Sod it - Im buying!

GracieP

elliebobs wrote: »

A house doesn't necessary have to be a cash cow; it can also be a home!

Of course it can. But equally a mortgage doesn't have to be a 25 year one it can be for 15. Or a house doesn't have to be a 3 bed semi it can be a 4 bed detached. So yes you can buy a home now, but be aware that you could probably buy a nicer, cheaper one in 2 years time.

And no, I don't have a crystal ball, but I don't need to tell the future to know that if you put an inch of water in a pan, then leave it on a hot ring for 8 hours the bottom will burn out of it. It's called cause and effect. Equally rising unemployment in a country with some of the highest levels of consumer debt in the world and house prices which are completely out of line incomes will result in house price falls much bigger than we've already seen.

I hope the OP has a good life in her house but it is not the wisest course of action at this time. Just because a house is going to be your home it does not justify paying too high a price for it.

FoxtonsRIP

It's all well and good buying a place you love but you can't ignore the financial implications of doing so. If only we lived in a world where money didn't matter.

JoolzS

Congrats on buying your first, and perhaps only, home. Home is lovely.

Enjoy your home.

Julie

QTPie

If the OP is very happy with their decision AND financially secure, then good for them

I don't think that anyone can blanketly say that "no-one should by a house right now"... it might not be the "optimum" time, but people have a lot of reasons for buying a house and not all of them are related to the "bottom line".

The OP seems aware of the current economic climate and the risks of buying now and has decided to proceed anyway, so good for them

OP, enjoy your new house - hope that you have many happy years there

QT

lyndasharp

OP, congrats on your new house. I bought in January, and don't regret it at all. In my case, thanks to interest rate drops, I'm now paying the same for a mortgage as I was for a room in a shared house. To have a home that I am really happy in is well worth it, despite any potential drops in value.

MrDT

Jules100 wrote: »

We're only really interested in fixed. Best 2 options are - fixed at 4.9% for 2 years or 5.9% for 5. Think we're going to take the 2 year one although Im tempted by the 5 year... lol me and partner both have differing views! We can repay 20% extra a month with no penalty and I think we'll do this for the whole time.

First of all - Congratulations

Secondly, I have to say a two year fix seems a bit pointless to me. All you'd be doing is locking in a highish rate for two years where base rate will most likely be low, and then be vulnerable to rate hikes in two years time that could be pretty horrific. If the security of a fix was really needed, I'd be going long term (10 years).

Not qualified in any way to advise, but "2 year fix" set alarm bells ringing in my head.

alexlyne

Hey we want to buy too! just waiting for the right place to come along!

I agree with MrDT - security of 5yr fix (or longer?) at this time may be safer as rates could rocket at some point in the next few years (remember: 15% in early 90s!). But then again they may not. Who really knows?

Jules100_2

Thanks for the comments! Noone know's when the bottom of this is, and we'll only ever know it in retrospect by which time house's will be going up again! It's leveling out which is good enough for us! Anyway maybe we should save that for the house price board!
I am very confused about the mortgages and take your point about being locked into a high rate. But surely the 5 year one is being locked in for longer at an even higher rate? eek!

QTPie

Hi

I think that most people don't think that interest rates will rise heavily over the next year/18 months.... if they do (there is the feeling that they will - they are INCREDIBLY low at the moment - but no-one knows HOW sharply they will rise), then it is likely to be the 18 months to 3/4 years that will probably be the "icky patch" (whether it will be 10/15% who knows).

So if you fix now at say 4.9% for two years, then the interest rate (of a good SVR or tracker) is LIKELY to be LOWER than that for most of the two years (so you PROBABLY wont gain from being on it), BUT rates MAY take a sharp turn for the worst just as you are approaching the end of your two years - so you may come out of your fixed rate JUST as rates are shooting up and you will struggle to move on to a good deal.

The thought is to fix for a mininum of five years: ok you pay more now, but hopefully you will be protected for most of the icky patch and, HOPEFULLY, by the time your fix rate expires there should be some good deals around again.... BUT it is all guess work...

Depends how risk adverse you are...

QT

Turnbull2000

So we've gone from 'pay over the odds as houses prices only go up', to 'pay over the odds as a house is a home'. I'm not sure which is worse. I don't understand the OP's "doom and gloom" remark either, as this "doom and gloom"; is by and large homes becoming more affordable. I have a sneaking suspicion the OP falsely believes that rising prices help you you upsize to something greater, when in reality the gap becomes larger.