Should we pull out of house buy

GDB2222

flea72 wrote: »

well, thats ok if you can afford £900 a month for the next 2yrs, and you can guarantee that the mortgage will be £600 a month thereafter

If you think house prices, and mortgage interest rates are gonna be such, that we go back to house prices of 10yrs ago, and interest rates of 3yrs ago, then you are working with very exaggerated figures.

Flea

Surely, you're the one exaggerating? A 22% drop in prices is the average predicted by the good folk on this forum (130 have voted). A 22% drop would take prices back to September 2003 levels (according to the Halifax data.) So, that's 5 years back, not 10, and perfectly plausible.

Knocking 22% off the price means the mortgage comes down in proportion, so £800 => £624, which is why I said £600 to £650.

I didn't say anything about interest rates of 3 years ago. I just used Chris's mortgage figure that he's just quoted to us of £800, so I've inherently assumed no change in interest rates.

Even if prices only drop another 12% (in line with the Chairman of Nationwide's prediction) that's £100 a month off the mortgage for 23 years, compared to £100 a month extra rent for 2 years.

It all seems such a no-brainer to me that I wonder whether people here have some sort of blinkers on?

Of course it's not guaranteed, and prices may suddenly stabilise tomorrow.

Chris2685

OK, well just as I was doing up my spreadsheet to work this stuff out, it got really busy at work so I couldn't do it...

I really am considering pulling out now though, I have just done a basic calculation on rent minus savings interest, and the costs are significantly lower...
I'll discuss it with my girlfriend and see what she says. Although, if we don't have the mortgage approved by next Friday we won't really be able to go through with it anyway, as Catalyst (MyChoice Homebuy lenders) require us to have the survey complete by 22nd September. If I haven't had my mortgage 100% approved there is no way that I am spending £600 on a survey!

Cheers for all the info and tips.

beautifulgorgeous_2

The mortgage is not the only cost in home ownership. If the boiler needs replacing in rented property then the landlord pays if the building soc own the house then you pay.....

geoffky

Chris it would be interesting to keep track of you over the next few years if you buy... to see how it pans out for you..

Chris2685

geoffky wrote: »

Chris it would be interesting to keep track of you over the next few years if you buy... to see how it pans out for you..

It sure would! Maybe I should start a daily diary haha.

gfplux

Just my late thoughts on buying and the monthly costs in doing so.
Mortgage xxx
Life insurance to cover breadwinner xxx
Council tax xxx
Building insurance xxx
Have I missed anything?

ad44downey

Northants_Simon wrote: »

Historically prices always go up. .

Oh dear. The credit crunch hasn't taught everyone a lesson clearly. You've been watching too much Kirsty and Phil

ad9898_3

Of course "historically house prices may go up" but I would still sooner buy when prices are at the bottom of the cycle than when they are on the way up or worse at their peak !

Isn't it always best to buy something when its cheap than when its expensive ? or am I missing something. Thia bo**ocks about prices historically go up is a totally lame excuse for buying now.

Chris2685

Pretty sure we're now going to pull out of buying the house.

It is causing us too many sleepless nights, and with my girlfriend being pregnant all this stress is certainly not good for the baby!

We have been going through the application since middle of July, and haven't even had our mortgage approved or survey done yet.

I am pretty disappointed in our IFA, as I am pretty sure it is his job to ensure that we have all of the relevant paperwork prepared that the mortgage lender will ask for! It just seems to be an endless cycle of going back and forth, with them just constantly needing more and more documents from us.

In some ways it is a sign, because it really would be a terrible time to buy (as many of you have pointed out to me over the past couple of months!).

I just have a few questions:
Will we be liable for any money?
So far we have had 2 cheques cashed by Nationwide (£1199 total) even though they haven't even approved our mortgage yet, so I'm not happy about that money being taken out already!
We have had life insurance and mortgage health insurance taken out, but I think we have a 'cooling off period' in which we can cancel these insurances.
We have also paid a one off cheque to the solicitors of £300 so far.

So it seems to me that all we really stand to lose is the £300 to the solicitors, and may even get some of that back hopefully.

Anyone know if we are liable for anything else?

Also, how do we go about telling the estate agent that we're now going to be unable to buy? I feel kinda like I'm letting them down after they took it off the market for all this time, but know they can't really do anything...

Chris2685

Just spoken to my IFA who said that if we decide not to proceed, we will not be refunded the mortgage arrangement fee (taken by nationwide). Is this true?

I don't see how they can not refund it if they haven't even approved our mortgage!