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Scared to go from deposit saving to mortgage paying..
Comments
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Not going to step into the fray here
but OP, I think you need to ask yourself why you're thinking about buying now. Is it only because you can afford to and feel that you *should*? Or is it because you feel settled in life and want to put down some roots? If the former, then I don't see any urgency to buy before it feels right. What if you decide to move in a couple of years' time, for work or personal reasons? Property isn't the "safe" short-term investment that it seemed like a few years ago. Just have a quick read through this forum and you'll find lots of people who now feel trapped because they can't sell.
On the other hand, if you feel that it's the right time for YOU to buy then go for it. Maybe you want to move in with someone and start a family and feel that you can now buy a house that would be a good home for a number of years? It's very hard for people who don't know you or your circumstances to give the right advice.
Just make sure that you do the maths - if you do buy, how much equity will you have? You mention the help of relatives - do you really want to buy while you still depend on this? How affordable will the mortgage payments be when interest rates go up?0 -
Bullfighter wrote: »Really? Care to back that up?
As sinbad said things were much worse during the 30s and two world wars. I am not old enough to remember the hunger marches. I do remember my first mortgage was 14%. I remember the hardship endured by miners, steelworkers families et al when UK industry was decimated under Heath and Thatcher. I remember black Wednesday when Britain lost £3.3 billion. I remember Healey having to go cap in hand to the IMF when Britain was broke in '76."A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0 -
Sorry if this is in the wrong place but need help.
I have been saving since i was 16 from my very first part time job I am now 27. Was always saving for a rainy day and eventually my total grew. In the last 3 years i have been saving really hard, social life disappeared as a result and never spent much apart from basic needs. Now i have enough for a decent deposit and with help from family i can afford to buy a house with a mortgage but i am scared. I have been saving for so long and to go from having a bit of security behind you to nothing but a big mortgage payment every month is really scary. How did everyone adjust? I think whats hard is that i have spent my whole life avoiding getting into debt and to jump right into a big one is nerve wrecking.
Hi jay83, it's only natural to be scared ... it's a big step. I don't know your circumstances such as whether you are renting at present? You say you have been saving hard for 3 years and your social life disappeared. Are you renting, paying all your own bills - what I mean is are you currently running your own home, paying all your own bills - not living at home with your parents?
If you are currently running a home at present and budgeting while at the same time saving then you would adjust very quickly. Don't look at it as a massive debt - treat is as paying rent, but at the end of it you will own your own home!
If you do go ahead to buy do not overstretch yourself, workout how much it will cost even when interest rates go up etc. It is a very good time to buy if you can. Considerations - are you intending to live there for years to come? If you know that you don't intend moving away in the future then it is a very good idea to buy - but that is only my opinion!0 -
No, I'm not going to provide evidence to prove that the worst worldwide economic disaster in modern history was a lot worse than what we're experiencing now. I suspect you're just being disingenuous by questioning it's severity, but if you actually believe there's any comparison between the GD and the current crisis then I suggest you rethink your opinions a little.
If we distinguish between initial conditions, transmission, and policy responses we can see several areas where the picture in 2010 is much worse than the late 1920's - areas such as global real estate overvaluation, personal and sovereign indebtedness, outstanding derivatives, global bubbles, and energy scarcity.
These mean that the accumulated imbalances today surpass significantly those preceding the great depression.
The transmission will be a lot faster (globalisation) and the policy responses in the US and China are exacerbating their (and our) problems.0 -
As sinbad said things were much worse during the 30s and two world wars. I am not old enough to remember the hunger marches. I do remember my first mortgage was 14%. I remember the hardship endured by miners, steelworkers families et al when UK industry was decimated under Heath and Thatcher. I remember black Wednesday when Britain lost £3.3 billion. I remember Healey having to go cap in hand to the IMF when Britain was broke in '76.
You do realise that the reason we haven't gone to the IMF today (our debt to GDP is a LOT worse today) is that they simply CAN'T bail us out this time. The IMF is struggling to keep the PIIGS afloat.
