floorspaces they don’t actually have much use for (of course they find ways to fill them).
Of course, your needs might change at a later date. But even then, you can move, or if you buy a good quality small place with enough land you can expand it a little. And nothing is perfect so you can add improvements later. At least that’s the theory – YMMV.
We love our woodburner but it’s a lot of work, if we both had day jobs outside of the house we wouldn’t always be crazy about coming home to a cold house and having to start the fire. It can be an enormous money saver, though, if you’re willing to put even more work in and forage for wood. And when it’s really cold a heat pump won’t get the house as comfortable and toasty, if you’re into that.
I can just echo all that has been said above about getting the house checked out by someone trustworthy (NB insurance companies care a lot about whether houses built I think before 1930 have been rewired or have an electrical safety certificate – in fact you might be well advised to give your insurance company a call to ask what things they care about when you are insuring your home – you can end up with HUGE problems if your insurance co. won’t insure you and insurance is required for your mortgage).
I would also second the comments about installing decent heating (AND insulation) – it is important to have a heat pump/pumps that are appropriate for the area they are heating.
Real estate agents…hmmm…the majority of them are serving one person, and one person only – themselves (making a quick sale…). Soooo if you ask a question about the house (esp about additions, structure, wiring etc), and they fudge it or claim they don’t know the answer, then alarm bells should be ringing in your head about now…. if you are really interested in the property make sure you ask whoever is doing your inspection to have a special look at that particular feature…
Get a LIM (Land Information Memorandum) – I don’t know what the deal is with getting these from WCC but they can save you a lot of time and money – read it thoroughly and talk it through with your inspector/builder. They can warn you of any issues relating to your own and surrounding properties.
Finally, think about what how you use your current and past homes. Our first house had a tiny kitchen and living area, both of which were at the back of the (north facing) house. For a couple who love entertaining, we’ve found the lack of space a real constraint (especially that there was no room for a dining table). We’ve just brought a larger place with a great open plan living/kitchen that I’m sooo looking forward to cooking in…
Oo actually one more thing (truely). Make a list of things that you really want in your new property and decide what are must haves and what are compromisable. Then when you are looking around you have a easily referable list so you don’t get caught up in the ‘romance’ of a place, to remind you of the things that really matter.
Good luck with the house hunting!
If you have a stable job, with no redundancies on the horizon, e.g teacher, nursing, police, then now is a good time to buy.
When asking for the LIM at council, a more indepth option is to get a copy of the property file (order on line, a CD sent out to you for around $50, well, for the Auckalnd councils, assume it is similar for WCC). In my experience (as architectural designer) the property file will have previous building consents and correspondence for the property as pdf files. So you can tell if alterations have been legally made, what year, and the details of construction ( e.g. if the plaster cladding has a cavity behind it so that when it cracks the water drains away rather than rotting out the wall framing). Sometimes you get interesting letters like the neighbours complaints about the water run-off from your property flooding theirs.
The other thing to look for at council websites is the GIS viewer. Some councils have this online, others you have to pay. for example http://maps.auckland.govt.nz/Alggi/ This has the aerial photo, land contours, town planning zone, public sewer or stormwater drains that service the property etc. WRT to doing future additions, most councils are expecting older houses with dodgy stormwater disposal (such as into the sewer or street kerb) to be upgraded when you do new work. If there is no public SW drain near the property things can get interesting, ie expensive.
Most this info will be in the LIM, but it will give you the broader picture of the whole neighbourhood. Your house might be in a standard residential zone, but this will show you if the house it backs onto is in a high density zone, subject to infill housing etc.
My maximum when looking to buy is to remember that you can potentially change anything in the house, or on your property. You can’t change the orientation to the sun, its location wrt surrounding community and the schools, shops, and services, and you can’t change the neighbours or their houses. When inside the house, you often spend more time looking at the neighbour across the road that looking at your own house. However, sometimes the neighbours can change their trees, which might have bad effects on your sun or privacy. The best trees are the ones on your property, since you have control over them, unless they are too big then the councils usually have their say in the matter too. But don’t get me started on the councils… I’ve probably said enough already.
And of course, insulate the ceiling first – heat travels upwards. Lay the batts over the rafters/truss, and don’t suffocate any downlight fittings – they overheat.
I do know that the LIM doesn’t tell you everything
Bit late with the commenting but hopefully still useful (that’s what happens when your life is turned to chaos with a newborn baby, you quit reading your regular blogs for weeks on end):
Capital House Inspections I can recommend – they inspected the house we bought and gave us the opportunity to inspect it with them to see what they were doing, so we could see them clambering on the roof and inspecting the foundations, and they gave a running commentary on issue as they went – and they gave a pretty comprehensive builders report, with photos of issue and suggestions on when and how maintenance could be done.
Also when looking at buying a specific house work out the total cost over the mortgage/weekly outlay – e.g. factor in the decreased weekly cost of living in zone 2 of the public transport rather than in zone 3 – and over the long run public transport and petrol prices are likely to go up whereas if you frugally put money on the mortgage it goes down…
My understanding is that RE agents are legally required to disclose everything they know about the house such as dodgy wiring if asked – so make sure you ask the right questions of the RE agent – e.g. do you know of anything that may affect my decision to buy this house etc.
Oh, and one way to save on your lawyer having to search for certificate of title is to ask the RE agent for a copy for any house you’re keen on – then you can give your lawyer that copy to check, rather than the lawyer searching for it. In fact, ask the RE agent for all their info – generally they have quite a bit of stuff and it saves you searching it all.
Owning is so much better than renting. The bank doesn’t come and check that our oven is clean every three months. Nor does the bank care how many pin holes we have in our wall, or if we use blu-tack.
The average condition of owner-occupied property with things such as insulation and dishwashers vis a vis rental property in this country is astounding. It’s like 2 different sets of housing.
Real Estate Agents are salespeople, not house/building/land people. They understand the market, not the goods.
The LIM is worth it – go through the house with it in your hand and look for alterations that don’t appear on the LIM.
Keep an eye on the WCC public notices webpage to see if there are any notified resource consent applications close by. This gives you an idea of what’s going on in your area – new supermarket, apartment block, demolition etc.
Check with WCC what kind of road it is. If it’s a collector or sub-collector it will probably be busy late into the night.
Underfloor ventilation is a must. It helps prevent rising damp and black mould. If you can’t access the underfloor area, don’t buy the house. Make sure your builder/building inspector crawls around under there.
Make it a condition of purchase that the house is professionally cleaned the day before settlement.
Ask questions of the vendors. Make the questions broad, e.g. what work needs to be done on the house in the next 5 years, what problems have you had, that sort of thing.
I don’t have an NZ house but I know exactly what you mean about insulation. It is like living in a shed.
But I also don’t really get these heat pumps…
aren’t they just electric heaters?
I don’t like the blast of warm air and I don’t like that there’s usually only one in the house and it’s expected to warm the entire property.
Look for Enlish-style radiators and heating… it’s great.
No, they’re not just heaters. They work on the same principle as refrigerators and airconditioners, except in reverse. In theory they can produce much more heat per unit of electricity than an electric heater.