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To Buy or Not To Buy?
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Gareth_O_2
Posts: 4 Newbie
An old chestnut, I know but here goes...
We are a couple on the horns of a dilemma at the moment. We're renting while paying back combined debts in the region of £30k (all should be paid off in around 5 years). The debt's not a huge issue - we're both on decent wages and slowly but surely paying the loans back. The monthly balance sheet is best described as comfortable, rather than spectacular but there isn't a great deal to go around once bills and loan repayments are taken out.
We've been looking at whether or not to buy recently ... theory being that we could do with getting on the ladder sooner rather than later. However we've just had some mortgage quotes based on a sensible FTB price in our area, and our hearts sank. The repayments in the first three years would be roughly £200 per month more than we pay in rent at the moment (shooting up to £400 more in 3 years), AND we would have to take out an extra £2k loan somewhere to cover conveyencing and stamp duty etc. Now, all of this would be just about affordable at a squeeze (a big squeeze!). However what do people think? Should we bite the bullet and go for it, or continue to rent for a couple of years and try to reduce our debt (running the risk that the bottom of the property ladder move further from our reach?)
Any ideas?
We are a couple on the horns of a dilemma at the moment. We're renting while paying back combined debts in the region of £30k (all should be paid off in around 5 years). The debt's not a huge issue - we're both on decent wages and slowly but surely paying the loans back. The monthly balance sheet is best described as comfortable, rather than spectacular but there isn't a great deal to go around once bills and loan repayments are taken out.
We've been looking at whether or not to buy recently ... theory being that we could do with getting on the ladder sooner rather than later. However we've just had some mortgage quotes based on a sensible FTB price in our area, and our hearts sank. The repayments in the first three years would be roughly £200 per month more than we pay in rent at the moment (shooting up to £400 more in 3 years), AND we would have to take out an extra £2k loan somewhere to cover conveyencing and stamp duty etc. Now, all of this would be just about affordable at a squeeze (a big squeeze!). However what do people think? Should we bite the bullet and go for it, or continue to rent for a couple of years and try to reduce our debt (running the risk that the bottom of the property ladder move further from our reach?)
Any ideas?
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Comments
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Difficult one to answer & only you can decide what is right for you.
I don't see the point in taking on more debt, with a loan for conveyancing etc, try saving the money for the costs involved. I assume you declared all your debts to the mortgage advisor you saw, so if take a couple of years to clear some more of the debt & house prices do go up, they may stay affordable to you.
Some lenders offer mortgages of 125% of the property value, have you tried looking into one of those to see if they are suitable for you? Personally I wouldn't touch them with a barge pole.
Do not assume that house prices will go up, they may go up or stay static.0 -
I'd always advise people to carry on renting if you really can't afford to buy at the moment. You never know what is around the corner & if money is tight you risk losing your home if you have a mortgage you are struggling to pay.
With renting, if times are tough finacially you can always claim housing benefit & at least be able to keep a roof over your head.
When you take on a mortgage you should ideally have enough in the bank to cover at least 6 months of mortgage payments should sickness or unemployment occur.
Concentrate for now on clearing your debt & think about a mortgage when you have managed to save a bit for a deposit and the legals would be my advice.The bigger the bargain, the better I feel.
I should mention that there's only one of me, don't confuse me with others of the same name.0 -
excellent advice.cattie wrote:I'd always advise people to carry on renting if you really can't afford to buy at the moment. You never know what is around the corner & if money is tight you risk losing your home if you have a mortgage you are struggling to pay.
With renting, if times are tough finacially you can always claim housing benefit & at least be able to keep a roof over your head.
When you take on a mortgage you should ideally have enough in the bank to cover at least 6 months of mortgage payments should sickness or unemployment occur.
Concentrate for now on clearing your debt & think about a mortgage when you have managed to save a bit for a deposit and the legals would be my advice.0
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