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I want to buy a home!
gabriel4
Posts: 1 Newbie
I am a single mother working as a teacher and want to purchase a home. But don't think I can afford a home. I am tired of paying rent. Is there a way I can become a homeowner and not pay an outrageous mortgage? Your advice will be greatly appreciated!
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I am a single mother working as a teacher and want to purchase a home. But don't think I can afford a home. I am tired of paying rent. Is there a way I can become a homeowner and not pay an outrageous mortgage? Your advice will be greatly appreciated!
Keep renting, save your money and give it 4 or so years because right now is not a great time to buy a house. Renting is currently no different to paying an interest only mortgage at this moment it time, which given by your statement above, suggests thats all you would be able to afford.
Why the rush... do you read the news out of interest? If so then you must be aware of the current situation regarding house prices. In 12 months time hopefully there will be a clearer picture on exactly what is happening with house prices.0 -
Hi Gabriel,
And welcome to the forums... I've saved a lot here, hope you do to.
In answer to your post, unfortunately there aren't any easy answers. I don't know where you live, but I guess a response could be:
1. Co-habitate?
2. Relocate to a cheaper area?
3. Try to save a deposit, and in the current climate prices could drop whilst you're saving.
Not a quick fix, I'm afraid. You probably need a long term strategy, that you'll need to figure out yourself depending on your circumstances.
What area do you live in?Andy
The older I get, the better I was...0 -
Have a look at the government open market home buy scheme. As you are a Teacher are you not classified as a Key Worker?
http://www.homebuy.co.uk/homebuy/product_open_market.asp0 -
Isn't the revised public sector employee 'Key Worker' scheme due this month? You pay market rates on the first 50% of debt, and 1.25% on the rest. This would amount some £250 off a 150K interest only mortgage.
I thought subsidised deposits were also on offer? You should check with your local authority.
(I think I need to work in the public sector! Final salary pensions, earlier retirement, better pay and cheaper housing all round!!)Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
izzybusy23 wrote: »Keep renting, save your money and give it 4 or so years because right now is not a great time to buy a house. Renting is currently no different to paying an interest only mortgage at this moment it time
Yes but with renting you see no benefits of growth in the property. I know, i know, at the moment its unlikely you will see any growth, more likely a fall but this is not a certainty, just peoples opinions! No-one knows whats going to happen.
You may well pay £250,000 back on a £125,000 mortgage yes, but at the end of the 25yr mortgage term you're pretty much guaranteed every penny you have spent back and more. You'll get your initial £125k back, the £125k mortgage interest back and more than likely based on past 25 years a hell of a lot more on top back in growth.
With renting you wouldn't get a penny back.
I can see why people are saying hold on, continue to rent until prices drop, but say they dont (people have been harping on about a crash since 2003/04)
I got put off buying a house in 2003, the same in 2004, and i finally bought a house against everyone elses advice in 2005. I wish i had bought back in 2003.
Hindsight is a wonderful thing and no-one knows what is going to happen.
Back to your O.P..You can opt for a shared ownership scheme if you really want a foot on the ladder.0 -
How do you get your money back, unless of course you decide to put it in the bank and start sleeping on the streets?
I know what you are trying to say, and in your experience waiting was bad. In my experience, however, with negative equity in the early 1990's, I would have been better waiting not buying.0 -
The way I see it, the housing market is a bubble that started (in the UK) back around 1999. It has continued here, in Ireland, Spain, the US etc pretty much unhindered until recently.
Yes, some may have predicted a crash as early as 2003 (they had seen the patterns of a bubble forming) but it wasn't until August 2007 that we saw the start of the trigger that would signal the end of the 'miracle economy' house price inflation. That was of course the credit crunch hitting the front pages.
The problems in the credit markets have got far worse since then. Northern Rock was the high profile casualty, but it is the tightening of available funding for mortgages in the past few weeks that will have the main impact on the state of the market. No more 125%, 100% and in many cases 95% offers - FTB, or indeed any other buyers will face increased deposit requirements.
