Everything's changed - what would you do?

LydiaJ

Update:
I've had a survey. It's basically OK but some things are a bit old and need dealing with - new boiler, new flat roof on extension etc. So I'm getting quotes before we finalise the price.

LydiaJ

Well, I didn't manage to agree a price on that one. Their agent's valuation was £85k higher than my surveyor's one. :eek:

However, yesterday I had an offer accepted on another house. I'll book the survey on Monday and we'll see what that throws up. I've more or less decided on a full structural rather than just a homebuyer's. It's a 1930s house with a recent extension, and I'm planning to do some more extending myself, so it seems sensible to get a thorough survey.

Anyway, the original question when I started this thread was whether to get a small mortgage for a lovely house, or buy an OK house outright. I'm buying the house outright, and should have about £10k left over to go towards the extension. I'll borrow the rest of the extension money. I've struck a deal with my parents about it - they will lend me the money and I'll pay interest that's cheaper than a mortgage would be, but more than they're getting on their savings account, so we're all quids in. :j

Butterfly_Brain

I would buy outright thenif anything goes wrong with your job/s you can still get beefits without risk of losing your home through repossession

LydiaJ

Thanks Butterfly Brain. That's more or less what I'm doing, because if I lost either of my jobs, I don't think my parents would repossess!

pingu2209

LydiaJ wrote: »

OK so here's the story... I don't want to give too many details because I don't want to give away who I am to anyone who might happen to know me, but the essentials are as follows:

I am a single parent (not by choice) of primary school age children. I am currently renting and I work two part time jobs. Until recently I would have said I had a decent deposit ready for buying (mostly from my family, but a little of my own saving) but not enough income to get the kind of mortgage I would need to buy in the area where I live and work. I've been trying to keep saving and hoping that maybe either prices would come down or I would be able to get more hours and increase my income.

This is all unexpectedly changing. A large chunk of my monthly income (about 40% of it) is about to disappear and be replaced by a really big lump sum. Once the dust has settled, I expect to have an income that is nowhere near enough to afford my current rent without eating into my capital each month. My potential to work more hours won't have changed, so it would be difficult to increase my income much. However, because of the lump sum I should be able to afford to buy an OK-ish house outright, or alternatively the kind of house I would really love to have with about 80% down and 20% mortgage, which I think I could get and could afford.

So, bulls, bears and everyone in between, what would you do in my situation?

ETA: I'm 40, I'm settled in both my jobs for the long term, my kids are settled in the area, and I don't like moving. So when I buy, it's to live in for the foreseeable future. I'm not interested in getting something just for a few years and trading up later.

When did homes become an investment? In your situation I am assuming that the house you buy will be your home for the very long term future. If the house prices fall or rise, it will be your home.

Go out and look at property you can afford in the area you want to live in. If you fall for a house then go for it. If the prices drop by 10 or even 20% over the next 2 or 3 years, it will still be your home. If they rise by 5 or 10%, it will still be your home. It only matters if you want to sell.

I personally believe that prices may fall a little bit over the next 6 -12 months, then recover a little bit for the 6-12 months after that. Pretty much they will bounce along for at least another 5 years. You will have to time it all pretty well.

It seems you have had a few ups and downs over the past few years with your divorse, 2 jobs and managing young children on your own. Don't you want a bit of stability? Settle somewhere and catch your breath. You aren't buying at the peak.

LydiaJ

Hi pingu2209. Thanks for your input.

pingu2209 wrote: »

When did homes become an investment? In your situation I am assuming that the house you buy will be your home for the very long term future. If the house prices fall or rise, it will be your home.

Err.. Yes, that's what I said.

pingu2209 wrote: »

Go out and look at property you can afford in the area you want to live in. If you fall for a house then go for it. If the prices drop by 10 or even 20% over the next 2 or 3 years, it will still be your home. If they rise by 5 or 10%, it will still be your home. It only matters if you want to sell.

My OP was in November, and what you've just suggested is exactly what I did.

pingu2209 wrote: »

I personally believe that prices may fall a little bit over the next 6 -12 months, then recover a little bit for the 6-12 months after that. Pretty much they will bounce along for at least another 5 years. You will have to time it all pretty well.

Well, I haven't much clue what they're going to do. They're rising significantly where I'm living, although I'm not convinced that's going to last.

pingu2209 wrote: »

It seems you have had a few ups and downs over the past few years with your divorse, 2 jobs and managing young children on your own. Don't you want a bit of stability? Settle somewhere and catch your breath. You aren't buying at the peak.

Umm... I thought I'd explained that I'm already settled in this town, with jobs, kids' school, church and friends. It's just the finances that have unexpectedly changed so dramatically. Very soon I won't be able to afford to rent, but I can afford to buy. I looked for houses without letting myself feel under pressure to buy something that wasn't right for the long term, I've found a house that fits the bill that's competitively priced for the area, and I'm buying it. That feels like more stability, not less.