considering buying now...? help!

daleuk_3

I had a plan of saving £30k in 3years... however I am now considering buying now while prices are low...

I have seen an apartment at £60k... so far i only have £6k as a deposit.. thus I would need a 90% mortgage. I have a good credit history and no debts outstanding. I earn £25k PA.

Advice people? wait 3 years or buy now?... ek!

dfh

If you are looking at multiples,then you will be borrowing just over two times your income which is affordable.I suppose it depends on what kind of flat it is and what your needs will be in future.It is difficult to predict where the housing market is going.My gut feeling is that house prices will drop further.I would be more inclined to wait till spring 2010 but that is my personal opinion.

Cannon_Fodder

The more you save, the bigger the deposit, the better Loan-to-Value mortgage amount, and the better interest rate you can get...on top of simply borrowing less, so it costs less, too...

The recent price upturn is reckoned to be temporary. Autumn/Winter thought to be a fresh downturn.

Saved hard for 6 months...review then.

daleuk_3

Cannon_Fodder wrote: »

The more you save, the bigger the deposit, the better Loan-to-Value mortgage amount, and the better interest rate you can get...on top of simply borrowing less, so it costs less, too...

The recent price upturn is reckoned to be temporary. Autumn/Winter thought to be a fresh downturn.

Saved hard for 6 months...review then.

Yes, this is exactly what im thinking too... but the perfect place to live has come up and im not a fan of putting money in my landlords pocket! when I could be paying off my own place.

MORPH3US

So you rent at the moment?

How much rent do you pay at the moment?

Is there any other reason you want to stop renting and get your own place or is it just the "lining the landlords pocket" reason? I ask because with a mortgage you'll just be lining the banks pockets with interest payments....

That said, I am more in the just buy if you want to camp because a home is a place to live and as long as you want to stay there for the forseeable future and can afford the payments then you'll never lose in the long term....

I don't believe that the housing market will suffer any more sever falls. Maybe slight falls over the winter but on the whole I think a stagnant / very small upward trend will start / continue.

Cannon_Fodder

Is there a shortage of flats where you are? Most places have hundreds that have sprung up in the last 5 years. I would question the "uniqueness" you seem to imply.

If it is unusual/rare, and if you have a safety net of around 6 months income, so you don't risk losing your house through job loss while the recession continues, then it may be worth proceeding.

Indeed some pointers on the mortgage market are that now is the time to fix. However, with only a 10% deposit, you will not be getting the best rates anyway. So, a better deposit will, I suspect, save you more on the mortgage rate than the likely movement in rates over 6 months - although that is obviously opinion and guesswork, nothing more.

I appreciate the keenness you have to "get on the ladder". No-one can say for certain how things will pan out.

In the early 90s I was in the same boat, a friend who was also an Estate Agent was advising me to buy "as the time was right". I didn't buy anything on his books, but did buy within 6 months. Despite paying over 20% less than a neighbour, on moving out 7 years later the property was still nearly 10% in negative equity...my deposit was no more...and there was no credit crunch in the 90s.

But then and now, regions vary in the length and depth of property crash.

It is a toss up...

daleuk_3

Its a converted pair of victoria house's.. and unlike most cities there are not a mass of blocks of flats in the vacinety. Thing is that it could end up going for less than the £60 as this is the guide price, its up for auction (obviously it could go for more and if so im not interested).

I have £6k in savings... currently paying £250pm in rent for a room. To take this on borrowing £54k... over 15 years at £486pcm...(rental value aprox £500-550)... what if I want to move in 4 years time? can I let this out and get another mortgage easily?

Its a big decision to make and its so much easier just renting but I dont want to sit back too long. Maybe I should wait till I have more than the min 10% deposit.

dfh

If it is an auction,make sure you have an agreement in principle from a lender.Ohterwise,if you bid and win and then find it difficult to get a mortgage it could put you in a difficult position.