FTBers - when it all goes wrong?

bodmil

I am just wondering if I can pull on the experience of other homeowners for a bit of advice. I am very cautious and don’t want to take any big risks! Obviously the idea is to scrape as much money together as possible for the deposit plus cash for fees etc, but what about a contingency pot? Assuming a good survey picks up expensive house issues, but what about things like car breaking down or being made redundant etc? Particularly in the run up to buying I am very much used to having a nice cushion of savings should things go wrong, but how much have people spared from their deposit for emergencies?
My plan was £10k but that does amount to quite a considerable sum for a FTB and would move me into a higher interest rate due to increasing LTV. But what’s the alternative? How advisable is it to heavily rely on interest free for a year or more credit cards.

pinkteapot

Assuming no survey issues, I would say a contingency pot could be something like:

£1k for a car disaster
£1,500 for the boiler packing up
Equivalent of 3 months of salary payments in case of loss of income

DannyboyMidlands

You don't sound that cautious if you're considering relying on interest free credit cards. I wouldn't have thought that was at all adivsable.

Once you've stumped up the deposit, will you be in a financial position to build up your savings again?

I'd only feel comfortable if I new that I could live for a year without work.

Mrs_Z

I think it all depends on your disposable income and how secure your job is! I would not recommend to rely on interest credit cards for a contingency, but assuming that you can comfortably save say £500 pcm each month after your mortgage, bills, ect, then assuming a worst case scenario, that'd be £6,000 a year - which would certainly amount to an emergency fund. So in a short term, it could be a solution.

In fact, I'm about to do this myself - as am thinking of pouring all of my savings to clear a big chunck of the mortgage balance next month, which will effectively wipe out the financial cushion. However, I know that I'll be able to build it up again month by month and have a new M&S 15 month interest credit card as a back up, in case there's a big unexpected expense.

Depending on the circumstances, you may also have the option of an emergency loan from Bank of Mum & Dad???