In 1976 we begged for £2.3 billion, in today’s money that’s the equivalent of around £12.4 billion.
We printed £200 billion in 2009, effectively bailing ourselves out with the labour of future generations.
In 1976 we were technically insolvent, in 2010 we are actually insolvent0 -
Bullfighter wrote: »You do realise that the reason we haven't gone to the IMF today (our debt to GDP is a LOT worse today) is that they simply CAN'T bail us out this time. The IMF is struggling to keep the PIIGS afloat.
In 1976 we begged for £2.3 billion, in today’s money that’s the equivalent of around £12.4 billion.
We printed £200 billion in 2009, effectively bailing ourselves out with the labour of future generations.
In 1976 we were technically insolvent, in 2010 we are actually insolvent
I have no idea what point you are trying to make and what relevance this has to OPs question."A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0 -
Not going to step into the fray here
but OP, I think you need to ask yourself why you're thinking about buying now. Is it only because you can afford to and feel that you *should*? Or is it because you feel settled in life and want to put down some roots? If the former, then I don't see any urgency to buy before it feels right. What if you decide to move in a couple of years' time, for work or personal reasons? Property isn't the "safe" short-term investment that it seemed like a few years ago. Just have a quick read through this forum and you'll find lots of people who now feel trapped because they can't sell.
On the other hand, if you feel that it's the right time for YOU to buy then go for it. Maybe you want to move in with someone and start a family and feel that you can now buy a house that would be a good home for a number of years? It's very hard for people who don't know you or your circumstances to give the right advice.
Just make sure that you do the maths - if you do buy, how much equity will you have? You mention the help of relatives - do you really want to buy while you still depend on this? How affordable will the mortgage payments be when interest rates go up?
Just like Cissie I am not going to step into the fray which is totally unhelpful to you jay83.
I totally agree with Cissie, and without knowing your circumstances it is hard to advise. You are 27 years old - are you likely to move away, perhaps because of employment etc? You have to carefully weigh up every eventuality as much as you can. What and how much help from relatives?? Would it be a loan?
When I bought the house I did get help from my sister who gave me £4000 at the time to pay for deposit, however I paid her back within 6 months and wasn't a problem.0 -
I have no idea what point you are trying to make and what relevance this has to OPs question.
You stated that things were worse in the 1970's, I'm showing you they weren't. You lost the argument so are now trying to question the relevance of this discussion.
Nothing could be MORE relevant to the OP - someone thinking of entering into a large multi decade debt.0 -
Hi Jay83
Again I am going to ignore the bear/ bull bickering, don't really see how it is helping the OP.
We're in the same situation as you, have a nice little nest egg in the bank and are on the cusp of buying a property. We are very nervous about this as we have enjoyed the security and flexibility of this money for a long time. It has meant I have been able to change career which I know I would not have done if we had a huge mortgage.
However, over the past few months we have been questioning why we have this money put aside? We pay a lot of money out each month in rent but have no security regarding the roof over our head, we're not entirely happy renting and have reached a point in our lives where we desire a home not merely somewhere to live. When we buy the mortgage will be less than the rent with the interest being less than half our current rent.
I didn't see anything mentioning your circumstances so I am not sure what your situation is but if you are single and thinking of buying a small place just for yourself maybe wait a little while! I bought a one bed flat aged 25, within 2 weeks met my (now) husband and sold the flat barely 2 yrs later as it was too small for both of us to live in. This was ok at that time as prices were going up but in the current climate I would suggest buying somewhere you will be happy living in for the long term and big enough for life's twists and turns...
Best of luck with whatever you decide, you seem to have your head screwed on.Saving for an early retirement!0 -
I will ignore the bull too.
I remember having similar scary thoughts to OP and Imelda before I bought my first home when I was 23. I had very little money and finances were desperate but now I am glad that I made the sacrifice.
IMHO, life is about choices. Respect to OP for working hard so that he is now in a position where he can make that choice."A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0
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