So, although people have been warning of a crash the credit has been available to keep everyone buying - until now. That particular tap is being turned off rapidly - and without the credit far fewer can buy. And the logic of what is likely to happen as a result is not dificult to figure out....0 -
A crash that accelerates faster than the last one?0
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Commonsensesearcher wrote: »The way I see it, the housing market is a bubble that started (in the UK) back around 1999. It has continued here, in Ireland, Spain, the US etc pretty much unhindered until recently.
Yes, some may have predicted a crash as early as 2003 (they had seen the patterns of a bubble forming) but it wasn't until August 2007 that we saw the start of the trigger that would signal the end of the 'miracle economy' house price inflation. That was of course the credit crunch hitting the front pages.
The problems in the credit markets have got far worse since then. Northern Rock was the high profile casualty, but it is the tightening of available funding for mortgages in the past few weeks that will have the main impact on the state of the market. No more 125%, 100% and in many cases 95% offers - FTB, or indeed any other buyers will face increased deposit requirements.
So, although people have been warning of a crash the credit has been available to keep everyone buying - until now. That particular tap is being turned off rapidly - and without the credit far fewer can buy. And the logic of what is likely to happen as a result is not dificult to figure out....
Good post, but is the bottom end of the market really going to suffer?
I mean from the bottom upwards you get 1/2 bed flats, then 2 bed terrace/3bed terrace/2bed semi detached/2bed bungalow/3bed semi detached etc etc
In a lot of areas of the UK, you can still buy all these kinds of properties for under £125k.
If the 3 bed semi detached for £125k falls to the levels of a todays priced 1/2 bed flat through this proposed crash, then what is the 1/2 bed flat going to fall to?
Mightily cheap i would say and there will then be hardly any difference at all between a 1 bed flat and a 3 bed semi detached?
People would then flood the market and push houses back to where they once were due to a bidding frenzy surely?
I cant see the bottom tier in the market falling drastically as to be fair anything under £125k is easily affordable just now for the average 1st time buyer.
All specualtion of course, im just trying to get my head around how cheap property is going to be if £125k 3 bed semi detached houses start crashing in value.0 -
Good post, but is the bottom end of the market really going to suffer?
I mean from the bottom upwards you get 1/2 bed flats, then 2 bed terrace/3bed terrace/2bed semi detached/2bed bungalow/3bed semi detached etc etc
In a lot of areas of the UK, you can still buy all these kinds of properties for under £125k.
If the 3 bed semi detached for £125k falls to the levels of a todays priced 1/2 bed flat through this proposed crash, then what is the 1/2 bed flat going to fall to?
Mightily cheap i would say and there will then be hardly any difference at all between a 1 bed flat and a 3 bed semi detached?
People would then flood the market and push houses back to where they once were due to a bidding frenzy surely?
I cant see the bottom tier in the market falling drastically as to be fair anything under £125k is easily affordable just now for the average 1st time buyer.
All specualtion of course, im just trying to get my head around how cheap property is going to be if £125k 3 bed semi detached houses start crashing in value.
Understand where you are coming from but if prices do start to fall then the lenders are going to get even more nervous. The problem started in the states due to defaults and the losses in the banks/lenders mounted (and still are). One result of this has been the tightening in lending criteria here, particulalrly with respect to LTVs. Hence as prices drop, the lenders become more exposed and start to decrease their LTVs. This of course increases the amount of deposit.
At the same time, and some of the posts in the mortgage forum on here already mention this, the income multipliers are likely to start to reduce back to 'normal' levels (i.e. 3.5 times single income MAX). So, if you take the average UK salary as £25k per annum (and I may be wrong with this figure) that gives a maximum borrowing of £87.5k. With a 90% LTV this gives a purchase price of £97.2k.
Now of course there are a few main assumptions here - firstly, the buyer needs £10k for the deposit alone. Plus a few more £k for solicitors fees, moving costs etc. Secondly, that the average salary for a FTB is indeed £25k which I would doubt. Thirdly, that the buyer has absolutely no other debt.
Of course, as a couple it may be easier as the income should be higher, but then the income multiplier is likely to be less. However, I'd argue that the average FTB in the UK will not have £10-15k sloshing around with no other debts.
As an anecdote - I remember buying my first house in 2000, 3 bed semi for £82k. I was on £28k at the time - and easily affordable it certainly wasn't!!!:rolleyes:0
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