Potential FTB needs advice

witorwitor

I am a teacher. My monthly income is 2200 and I spend 800 on rent. Over last 2 years I managed to save about 20000 and I am thinking about buying property for 115000 (I can put 18000 for deposit and I would be able to repay 680 per month). I would really appreciate if someone could answer the following questions:
1. Is it a good idea to buy property now or should I wait for property prices do drop even more and to save for bigger deposit? (and keep wasting 800 each month)
2. If you think that I should buy now which mortgage would you recommend - tracker or fixed?
3. Any specific mortgage recommendations?

VIGILANT22

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_4001345

Spangled

witirwitor - no one can give you definitive *answers* to your questions but you will get a lot of *opinion* and *advice* (in the non-legal sense).

1 House prices - very hard to call. Some people think they will drop slowly over the next ten years, stagnating like they did in Japan. Others think the "crash" is over and we'll see modest rises over the coming years. Will depend a lot on what part of the country you are in, eg Northern Ireland has seen spectacular falls in the last year while London saw a mini resurgence (in certain parts). It really is impossible to call. If you're looking to buy a property as a *home* rather than an investment and you plan to be in it for the long term then house price fluctuations aren't such a big deal.

2 Fixed or tracker. Depends on your attitude to risk (the Bank of England base rate can only go up - but it depends on when and how quickly) and how much leeway you have in your monthly finances. The problem with trackers right now is the margin - many are Bank of England base rate plus 3% or so (esp if you only have a 10% deposit). So if the BoE BR goes back up to 5.5% (which it was pre-recession) you'll be *paying* 8.5%. Can you afford repayments at that level? Check the BBC mortgage calculator to see what your repayments would be.

3 Specific mortgage recommendations. Impossible to say without knowing more about your finances and personal situation - so the best advice is to go see a whole-of-market mortgage broker who can talk through all your options with you. One point though: you'd be putting down just over a 10% deposit - I'm afraid that will limit your options considerably as the best deals are available to those putting down 40%+.

Good luck.