Managing My Money

Week 6: Housing & the Household Balance Sheet - Part 2, Episode 12

Share Radio & Open University Business School

'Money is kind of a base subject. Like water, food, air and housing, it affect everything ..'

Robert Kiyosaki

Welcome

to Managing My Money presented by Annie Weston and Glen Goodman

Leasehold ..

You pay ground rent and service charges - and council tax
A management company looks after utilities, maintenance and insurance on behalf of the Freehold owner
Any increase in capital value goes to the Freehold owner

or Freehold?

You are responsible for upkeep, utilities and council tax
Can get complicated if it's a flat: eg 'Commonhold'
It's your asset and any rise in capital value goes to you

You purchase the right to live there

It's yours! You own it

Back to the Financial Plan:

How much deposit can you raise? What can you afford each month?

Think about those mortgage alternatives

Fixed Rate
Variable
Shared ownership?

Then use a mortgage calculator to check how much mortgage loan you can borrow ..

Now you can go house-hunting ..

In due course, it'll be time to review your mortgage

When the fixed rate or starting terms run out, you could find a cheaper alternative
If your Loan to Value ratio has improved, you could get an improved interest rate

'Buy to let' - investing in property

Incoming rent can cover your costs, including your mortgage payments
Any increase in capital value is yours: but you must pay Capital Gains Tax when you sell (not charged on your own home)
Often works best for those in the building trade

It's time to put it all together into your Household Balance Sheet

Here's what the template looks like ..

which gets you from here .... to here

Watch your Current Asset Ratio and your Net Worth to check your risk exposure

Take the Week 6 quiz/test at www.shareradio.co.uk - as you take each week of the course, your results will build up on your personal dashboard.