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
Next:
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.
Managing My Money
is broadcast by Share Radio and is based on the Open University Business School online course of the same name.
Your presenters are Glen Goodman and Annie Weston.