Wife wants to buy now, I want to wait 5 years+. Advice?

Glen0000

We would like some advice about where to go from here. We are renting at the moment, council house so very cheap rent. Due to an inheritance we have £15k for a deposit/fees. However, we also have £10k of credit card debt. Wife wants to buy within the next year, me not so sure. I would like to wait 5 years or so, pay off the credit cards with the inheritance and save another £15k for a deposit. We are also pretty bad with money, so need to get that under control. Wife thinks that by then house prices will have risen further and a home that is priced £100k now will be out of our reach.

We have £15k saved up, £10k of credit card debt and are looking to buy a home worth around £100k. I earn £35k, wife earns £7k, 1 dependant child. Would we even get a mortgage on these figures?

How can I convince the wife to wait or is waiting a silly idea? In 5 years time what is a £100k house likey to be worth?

Kez100

No idea what houses will be worth in 5 years, things are moving daily at the moment.

What you do need to do though is get your spending under control. Paying off credit cards is brilliant but because you have come into money it hasn't actually taught you anything - if you know what I mean.

So, pay them off (check their rates versus savings rates less any tax first), put rest into savings somewhere and do a budget. Learn to live witin your means and save towards a deposit. Before you own a home you need to get finances under control IMO.

Ian_Griffiths_Halifax

I would consider getting rid of the wife and go to Vagas with the £15k. You MAY double your money and come back and meet a floozy at your local who is only impressed by your money, but doesn't insist on you buying a house.

OR

Pay off your Credit Card debt and put the monthly payments you've been used to paying into a savings account for the next couple of years. I'd rather be debt free and rent than mortgaged and have debt upto my eyeballs.

Pobby

I look at it this way. You have cheap rent right now and that is plainy something that must be considered. I am mortgage free but I play a little game. I pretend to have a mortgage, say £500 a month so each month my savings go up by £500.

So why not work out what a mortgage my cost you, deduct your rent and put that money aside each month. Get rid of your debt and have that £15,000 ready to purchase with.

Prices are still coming down and maybe will be on the way up in 5 years time (personally I doubt it) but you would be in a better posistion to buy in say 2 or 3 years time.

Glen0000

Pobby wrote: »

I look at it this way. You have cheap rent right now and that is plainy something that must be considered. I am mortgage free but I play a little game. I pretend to have a mortgage, say £500 a month so each month my savings go up by £500.

So why not work out what a mortgage my cost you, deduct your rent and put that money aside each month. Get rid of your debt and have that £15,000 ready to purchase with.

Prices are still coming down and maybe will be on the way up in 5 years time (personally I doubt it) but you would be in a better posistion to buy in say 2 or 3 years time.

That is a great idea! I will put that to the wife as I think she would be more open to that. She is worried about spending the £15k and not being able to buy at the bottom of the market as we would have no deposit.

Kez100

Pobby is right. That way you can work out if you can afford a mortgage without actually having one.

Oldernotwiser

I don't know how secure your job is but bear in mind that if you have £15,000 of savings (even with debts of £10,000) and you were made redundant, you'd be ineligible for any help from means tested benefits.

PasturesNew

Pay off your credit card debt. Put the monthly payments for that into savings thereafter.
Do the pretend mortgage thing and put that into savings too.

You need to point your wife at the house price indexes and away from the estate agent articles that say prices will be going up again in 2009. They won't.

Encourage her to become better informed. Steer her towards potentially buying in 3 years' time. With a good deposit.

Pssst

Is buying your council house an option or do you want out of the area?

also is the tenancy in joint names?

PasturesNew

Oldernotwiser wrote: »

I don't know how secure your job is but bear in mind that if you have £15,000 of savings (even with debts of £10,000) and you were made redundant, you'd be ineligible for any help from means tested benefits.

It's better to be stuck with too much savings than a big mortgage round your neck though.

Glen0000

Pssst wrote: »

Is buying your council house an option or do you want out of the area?

also is the tenancy in joint names?

Not an option or else we would have bought it. Tenancy is in joint names.