Buying a property - am I stupid not too?

kroo345

Hi,

I'm 24 and in my second job, but still live at home. Although not desperate to move out, I'm really starting to feel I should pretty much because I can get a mortgage, and without taking advantage of that it seems like dead money that I could be investing in property.

I have a couple of proplems with buying property at the moment:

I don't especially like the area I work in so could end up changing job soon - could end up anywhere! Single, no ties
Not sure where I'll be in 2 years time
no deposit
outstanding loan (for car, £270 a month)
I don't want to live where I work - but I do want to live in a city about 35 mins away - so I'll still need car and to pay fuel costs to commute (currently £200 a month, should fall to about £140)

Pros are:

I've already been for a mortgage interview and got one authorised - I know I can get the money

The place I want to live has 2 unis and a colledge, so would make sure the place was rentable if I wanted to move away, or had to for work,
I'm single - so could move in to a place and rennovate 1 room at a time (if thats a good way)



All in all, if I worked and lived in the same place it would be a no brainer, but needing to run a car and commute is a pain. Also not knowing where I'll be in a year or two makes things trickier, but maybe this is offset by being in a rentable area!

I would like to own my own place, and kind of feel that I should because I can (according to the bank) afford it

Any advice greatly recieved!

Thanks

Doozergirl

Staying at home isn't dead money. It's money that can be saved for a bigger deposit and a smaller mortgage. Every pound you save in cash towards a deposit will save you an extra two pounds in mortgage interest alone.

House prices are not going to sky rocket anymore so leave that idea out of your mind. Houses are no longer the place to put money for short term gain. If you're not happy with the area or your job then wait until you are more settled and find somewhere you're happy to buy. It costs at around £5000 or more to sell up and buy again, so try to make a long term decision.

PS. Welcome to the boards

kroo345

Thanks Dozer,

Although I said i'm not desperate to move out, I should have said that I'm not being pushed out and don't live to far to commute. On the other hand I am 24 and kind of want my freedom!

So , given my current situation vs renting a one bedroomed place myself, or renting a 2 bedroomed place with a mate (finding one that wants the same as me is actually really tough!) What would you do?

Maybe saying I want my freedom is a contradiction! As without a mortgage, and with only a loan to pay, i'm financially pretty free. Just still live at home!

Cheers,

Doozergirl

I would rather buy than rent, but it's a matter of personal choice. I wouldn't buy with any expectation of the price of my property increasing much over the next few years though. I'd also try to buy where my goal lies ie. the city.

Just do your research, make sure you've got the best price you can get for the property and either ensure that you can afford a substantial increase in mortgage repayments as a safeguard againstinterest rate rises, or fix your rate for as long as you can for stability.

mummytofour

I would pref to buy than rent. I bought my first place at 18. wish I had know then what I know now as I would be a load better off! I think now is a pretty good time to find your feet, but if you are ok to stay at home a while longer, save, save, save the bigger the deposit you have the better also you sound like your not to sure of where you want to be in a few months/yrs maybe it would be better to sort out a life plan before you settle down...
if you want to travel ( which lots of ppl do) do it now or you never will, I missed out on that part of life... but thats ok for me, coz I have a family now and im happy.

lynzpower

Hi there Kroo

Personally, I woudnt go into such a big debt responsiblity with so many doubts. As my gran always said to me, "if in doubt, dont".

Maybe thats just me, but once you get into a situation where you are laying out hundreds of quid a month in interest for something you dont really want, Id end up resenting it and regretting it.

Wickedkitten

Hmm, I wouldn't say it's that bad. We are going from renting a 2 bedroom flat to buying a 2 bed terrace and even with all the insurance and assurances it's only going to be 50 quid more on a repayment mortgage.

meanmachine_2

Good grief. The youth of today really are brainwashed.

You're not spending a penny on rent and you think somehow it's "dead money".

What's dead money? I don't get it.

Just because the bank is offering you a mortgage, so what? I could get a million pound loan tomorrow if it took my fancy. Why should i?

For crying out loud, use your current situation to save like mad and keep saving - at least until you've cleared your debts and have saved a 10% deposit.

The OP doesn't even have rent to pay and yet people on here are advising him to buy - WITHOUT A DEPOSIT SAVED. Sheesh.

Paying interest on a loan is the ultimate in dead money. You can't get anymore dead than that. It's deceased, Defunt. Popped its clogs.

For every pound you save, it's £1.70-ish you don't have to pay back to the bank.

Remember that.

van_persie

OP hasn't even mentioned his/her take on the property market right now.
Have you actually researched the state of the market? Do you think that buying at the absolute peak of a market is a wise thing to do? If so, good luck...

kroo345

hey, thanks for all the responses

By dead money, what i meant is I have access to a certain amount and maybe I should make the most of it by investing in property. And not to take advantage of that would be a bad decision

It sounds like thats the wrong attitude to have though! Thats fine by me - I just wanted to know! I'm not the only person in my situation that feels somewhat pressurised into buying just because they think it's the most intelligent thing to do with their money.

Saving a large amount each month sounds like a good idea, and a good way to get used to paying a mortgage.

As for travelling - yeah I'd love to do that, again I wondered if it would be best to buy and then rent out so at least Im coming back to something instead of starting fresh

Life plan??? if someone could point me in the direction of where to start that would be good!

Thanks

p.s. I do pay board!

Dora_the_Explorer_5

Life plan??? if someone could point me in the direction of where to start that would be good!

Start at where you want to finish up and work backwards?