dont know if i should be buying?

Guy_Montag

CB1979 wrote:

very true, except I don't know anyone who spends £9k on bus journeys each year, when they could buy a car for the same money!

also an IO mortgage would be about £600 a month on that kind of money.

but YOU have to do all the sums and work out what's best for you.

Yeah, but we've already shown that it's cheaper to rent rather than buy.

What's the point of an IO mortgage? It's simply renting off the bank, except you have to pay for the up-keep & repairs of the place (same goes for shared ownership)/

CB1979_2

erm not sure where it says it's cheaper to rent than to buy.

it's all speculative, if she pays £600 a month rent she's paid £7200 a year and has nothing in return.
if she pays £600 a month on an IO mortgage she's paid £7200 a year, not reduced her mortgage amount, BUT has gained if the prices continue to rise (which in Croydon am confident they will) but again it's all speculation.

also some people may like the security of them "owning" their own place, ie Landlord can't just say here you go, you've got to be out in 2 months, etc etc.

djdymond

15k??? god its more depressing than i thought. i cant see us saving 15k between now and jan 2008 AND clearing debts.. is this really what everyone has to go through to get on the ladder??

talk about depressed now!!!!

CB1979_2

lol - nope you can get 100% mortgages as you well know, but you just won't be able to get as good a deals/less products available to you.

PoorDave

Rosie75 wrote:

I can't really advise you on whether this is the right time for you to buy, but I'd suggest being cautious about how much you borrow. £144k is 4.2 times your joint income, which is more than a lot of mainstream lenders will allow you to borrow. At current interest rates of around 5.5% (which may well go up) you will be repaying £850 a month on a 25-year mortgage. A 1% rise in interest rates will take that up to £970 per month. There is a calculator you can use on the Guardian website
http://money.guardian.co.uk/calculator/form/0,,603156,00.html
As you're currently renting you will have a good idea how much additional costs such as council tax, bills, water rates, etc. cost on top, and you will also need buildings insurance, plus some kind of payment protection scheme would be advisable should one of you become ill / lose your job. It's not impossible if you're extremely good with money, but you certainly won't have much of a life. If you are in jobs that guarantee career progression and a decent pay rise each year, then then obviously the belt-tightening would only be a short-term thing.

Nationwide will lend 4.25 times joint income and they're fairly mainstream...

PoorDave

djdymond wrote:

15k??? god its more depressing than i thought. i cant see us saving 15k between now and jan 2008 AND clearing debts.. is this really what everyone has to go through to get on the ladder??

talk about depressed now!!!!

It's what everyone might have to go through now, but not what they would have had to do in the past necessarily. Times are hard.

Shared ownership schemes?

lynzpower

CB1979 wrote:

erm not sure where it says it's cheaper to rent than to buy.

it's all speculative, if she pays £600 a month rent she's paid £7200 a year and has nothing in return.
if she pays £600 a month on an IO mortgage she's paid £7200 a year, not reduced her mortgage amount, BUT has gained if the prices continue to rise (which in Croydon am confident they will) but again it's all speculation.

also some people may like the security of them "owning" their own place, ie Landlord can't just say here you go, you've got to be out in 2 months, etc etc.

this is the sort of ill-thought out attitude I had when I bought my flat.

you have paid your instalments to rent off the bank - personally Id rather rent off a landlord than pay x amount of thousands to the shareholders of my banks coffers from here on in.

I take it you are saving the difference in an ISA or similar? As you should have been advised to do by your broker? I havent- and its coming back to bite me squarely where it hurts.

Now Im selling up, before the whole shebang becomes unaffordable ( coming off my fixed IO product, going onto repayment in this environment would be a massive extra expense for me month on month ) and Im not wiling to pay it. Id rather save the difference in all fairness.

Taling about the croydon market, if im not VERY much mistaken, prices in croydon have simply NOT risen in line with the rest of london, and in fact theres some very reasonably priced property around that way.

eg http://www.housenetwork.co.uk/my_site.asp?id=rylandesrm&house=1
a similar flat around this postcode would be about 80k more.

Guy_Montag

CB1979 wrote:

erm not sure where it says it's cheaper to rent than to buy.

it's all speculative, if she pays £600 a month rent she's paid £7200 a year and has nothing in return.
if she pays £600 a month on an IO mortgage she's paid £7200 a year, not reduced her mortgage amount, BUT has gained if the prices continue to rise (which in Croydon am confident they will) but again it's all speculation.

also some people may like the security of them "owning" their own place, ie Landlord can't just say here you go, you've got to be out in 2 months, etc etc.

But you're not buying with an I/O mortgage! At the end of the term you have nothing to show for it, save 25 years in the same 1 bed flat, then what? It's not like you can downsize really is it?

djdymond

thanks poordave, ill look into that

djdymond

thanks lynzpower, that flat was actually pretty much perfect! which has made me feel even worse, knowing we can have it

ho hum, looks like were stuck in our flat for a couple more years at least...