First time buyers - will you or won't you?

MonkeySaving?

I'm in group 1, we pay £595 a month for a house in Matlock, Derbyshire, the house has been valued @ 250K, the rent therefore is less than half the cost of the equivalent mortgage on the property and i pay that difference into high interest savings accounts Renting for me > Buying

seraphina

Once we've cleared our debts, we'll be saving for a big fat deposit and buying a house which will suit our needs for the next 10 years or so (ie big enough to allow us to have kids and not force us to move).

I don't really care how much a house costs as long as we can afford repayments on a mortgage that allows us financial leeway (ie one that we can either afford to pay on one salary, or one that allows us to save at the same time so we have a pot of savings to keep us going for 12 months or so if one of us loses our job). We will obviously be adjusting our expectations of what we can afford to buy accordingly - we probably won't be able to afford a top-spec house.

I don't see a house as an investment, it's a place for us to live. That said, we're not particularly enthusiastic about buying when prices are at their highest. But as we would buy a house based on affordability, if the market crashed the day after we moved in, it would be annoying but would make no impact on our ability to afford our house.

MiserlyMartin

I want to trade up from my first house that I bought 10 years ago, but I refuse to do it at these crazy prices. I cannot take the risk of taking on such a huge mortgage debt for a modest 3 or 4 bedroom detached. These are quarter of a million pounds, for something that 10 years ago was affordable. In the USA and Oz these are average with low prices. Property is way overpriced and a correction will have to come at some time, question is when. In the meantime I will sit and wait. I can't allow myself to be caught in the debt trap.

jyonda

seraphina wrote:

Once we've cleared our debts, we'll be saving for a big fat deposit and buying a house which will suit our needs for the next 10 years or so (ie big enough to allow us to have kids and not force us to move).

I don't really care how much a house costs as long as we can afford repayments on a mortgage that allows us financial leeway (ie one that we can either afford to pay on one salary, or one that allows us to save at the same time so we have a pot of savings to keep us going for 12 months or so if one of us loses our job). We will obviously be adjusting our expectations of what we can afford to buy accordingly - we probably won't be able to afford a top-spec house.

I don't see a house as an investment, it's a place for us to live. That said, we're not particularly enthusiastic about buying when prices are at their highest. But as we would buy a house based on affordability, if the market crashed the day after we moved in, it would be annoying but would make no impact on our ability to afford our house.

For a start you should care how much a house costs and not just look at the monthly payments as you'll be paying for it a very long time and the longer you pay the more the interest stacks up. Do you want to be paying off a mortgage in your retirement? Do you want an intergenerational mortgage which doesn't even get payed off in your lifetime? If people sign up to long term mortgages they just raise the bar and everyone now has to pay more for exactly the same thing. Interest rates can go up too so an affordable monthly payment today may double tomorrow. It's not out of the question for interest rates to be 9 or 10% in a few years when a fixed rate period runs out. Imagine that!
If you're planning on having kids then you'll have extra expenses and less income to put away in case of hard times. Childcare is expensive so it may not even be worth returning to work especially with 2 or more children to look after. Then there's maintenance on the house and furnishing it too. Plus you'll probably want to go on holiday occasionally and drive a decent car which won't break down on you.
So I'd say it is extremely important you care how much you are paying for a house.
Losing your income is not the only pitfall of getting a mortgage.

Good luck!

seraphina

jyonda wrote:

For a start you should care how much a house costs and not just look at the monthly payments as you'll be paying for it a very long time and the longer you pay the more the interest stacks up. Do you want to be paying off a mortgage in your retirement? Do you want an intergenerational mortgage which doesn't even get payed off in your lifetime? If people sign up to long term mortgages they just raise the bar and everyone now has to pay more for exactly the same thing. Interest rates can go up too so an affordable monthly payment today may double tomorrow. It's not out of the question for interest rates to be 9 or 10% in a few years when a fixed rate period runs out. Imagine that!
Losing your income is not the only pitfall of getting a mortgage.

You missed my point entirely.

When I said that I don't care how much a house costs, I mean that the actual number isn't important - it's affordability that matters. I thought I made it abundantly clear in my first post that we would be saving for a large deposit (therefore no 100% mortgage, and I don't know where you got the idea of an intergenerational mortgage from in relation to my situation).

Whether or not the market rises or falls will hopefully not make much difference, as we are planning to buy a house that will suit our needs for a long time (therefore taking us out of the market) and when considering affordability we will of course be considering what will happen should interest rates rise etc. Of course you can't plan for every eventuality but we'll make very sure we have most options covered.

We aren't going to get pressurised into buying a house because of the state of the market - we will do it when we are ready and with a level of financial risk which we are comfortable. That level is not high, which I though was clear in my original post.

jyonda

You can lead a horse to water.......

Phill_1981

I'm in Group 3

lush_walrus

jyonda wrote:

You can lead a horse to water.......

Yes, but I hate to say it, but you really don't know what is going to happen i the future...You can only guess like the rest of the population.

So it should be more: You can point a horse in the sort of direction, where a friend of a friend told me that according to historical information of 30 years ago where there was simular weather to today, there was some water so there might be some water today or there might not be some water till 10 years time...

So many experts and soooo little time!

[Deleted User]

Group 3 - currently renting good size room in terrible, horrible 7 bedroom rundown house in Zone 3 London (520pm all bills included), have saved for 3 years to move out to Zone 6 into a loverly little nearly-new mid terrace with gf. Mortgage is 3.5 times joint income, which I don't think is too bad.

We're buying because we want a home and want to live together, not as a property investment. People still do this, right?

Was slightly upset this weekend as I was in Manchester and walked past an estage agent.. it's sooo much cheaper there!

izoomzoom

We are in group 3.

We are purchasing a 3-bed shared ownership property.

We have waited 2 years to get onto the property ladder and even then we were being told, wait wait wait.

As laymen, there is nothing we can do. If the market wants to crash, it is going to crash, whether we buy or not.

We don't plan on moving soon, as will just have to see, like the rest of the population what the real story is in two years time when we have to remortgage.