She should have accepted our offer, LOL! - Edited, question in my most recent post

mbga9pgf · 9 January 2009 at 9:48AM

Most importantly, what have you budgeted for interest rates to go up to? 25 year mortgage, I can guarantee they wont be as low as this for that long. Dont get trapped into buying a house which you can only just afford now. You will come against the buffers. if you have a decent deposit, there are some fantastic 10 year fix rates out there. (4.7% with 30% deposit)

My plan is to fix for 10 years at the lowest rate Ican find, saving cash and making overpayments where I can. I get a lump sum gratuity on retirement in 11 years which will easily cover the mortgage.

You seriously need to think about IRs going back up to6-7%.

kunekune · 9 January 2009 at 10:17AM

While I appreciate your concern, affordability is not what we are worrying about. The plan allows for a drop to one income (the mortgage actually ignores the higher of our two salaries) and still leaves surplus to allow for interest rate rises. We're not real FTBs, we've owned houses before just not in this country, so I don't need a lesson in what can go wrong - we lost all in a previous HPC, and have coped with interest rates of 22% at one point. It's about whether to jump quicker than we would otherwise do - ie, before we've saved the ideal deposit - in order to take advantage of a very good mortgage deal. Which is why my question was about a limited time period.

silvercar · 9 January 2009 at 11:36AM

What happens to the mortgage if OH stops working?

If you carry on renting, how likely is a suitable house going to come on the market at the right price in the next 2 years?

What happens if you don't buy and OH stops working before you do buy? Can you carry on renting where you are, will you need to find a different rental, will your needs be different? Will you get housing support from the council etc if OH needs it?

Just points for you to think about, you obviously don't need to post an answer if its too personal.

kunekune · 9 January 2009 at 12:33PM

The mortgage is affordable on my salary (which is higher than OH's, even before he went down to a 4 day week). Our calculations on affordability are based on my income plus the various benefits we get (DLA for one child, carers allowance if OH not working, that kind of thing).

If OH stopped working before we bought, it wouldn't make any difference to what we would borrow or the price range we looked at, but we wouldn't get the benefit of his staff deal, which saves us interest during the time he is there and also means no fees.

We would not be in any financial trouble with our rental should we drop to one income, but it's over 4 floors. If the reason he stopped was mobility rather than redundancy (but hey ho, hopefully the latter won't happen and his consultant says we shouldn't worry for 10 years about whether he is physically able to work) he might have difficulty with the stairs and there is no ground floor living accommodation. I find the stairs a pain too (we'd be in deep sh*t even if one of us twisted an ankle), so if we're not buying, we will move next summer anyway.

I don't expect any state support with adaptations. Obviously, in a rental on ASTs that's not going to happen. And in our own house, we're not going to be entitled to anything means tested, as my salary is too high. We certainly wouldn't be entitled to public housing of any kind and it would be wrong to take what others need more.

There are not many suitable houses on the market (even this one isn't ideal, but it has a lot going for it as a family home). Over the last 2 1/2 years, maybe 3 or 4 decent 4 beds have sold. Few 4 bedroom houses come up for sale and even fewer for rent. [There is one that came up this week in Cononley, further up the railway, that OH really really likes, but it is quite a bit more expensive.] Originally I thought we should insist on a ground floor bathroom but have concluded that so long as there is a walk in shower somewhere (or scope for one) and stairs suitable for a stair lift, that's a reasonable alternative.

I don't know how I would be processing all this if I didn't have somewhere I could just type it out, have always thought by writing rather than talking.

silvercar · 9 January 2009 at 12:39PM

.

Over the last 2 1/2 years, maybe 3 or 4 decent 4 beds have sold. Few 4 bedroom houses come up for sale and even fewer for rent.

Then go for it. Especially as you run the risk of not finding a suitable rental in a year's time.

Claremac · 9 January 2009 at 1:46PM

Good luck with whatever you decide. You are in a similar situation to us (second offer on a house when first one was refused.) We were outbid on a house and it went to someone else. Their chain has fallen through so we have offered what we offered previously -5% to represent the market drop since we made the offer. It has been turned down but the agent has said that we might be in with a chance at our original price.

The problem we have, which you may have too, is that the agent knows how far you can go to as opposed to what you will go to now. We are at an impasse but, curiously, it's been a week since the chain fell through and it's not back on the market..........

sympatex · 9 January 2009 at 1:59PM

Large house, no downstairs toilet. frustrating in the mornings when its gogogo.

zone · 9 January 2009 at 4:25PM

Hmm it's a big 4 bedroom house and doesnt need any work. If you like the area and dont mind paying a little more now its probably worth going for. But if you wait a while you might be able to get it for less than £150k as long as it stays on the market.

They have dropped the price twice so far and are coming down in £10-15k decrements. So it just seems to me that £160k would be their next price update. It would be a good deal if you offered £150k now and they accepted.. but you never know, it depends how desperate the seller is getting. That would be 25% off in less than a year. Give it a go :cool:

kunekune · 9 January 2009 at 4:50PM

It's an elderly (but active/compos mentis) widow selling, she wants somewhere smaller. When she first had it valued, over a year ago, before the prices really started falling, she was going to put it on at 210 or 220. That was what the most similar house in the area had sold for a month or two earlier. She then broke her wrist and had to delay starting to sell for 4 months. In that time, the market changed, so that when she first asked for 200, in her mind that was already the first drop. At that point, though, she hadn't found another house. I wonder whether she has now: the first drop took 7 months, the second just 2.

I agree sympatex about the lack of a downstairs toilet, though there is somewhere one could go (under the stairs is a large cupboard, currently accessed from outdoors, that backs onto a large pantry. If it became a shallow cupboard rather than a deep pantry, there'd be enough room, and access could be from the hall. We would use the en suite room as the spare room/study, so that second toilet was available for everyone (the fourth bedroom is quite big anyway).

You can tell that we were serious back in May, I guess, since I already have all those things worked out.

Catblue · 9 January 2009 at 5:25PM

Well, you've obviously done as many calculations as you can, given where the market is.

I agree that it would be worth going for IF you really like the house and the area and can see yourselves settling there. If you liked it last May and still like it now, then you are hardly rushing into things are you?

The only sticking point then (as always) is the price. Whatever happens, you'll get a better deal than if you had paid £220K at the peak of the market. Still no reason to pay over the odds now though.

Obviously, the vendor may not sell for less than the new asking price, so it would be worth ringing the agent up and seeing what the vendor realistically wants for the house, given the state of the market at the moment. Tell the EA that you have nothing to sell, can move quickly, can easily get your funds in place etc.

Bit strange that the agent hasn't got back to you after your offer was rejected at £170K last year and then the asking price is subsequently lowered to £175K. I'd be annoyed if my EA wasn't chasing up interested parties.

She should have accepted our offer, LOL! - Edited, question in my most recent post

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