Rent? Buy? What would you do?

lilian1977

Hi

I think I already know the answer to this but I'm interested to hear what other people think.

We are looking to buy our first home (I'm 32, OH is 33) and we have about £25,000 deposit. For that reason we have been looking at homes for around £100,000 or less. I have a patchy credit history and we have been told by a broker that we will get a better interest rate if OH applies on his own. We were hoping to get a fixed rate for 3 years, by which time the patchiness will be gone from my credit report allowing us to shop around.

All sounds fine, you may say. However, we have been finding that houses for that price in the areas we would like are either too small, need too much work or have other downfalls such as no parking and on a main thoroughfare that is gridlocked a lot of the time. Houses that are big enough or need no work are in rougher areas that I really don't want to live in (if anyone saw The Street on Monday you'll know exactly why!)

So, we are now thinking of renting until we have a larger deposit. Our current rent is only £350 per month although the flat is really small so we want to get out asap. Anything bigger however is going to eat up around £200 from our monthly savings, making it longer until we save enough for a better deposit.

And just to add, we are getting married in April 2010, OH doesn't want to be in our small flat when we are married and we also want to start a family next year so whatever happens we need to be in a bigger property in around 10 months time.

So. What would you do?

Pee

I'd stay where you are, keep saving and keep looking.

And when the house is bought make sure there is a legal agreement protecting your interest in it until you are married if it is in your OH's name.

lilian1977

That's what I think is probably the best thing to do, it's just so frustrating tripping over each other and not being able to have family to stay. But I know it's the wisest thing to do.

And thanks for the other tip as well, the broker advised this too

LittleMissAspie

I would stay where you are too and increase your savings. In fact I would wait until after the wedding until I started making offers to buy, as I don't think I could deal with the stress of two major events at once

I know neither of you like your flat much but those ten months is an extra £2,000 and every little helps.

If you do move rentals, remember you will most likely have a minimum 6-month contract.

mlz1413

Would it be worth having an interest only mortgage of the first 3 years and then when you re-mortgage go for repayment?

assuming you will pay 5% for a 3 year fixed then on that rate you can borrow £84,000 for the same £350pm as your rent. Giving you nearly £10k more towards a better house.

otherwise i'd agree to stick to renting and saving.

kibs88

I feel that I should give my input on this because your story is much similar to mine!!

Me and my OH both 22, are in the process of buying a house, same deposit as yourselves and same price range. Not only this but as I am a student there is only my OH on the mortgage etc so that we can get a better rate!

We were in the same position trying to decide or buy, in our case, similar to you all the houses were either too small or needed too much work, so we expanded our search area by 5miles and found a lovely 3 bed semi (repo) for £86k, we are getting ready to exchange today!

We decided to buy based on the fact that we did not want to be signed into a contract for however many months and then see a house on the market which we fell in love with and not be in a position to go for it, we were lucky in that our parents dont mind us living at home.

I think that if you sit down and weigh up all the pros and cons it will be easy to make a decision, what you have to think about is the logical approach and not an emotional approach, as we did not get anywhere in discussions as I was going with my heart with the idea of a lovely house garden and kids running about.

Good luck with what ever you decide, and let us know your progress

lilian1977

Thanks for all the advice guys - I'll have a think about it and discuss more with OH and come back to you! x

before_hollywood

look at everything.
i had an offer rejected on a 2 bed terraced with no off street parking, i walked away, found a repo town house, loads bigger and once i negotiate the contract with the l.a (its ex council) off street parking as well

for 2k more than i was rejected on the other