FTB - What would you do in my position?

Synonymous

Hi, I'm looking for some advice and a reality check please!

I've been saving for a deposit for some time now and have seen a house I really love. I went to get some up-to-date mortgage advice and it seemed the only mortgage available to me on my income alone at fixed rate is an RBS one fixed for 5 years at 6.89% which to me is too high and too long. I could make the repayments if I rented out a room initially until my wage increases substantially next year, and I don't mind a lodger but obviously its not secure income and I would rather do this to overpay each month, not just to make ends meet.

Mortgage advisor says wait it out and see if there is more choice in a couple of weeks, which I will have to do. Do people think my choices will improve much in weeks to come, and if so, by how much. I want a good deal and don't want to rush but am slightly blinded by finding a nice house! Would I be better just putting it to the back of my mind and saving, saving saving for a bit longer?

opinions4u

Synonymous wrote: »

Hi, I'm looking for some advice and a reality check please!

I've been saving for a deposit for some time now and have seen a house I really love. I went to get some up-to-date mortgage advice and it seemed the only mortgage available to me on my income alone at fixed rate is an RBS one fixed for 5 years at 6.89% which to me is too high and too long. I could make the repayments if I rented out a room initially until my wage increases substantially next year, and I don't mind a lodger but obviously its not secure income and I would rather do this to overpay each month, not just to make ends meet.

Mortgage advisor says wait it out and see if there is more choice in a couple of weeks, which I will have to do. Do people think my choices will improve much in weeks to come, and if so, by how much. I want a good deal and don't want to rush but am slightly blinded by finding a nice house! Would I be better just putting it to the back of my mind and saving, saving saving for a bit longer?

1) There are lots of other houses out there that you will also really love - and I doubt that you're in a contracts race for the one you've seen anyway!
2) If you need a lodger to make ends meet, you shouldn't be taking on a mortgage. It's fraught with risks of being a bad personal relationship, not paying, stealing, moving out etc etc. I would personally say that it's something that should only be considered as an emergency measure when you have a significant drop in income or a significant increase in bills (which a fixed rate mortgage would avoid).
3) Go and see a mortgage broker to assess other deals. There are a lot more lenders out there who will have better products than RBS. Ask what additional deposit will get you a better rate. While in a falling rate environment a short term tracker is an obvious one to go for, don't rule out longer term fixed rate products. They give you financial guarantees that trackers don't. The right option depends on your circumstances and a decent broker or a mainstream lender with a wider product range can help you decide.

I'd save for longer because house prices are falling and probably have a further 5%-15% to go,and a bigger deposit will save you money for the first few years of your mortgage.

BigBumpaGirl

I am in the same position. I have found a property that I have fallen in love with, however,after careful consideration I shall be saving for at least another 12 months to get a bigger deposit. And if house prices continue to fall I will be in a good position to get a better deal.

Although I must admit I keep on checking up on the property to see if it has been sold!

djamel

I have to agree with opinions4u.There are lots of other house for sale that you could even have second thoughts before buying the house. I would save much longer so that I don't have to worry about paying the monthly mortgage fees.

Synonymous

Thanks guys, I know I should just keep saving but the house is exactly the same as a house i rented 8 doors down, so its like I've already 'tried before I buy'! Lodgers wouldn't bother me as I lived in shared houses during and after uni for 6 years and they would probably be friends not strangers. Also, I'm not hoping for a payrise, its guaranteed when I complete my training, plus my job is safe in the current climate. (Not being defensive, just clarifying!!) At the moment deals are about £100 over what I could afford in monthly repayments, do people think that will improve any time soon?

I know people keep saying that house prices will continue to drop, but we wont know we're at rockbottom until we are climbing out of it, then the demand will soar - I don't want to miss the boat! Arrghh, its all confusing and scary!!

opinions4u

I wish you luck with whatever course of action you take.

If rates fall great. But how will you pay if they go back up again?

Jobs in this day and age are rarely as secure as we think. Ask any bank employee!! What do you do for a living?

boggie40

well i was in the same boat - wife found house of her dreams and instead of us saving for a hefty deposit we are taking the plunge and have submitted our application.

i keep telling the wife - if it's meant to be it will be......

geoffky

boggie40 wrote: »

well i was in the same boat - wife found house of her dreams and instead of us saving for a hefty deposit we are taking the plunge and have submitted our application.

i keep telling the wife - if it's meant to be it will be......

hope you have told the wife you will be in some serious negative equity in the next year because thats what you have to look forward too.
..lets hope some of the 3 million unemployed are not all trying to sell the house around the same time....