Possible first time buyer - advice needed!

Jenni56789

Hoping someone out there will be able to give me some advice as I'm completely unable to make a decision!

I live in Norwich and house prices have been rising and rising in the last few years/months. I've just started earning £29,000 a year and it's dawned on me that at the moment I could just about afford to buy a house rather than rent - and I would hate to look back in five years and think 'why didn't I buy then when I could (and made a few £££)'

I don't have a deposit and don't want to pay much more than I would be paying in rent so would need to get a 100% mortgage, probably even interest only, but essentially I'm thinking why should I pay £600pm renting and end up with nothing after five years when I can pay £600pm on a mortgage and end up in five years with a house worth several thousand more than what I paid for it (if I sell then I'm quids in and in the same positon as if I had rented).

Have I done the maths wrong?? It seems to make sense and I'm being encouraged to buy by family members who have made £££ over the last few years buying and then renting property - but I'm still not sure - am I naive to think that the market will continue to rise? It's strange - a week ago I was fingers crossed the market would crash one day so I could afford to buy, now I'm almost into a situation where I'm relying on the fact that it won't!

I don't mind renting so it's not about having my own home particularly, more the money making potential (or rather the thought of missing out). For info I'm looking at spending approx £130,000 on a two bed north city terrace

Any thoughts/advice would be appreciated

Thanks

Tassotti

You are not going to actually make any money on your main residence. If prices rise, you may be able to borrow against the equity, but you will not be making money unless you sell and downsize.

I looked into my crystal ball and it says that house prices will not crash, but rise slowly until 2015 when there will be another boom.

Jacquie_H

I don't know whether you could get a 100% mortgage or not. In this part of the UK 90% is usual. Lenders want you to have a personal stake in the property, so you will be more likely to stick around if interest rates rise, and repayments get harder. If it's just about making money you could buy to let in a cheaper part of the country, and put the income against what you pay in rent now. That way you aren't as stretched financially.

MissMotivation

Jacquie_H wrote:

I don't know whether you could get a 100% mortgage or not. In this part of the UK 90% is usual. Lenders want you to have a personal stake in the property, so you will be more likely to stick around if interest rates rise, and repayments get harder. If it's just about making money you could buy to let in a cheaper part of the country, and put the income against what you pay in rent now. That way you aren't as stretched financially.

A lot of lenders offer 100% mortgages, it really depends on your personal circumstances whether or not you can get one. Might we worth speaking to an Independant Adviser to get some info and an idea of how much it's going to cost you.

If you wanted to do a BTL then the majority of lenders require minimum of 15% deposit