I just dont know what to do anymore

franklee

Wickedkitten wrote: »

However, if you are buying it as a home, then if you see a house that you want that will do you for at least the medium term and you can afford it without taking out the maximum that you can borrow with a big deposit, then why the hell not really?

In two words negative equity. Do you have any idea how much stress that causes?

1. When house prices fall the OP will not have enough equity to remortgage on to a better deal when her initial fixed rate/discount/etc runs out. This will leave her on her lender's standard variable rate. These may be low now but in 3-5 years time when the trashed pound causes inflation to take off

2. If the OP or her husband to be lose their jobs in the depression that is to come they won't be able to afford the house and may get repossessed. Also if they can't sell how can they relocate to get a new job?

3. When the kiddies come along they could have the same problems as 2.

A 10% deposit simply isn't enough of a safety net. That's what the lenders are saying, simply that the OP is too risky to take on. I'm surprised she was offered 15% I think you'd need at least 25%, ideally more.

Wickedkitten

franklee wrote: »

In two words negative equity. Do you have any idea how much stress that causes?

1. When house prices fall the OP will not have enough equity to remortgage on to a better deal when her initial fixed rate/discount/etc runs out. This will leave her on her lender's standard variable rate. These may be low now but in 3-5 years time when the trashed pound causes inflation to take off

2. If the OP or her husband to be lose their jobs in the depression that is to come they won't be able to afford the house and may get repossessed. Also if they can't sell how can they relocate to get a new job?

3. When the kiddies come along they could have the same problems as 2.

A 10% deposit simply isn't enough of a safety net. That's what the lenders are saying, simply that the OP is too risky to take on. I'm surprised she was offered 15% I think you'd need at least 25%, ideally more.

first post I put in this thread toward the OP

Right now considering the fact that the market is falling, if you went out and bought a house today, unless you have a deposit of 15% or more and got a hell of a deal, you will probably lose same amount of money in the first 3 months of home ownership than you would "lose" if you rented a house for a year at £800 which would already leave you in negative equity with the prices still falling.

sarah_elton

OP - one thing I'm confused about is why the cheapest rental is so expensive.

You said that you were looking at buying a house for about £100k. Where I am, properties that cost that amount to buy rent for about £500 per month.

Are the rentals at £850 the same type of property as what you were looking at buying? Is there nothing cheaper going?

Just thinking - surely if a £100k property would rent out for £850/month they'd have BTLers swooping in, in spite of the market...

schueys_girl

OP: I felt the same as you about renting being a "waste" of money last year. But now I am glad I am renting with my fiance because of the way things are going in the economy.

We rent, so we get to be together all the time (which gives us a good idea that we should be getting married!) and we manage to save...we save for a deposit and also for our wedding. It is a long process but at least we feel like we are doing it together and yes we miss out going out a lot, or having really really nice food to eat, but it is a means to end, even if that end is another 5 years away!!

We didnt want to live seperately anymore, so worked out our budgets so that we can be together and still be saving.

I would much rather rent with someone first and make sure you CAN live together long term before getting tied into a mortgage together also.

Why don't you and your fiance rent for 6 months and see how it goes, and you should still be able to save something. I definetly wouldnt want to be buying a house now, give it a year or so and things may be picking up.

At the moment renting is not a waste because if someone does lose a job, at least you can get out of the tenancy when the 6months ends or if it continues on a rolling 2 monthly or 1 monthly basis - you wont end up in debt and in much more stress than if you have a house.

Why dont you and your fiance go and look at some rental properties? Just the two of you, you dont need too much space, a 1 bed flat would do for now - then at least you are together and enjoying your independance and you should still be able to save.

My wage is a good one, but my fiance is training in a school on £80 a week and we still manage to save for the wedding and for a deposit each month

Takes longer - but much better than rushing in I think.
Good luck

Claremac

I think that you are probably picking up a certain message by now!!!! I'm with the "rent for now" brigade. Sold my house and went in to rented last May with OH and 2 kids. Even though the rental is quite expensive the shift in the property market since then has been amazing. The type of house we have been looking at have come down around £25-50k in that time and I don't think that they are anywhere near the bottom of the market. If you can rent somewhere cheaper it will be well worth it in the long run. Good luck for the wedding!

evilwitch

Another vote for the 'rent for now'

We're doing exactely this, frustrating as it is, because we are building the deposit and watching the 'dream house' becoming into reach. We started watching about a year ago and the house we want was at least 100k over the top end of our budget, since Christmas there have been some of these houses with an asking price at the top end of our budget.

We've saved hard, currently saving over 1k per month, which I believe is about what the 'average house' is losing, already we're only looking at a 60%LTV which is decreasing day by day. We're not typical FTB as we're going straight in for the 4bed house (need to with 3 kids!). we're doing this on just the one (not overly huge) salary, as I'm a SAHM.

The house we're currently in, drives me insane at times. I hate it. Its cold, draughty, hadn't been updated in 40yrs, single glazed windows and possibly the oldest boiler in history. The paint is peeling off the kitchen cabinets so they can't be cleaned properly and its opposite a convienience shop which results in late night noise and loads of rubbish dumped on the garden, its also small so we have to have the baby in with us as long as we're here as there isn't the space to move her into either of the other two bedrooms thanks to archaic built in furniture and size. We could easily move and get a house adequate for our needs but instead are preferring to wait to get exactly what we want for the same price in 6/12/18months. Our outlook is; this is only short term, it will all be worth it when we get our perfect house and we will be able to look back and think that it was worth it.

Please, please please don't rush in and buy something just because the alternative is unpalatable. If you are wanting a house to raise children in then wait and get more house for your money. Rent a room in a share, rent a bedsit or a flat. You'll be together and surely these would be cheaper than £850pcm. It won't be forever.

FWIW it sounds crazy to me to get a loan to make up the deposit when it can be achieved by some saving. Its only a small amount you are short. You can save the difference and watch the prices of what you want come down then you'll have a lower LTV and better rates, both now and when it comes to remortgage in the future.

Sorry this has turned a bit rambly.

Maisie11

I have seen a number of FTB's planning to stay in their first house for years even when they have children. So if they are planning to purchase a 3/4 bed house who on earth will buy the flats, small houses etc especially if they are on average salaries. And what will higher wage earners (£150-£200K plus) be able to afford, a castle, mansion, small village.......