Buy or stay put??? Any advice please

Tennis_Star

cashsaver wrote:

Hi, I am looking for some advice please.

Is it a good time to buy now or stay renting?

I have a hubby and 3 kids and live in rented Housing Association house. OH has worked hard to better us financially and is now earning a good salary. However, we are both 40 and are a bit wary of such a big commitment.

Friends tell us to enjoy ourselves and don't commit to a mortgage..... others advise to buy before we are any older!!!! Any comments please?

Hello there ive just read all the replies and at the risk of getting shouted down my feelings are as follows:-

There are pros and cons for both options - but bear in mind all monies paid in rent are as good as throwing your money away - at the end of it you have nothing to show for your outlay.

Consider how much you are paying at present in rent and how much extra you would have to pay for a mortgage of your choice - you may be pleasantly surprised.

Historically property prices over a 10 yr span have always increased - what however has happened is that a lot of people have overstretched themselves when buying and then due to unforseen circumstances have got into difficulties.

I wish you the best of luck in what ever decision you chose in the end.

LittleTinker

I agree with Tennis Star.

Renting is dead money and you will never see it again. All you are doing is paying someone elses mortgage half the time. And a mortgage may not work out any more expensive.

Yes, you have to think about repairs etc etc but definitely worth it because of the asset you will gain.

I dont understand when I hear "I cant afford a mortgage, I have to rent"....if you can pay rent, you can pay a mortgage. The trouble is, some people over stretch themselves.

Theres no reason why you can't have a mortgage and still enjoy yourself you know :-)

lynzpower

aarrgh this dead money argument AGAIN!!!
:wall:


historically prices have increased- only good if you can sell up and dramatically downshift, either to much smaller property, or cheaper area. Im sitting here in a flat worth 1/4 of a million, only good to me when I SELL IT

the asset only gains when you sell up, where do you move to????

"all you are doing is paying someone elses mortgage half the time" what and paying interest to the bank every month isnt dead money either? On an 80k mortgage insterest to the bank alone is somewhere in the region of £400 a month. On a more realistic 160k mortgage £800 a month on average is paid to the bank in interest every month. I have put this in simplistic terms, obviously there is a sliding scale of the amount that gets paid off gthe longer the term is and so forth, this is really just an example. ANd of course when interest rates rise, that 800pcm can turn into 830 pcm and on and on.

they are BOTH dead money, it just matters more which one you prefer

chugalug

You also need to consider that if any repairs need doing you're responsible, a bit of a shock if you're used to your landlord doing them.

I'm with lynpower on this. IMO if you have a nice property why not rent. Its not like the private rented market where you are paying someone's mortgage and you have to move regularly. You can stay where you are indefinately or swop if you want to move. Also, your rent is cheaper than if you were renting on the open market.

The old dead money argument doesn't always apply - you're 40 now, you'll be retired when you've finished paying the mortgage. How will you afford everything then? If you were private renting there'd be no question, it would be to your advantage to buy but a secure tenancy at a reasonable rent? Also consider job loss, bereavement, divorce etc any of which can change your circumstances dramatically - how would you pay the mortgage then? At least with renting you have the fall back of HB. What if you have to go into residential care when you're older? Who'd have your 'asset' then?

Having experienced both, I wouldnt swop my HA tenancy for anything.

cashsaver

Thanks for all your views... I will try and take them all on board.

Just to give you a better idea of why I asked the original question... we are in a 3 bed semi in a lovely area.... quite small house and garden though.. 3 boys so 2 are sharing. Hubby earns (with compulsory overtime) if there is such a thing 48k...... I'm teaching assistant part time to fit in with term time hols etc and earn around 6k. We have around 8k savings at mo. rent is £318 pcm and similar to buy in our location (we live in South East) is around 180k.
4 bed would be 235k++++. Yikes.

4 years ago we were struggling after a business venture didn't come off.... that's a whole different story.. so we 've clawed our way out of it and are now in a position where we are no longer living hand to mouth. We have enjoyed a few fabulous family holidays. Should we now throw our money into more savings toward bricks and mortar or enjoy it whilst we are still relatively young and can give our boys some great memories.... I appreciate all your replys... seriously... and will chew it all over with OH.

cattie

As a bereaved parent I say yes, make sure you give your boys & yourselves some good memories. In my opinion they are priceless and this is much more important than wondering whether to lumber yourself with the enormous debt and tie a mortgage can be.

You only have £8k savings so are not in the best position financially right now to be considering taking on a mortgage. You'd need to save a good bit more, so when you have built up your savings in a couple of years you can review the situation. Perhaps house prices may evenhave stabalized by then. Or the interest rate may have risen enough to frighten you. :eek:

Enjoy your time with your boys especially as you're not having money worries presently. Your housing & living conditions sound perfect, especially with a nice low rent of £318.

cashsaver

Thanks cattie, you really have underlined what is important... thanks for your input... much appreciated

A_Nice_Englishman

Cashsaver - with an income of over £50K and a subsidised rent you should be able to save quite a bit every month. Work out how long it would take to save up to buy a house for cash. You might be pleasantly surprised when comparing it to how long it would take you to buy the same house on a mortgage.

F_T_Buyer

People really shouldn't be debating future house prices if they don't understand this dead money issue.

If your rent was £1 a month, would that be dead money? Of course not. So where would you draw the line??

Where the rent equals the interest maybe? What about repair costs?

cashsaver

A_Nice_Englishman wrote:

Cashsaver - with an income of over £50K and a subsidised rent you should be able to save quite a bit every month. Work out how long it would take to save up to buy a house for cash. You might be pleasantly surprised when comparing it to how long it would take you to buy the same house on a mortgage.

Right.... where's the calculator????!!!! Assuming prices don't rise too much more!!