Why FTB should Resisit buying now and Save instead! explained

pandamonia

This is for FTB looking to buy at some point in the next 12-18 months.

Ill explain why you should not do what quite a few have been doing lately and why you should resist taking the plunge.

Lets say for example you have 10% deposit saved and ready to buy a 130k home.

The best mortgage on the market now is C&G 27 month fixed at 5.69% - The payments would be £731.82 plus about £1400 fees

Now if instead you held fire and continued to save for the next year or so and you managed to get 20% rather than 10% which would be 26k instead of 13k

You could get a HSBC tracker mortgage which is currently 3.69% - Your payments would reduce to £531.31 with about £1300 fees. - on the same £130k house!

Saving £5400 over the 27 months! - This saving will probably increase since interest rates are set to go near zero over the next year and stay quite low until signs of recovery are truly underway.

There is also the benefit from being immune to asset erosion as prices are currently falling about 1% per month saving you a possible £1300 per month on that house!

Also if more FTB resisted buying this year then home prices will keep on falling until enough demand for them forces prices to stabilise.

So all in all if you only have 10% which most people do then there is almost no benefit from moving out of rented or your parents until you have 20% deposit!

ess0two

2nd to last paragraph,you post here under another name,i wonder.............

pandamonia

ess0two wrote: »

2nd to last paragraph,you post here under another name,i wonder.............

this is my only alias -

FTB like falling prices. where you lose then FTB win

Running_Horse

Thank you for the public service lecture. The problem is most people will do what they think is right for them, not what you think is right for them. It's called free will.

pandamonia

Running_Horse wrote: »

Thank you for the public service lecture. The problem is most people will do what they think is right for them, not what you think is right for them. It's called free will.

let me guess you one of the people who stands to lose from all of this?

i didnt tell anyone to do anything i just explained to fellow FTB's the benefits of holding out from buying.

and i like how you fail to argue with my facts and just take a stab at me instead.

shows your worried

besonders1

Don't mind personally. Its better if the FTB's that can't resist and cash buyers bought now and paid the inflated prices so there will be less competition when the market hits the bottom.

pandamonia

besonders1 wrote: »

Don't mind personally. Its better if the FTB's that can't resist and cash buyers bought now and paid the inflated prices so there will be less competition when the market hits the bottom.

Yes i agree.

Another point is people who currently own a home need FTB to move into the market while they can so that the chain is continued and they find it easier to move up the ladder.

or would you rather have just Buy2Let investors buy up all the homes again and cause yet another market crash?

a sustainable affordable market is best for everyone

Running_Horse

pandamonia wrote: »

let me guess you one of the people who stands to lose from all of this?

i didnt tell anyone to do anything i just explained to fellow FTB's the benefits of holding out from buying.

and i like how you fail to argue with my facts and just take a stab at me instead.

shows your worried

You stink of paranoia. My mortgage is less than 50% the value of my home, and has fallen by £175 pcm. What exactly do I have to lose in the home I plan to live in for the next 20 years? I hope prices fall so my daughter can buy a house one day. I also believe nobody is dumb enough to make life changing decisions based on the advice from busy-bodies like you on the Internet. Loser.

mewbie_2

Thanks for the useful post Pandamonia. My wife and I have read this and are making a life changing decision that I think will save us a fortune. We were going to buy soon, but have decided now to wait and save. I know some may call you a busy body, but my wife and I are very grateful for the information.

Thanks again.

pandamonia

Running_Horse wrote: »

You stink of paranoia. My mortgage is less than 50% the value of my home, and has fallen by £175 pcm. What exactly do I have to lose in the home I plan to live in for the next 20 years? I hope prices fall so my daughter can buy a house one day. I also believe nobody is dumb enough to make life changing decisions based on the advice from busy-bodies like you on the Internet. Loser.

where in my post did i refer to anyone with a 50% LTV? or a current home owner?

isnt my title about First time buyers looking to buy in the current market?

i invite you to read what i actualy wrote and then reply with something useful

besonders1

I agree, what is the point of buying now just to be in the same boat as people who are facing negative equity, you will lose less money by renting. there aren't really any cheaply priced homes on the market today anyway. We have only just started to see sense in the ratio between mortgages and earnings after all this crazyness in the value of peoples homes.