Well.. i finally did it. Purchasing my first properdee innit :)

Batchy

congratulations... hope you enjoy your new home... (not investment)

Well done, have fun and enjoy it.

I too am doing the same... time is right!

neas

I know house prices will fall... but i am unwilling to wait 5-8 years until the next 'window' is there.

I truly believe that the time was right for me. I had a 33% deposit/equity/.. which will buffet me against falls... and I want to buy a house in 7-10 years time to increase size.

My reasoning i've explained but people who are more close to this subject take offence, and I understand that, that if they have low equity they'd be worried about losing it.. and so would I if it went to about 25-30% drop (as i'd be unable to remortgage).

Ill explain again:

If i buy now i can pay 560 a month mortgage (of which the interest for the first 5 years is the same I was paying in rent). During this time I can overpay my mortgage down and get on with my life and start a family etc. If i waited longer sure i could save more of a deposit, sure house prices may crash or may stagnate but nobody has a crystal ball, just a best guess and gut feeling. so the possibilities are:

1. I wait 2 more years, start family in rented and am able to buy at a 20% discount... with a 3.99% mortgage too - Likelyhood = not likely (due to low mortgage rate)
2. I wait 2 more years, start family in rented and am able to buy at a 20% discount... with a 6% mortgage - Likelyhood = very likely
3. I wait 2 more years, start my family in rented and am able to buy at a 20% discount... with a 8% mortgage - Likelyhood = less likely
4. I wait 2 more years, start my family in rented and am able to buy at a 10% discount... with a 6% mortgage - Likely hood = likely
5. I wait 2 more years, start my family in rented and am able to buy at a 10% discount... with a 8% mortgage - Likely hood = less likely


As you see its about managing risk.

The risks are:

1. House prices dont drop or drop only a small percentage (say 10%) which wouldnt make waiting worthile.. especially in conjunction with the 2nd point
2. Interest rates rise up to 6% or even worse 8% or god forbid 10%... and although the houses are a bit cheaper or even alot cheaper... I have to take a cringeworthy high interest loan to afford the house... and for the first 2-3 years end up paying more mortgage than what I pay now.


Whereas the only way I can lose out is if after 5 years my house price has dropped 40% and I am in negative equity, i would be unable to sell, unable to remortgage and be at mercy of SVR of current mortgage supplier. I'd have to work hard to pay off loan and be able to move etc.

The way i plan it to mitigate this I will aim to overpay so i reach at least 50% equity by time of 5 year period ending (heck i was able to save 33% over 5 years so another 17% wont be too hard).

Then my next house will be alot cheaper and thus I will be able to afford a larger 4 bedroom house with a drive/garage... when i wouldn't normally be able to.


I told the estate agent this as well.. and while i confused her she agreed it made sense.

kabayiri

neas wrote: »

I told the estate agent this as well.. and while i confused her she agreed it made sense.

I'm hoping you used flip charts and a powerpoint presentation for maximum impact

That will have made her day!

Generali

The cost of any fall in value over a lifetime of property ownership is likely to be negligible. If prices fall then your next purchase will be cheaper anyhow. As long as you don't do anything stupid like expect your house to be a pension as well as a home you should do fine.

neas

Generali wrote: »

The cost of any fall in value over a lifetime of property ownership is likely to be negligible. If prices fall then your next purchase will be cheaper anyhow. As long as you don't do anything stupid like expect your house to be a pension as well as a home you should do fine.

Thats all i've been saying but a few people seem to say im not being truthful.

chucky

neas wrote: »

I told the estate agent this as well.. and while i confused her she agreed it made sense.

to be fair to the agent she probably didn't care what you thought and wanted to make the sale to get her commission

Generali

neas wrote: »

Thats all i've been saying but a few people seem to say im not being truthful.

Well I can't vouch for your honesty but a quick google will bring up a net present value calculator. Put in a loss, a time period and an estimated interest rate and it's pretty simple to calculate how much a future loss relates to today.

mitchaa

neas wrote: »

Had offer accepted on a lovely house, borrowing 3.5 my income on a 3.99% 5 year fix.

Have 33% equity or so and am aiming to overpay mortgage while its on a nice lovely cheap rate.

I do believe house prices will drop again, maybe even to 30%.... but if they do my next house jump will be cheaper in 10 years time so not really worrying.

Why did i not just wait?

