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Daelim
Posts: 42 Forumite
After a bit of advice! My wife and I are moving back to Uk with our child and are working out a plan for accommodation...
Option a) use majority of savings to purchase a starter 2 bedroom flat outright and have enough left to cover bills for a year whilst searching for work. No rent / mortgage to pay means we can save once employed and in a few years have a deposit for our "forever" house. Deposit would be much smaller than option b)...
Option b) use some savings on rent for a year whilst we get employment and the rest as a deposit on our "forever" home.
I think option a) is best as all said and done we will own a property outright which we can rent out / possibly sell down the line. However, advice from friends and family is telling us to put down majority as deposit and have a smaller mortgage...
Thoughts?
Option a) use majority of savings to purchase a starter 2 bedroom flat outright and have enough left to cover bills for a year whilst searching for work. No rent / mortgage to pay means we can save once employed and in a few years have a deposit for our "forever" house. Deposit would be much smaller than option b)...
Option b) use some savings on rent for a year whilst we get employment and the rest as a deposit on our "forever" home.
I think option a) is best as all said and done we will own a property outright which we can rent out / possibly sell down the line. However, advice from friends and family is telling us to put down majority as deposit and have a smaller mortgage...
Thoughts?
0
Comments
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Do you know where you want to buy/job location/schools?
I like option a but it could mean you need to sell and spend fees again in less than 5 years. There may be little capital growth in that time.
Can you not rent for 6-12 months to check areas and the above necessities before buying?
Where is your ideal area. Many knowledgable people here froma cross the UK,NOT a NEWBIE!
Was Greenmoneysaver. . .0 -
Hillbilly1 wrote: »Do you know where you want to buy/job location/schools?
I like option a but it could mean you need to sell and spend fees again in less than 5 years. There may be little capital growth in that time.
Can you not rent for 6-12 months to check areas and the above necessities before buying?
Where is your ideal area. Many knowledgable people here froma cross the UK,
Hi Hillbilly1,
Thanks for taking the time to reply
The plan with option a would be to keep that "starter flat" indefinitely and rent it out for as long as possible once we saved the deposit for our family home.
We know exactly where we want to live and the school catchment area (where I grew up) so no problems there, know the market well and know what to expect.0 -
Hi Daelim,
I would be inclined to go with option A because:
- It may be difficult to find a rental which will accept unemployed people (although having enough savings to pay 6/12 months upfront will help, I imagine!)
- If it takes longer than you hope to find work, you should be entitled to income-based JSA after 3 months back in the UK, but not if you have over £16k savings
- Buying a starter flat outright, you would still have the option of selling and using the proceeds for the deposit on larger house if you decide not to keep and rent it out.0
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