1. Life... i've been waiting to buy since dec 2007 (last peak)... i've got more deposit, more security, got married and want to start a family soon. You cant hold out and out for a hpc and put your life on hold forever.
2. Deposit - Deposit went up to 33% equity of property
3. House prices dropped and stagnated duering this period
4. Property - We love the house, the neighbours
5. Price of Property... Mouseprice estimate comes in at 180k... it was bought for 160k in 2004.... price we got it for? 163.5k....


Am applying for my mortgage tomorrow and have already instructed solicitor. Just hope i can get my 3.99% rate in before they release the budget... also hoping FTB exemption is still valid but am prepared for that eventuality if it happens.

So....

what do people think? Do you really think i should wait 3 more years? or have i realised that my current savings/deposit/mortgage rate will give me a 80-90k mortgage by end of 5 year fix... which is pretty manageable.

I do often wonder if people really want to buy houses on here... cause if like me they've waited for years and put their life on hold its a little bit depressing. Once interest rates rise.. prices will drop.... but you wont be able to get a 4% mortgage then... maybe 6-8%... which means even if you wait 2 years for a crash you still won't be able to afford to buy because of the stupid repayments...

either way you damned if you do or damned if you dont. All you can do is hope to find a good discount with a good fixed interest rate... and overpay.

Will you admit that you have missed the boat by about 12mths;)

neas

mitchaa wrote: »

Will you admit that you have missed the boat by about 12mths;)

hahaha didnt miss the boat at all .

While statistics are just those... my house was bought for 160k in 2004.... im buying it at a little over that value.

Meaning personally the price of my house hasnt risen much since 2004, and i haven't been caught out by excessive hpi gains on it.

Secondly, I saved more deposit meaning i timed it right for my mortgage and got a nice 3.99% fix. Sure i could've got a nice 2% tracker or been lucky and got a 0.5% tracker (somehow :O).. but i want security over the next 5 years.

Thirdly, I did look during the crash and as you'd expect nobody was selling 'nice' houses around here.. only repos.. when house prices 'picked' up people put them on market. I.e. the house i bought was originally on for 20k more... but prices in my area have started falling again so i caught it on the down wave again with a good mortgage.

Finally, while i take your joke i think the whole miss the boat thing is strange. We've been looking for our house for 6 months... we viewed 35 houses in total.... changed our minds, lost out on one house and all along because we've waited we eventually got a good deal.

had we bid on the house we got 4 months ago no way would I have been able to get to the price we paid.. and my mortgage rate would've been at 4.49% instead of 3.99%... so it all works out in the end eh?

I think this boat thing is stupid.... it forces people to think they must get a house, any house... but if you are true to what you want and are realisitc you will find a nice house..

mitchaa

neas wrote: »

hahaha didnt miss the boat at all .

While statistics are just those... my house was bought for 160k in 2004.... im buying it at a little over that value.

Meaning personally the price of my house hasnt risen much since 2004, and i haven't been caught out by excessive hpi gains on it.

Secondly, I saved more deposit meaning i timed it right for my mortgage and got a nice 3.99% fix. Sure i could've got a nice 2% tracker or been lucky and got a 0.5% tracker (somehow :O).. but i want security over the next 5 years.

Thirdly, I did look during the crash and as you'd expect nobody was selling 'nice' houses around here.. only repos.. when house prices 'picked' up people put them on market. I.e. the house i bought was originally on for 20k more... but prices in my area have started falling again so i caught it on the down wave again with a good mortgage.

Finally, while i take your joke i think the whole miss the boat thing is strange. We've been looking for our house for 6 months... we viewed 35 houses in total.... changed our minds, lost out on one house and all along because we've waited we eventually got a good deal.

had we bid on the house we got 4 months ago no way would I have been able to get to the price we paid.. and my mortgage rate would've been at 4.49% instead of 3.99%... so it all works out in the end eh?

I think this boat thing is stupid.... it forces people to think they must get a house, any house... but if you are true to what you want and are realisitc you will find a nice house..

I see what you are saying and you are obviously trying to convince yourself that your decision to buy now rather than last year was a good move, but in hindsight, I'm sure you would have liked a further 10% off now as you could have potentially bought the same house or another 1 like it this time last year for 10% less. (Just using national figures, of course area specific could be less or more)

Okay you wouldn't have saved as much deposit, but then you wouldn't have needed so much. You could have perhaps still had enough for the 25% deposit.

Anyway, all's well that end's well. You've got a deal that you are happy with and that's all that matters. You are right, sod waiting any longer.