To Save or Buy?!

mcc100

Almost all posters on here have a vested interest one way or the other and will give you the advice that would benefit them.

You are more likely to receive less biased opinions on the House Buying, Renting and Selling forum and I suggest you try posting on there.

Cleaver

littlebearbeer wrote: »

Hi all,

Sorry if there are other answers or discussions already in the forum but didn't really get anything out of the search function!

My partner has been left some money from his grandmother, approx £50,000 and we are wondering whether to save this money whilst we still rent (£850pm) or go straight into getting a new house/mortgage?

Savings seem pretty rubbish but is there also a chance of waiting out for house market crash?

Any ideas or suggestions would be most welcome... we don't really know where to start!

Don't try to second guess or time the market, it's pointless. There's people on here who are 100% certain house prices will crash and others that are 100% certain that they won't. Here's my twopennth from a previous post about what to consider when buying:

http://forums.moneysavingexpert.com/showpost.php?p=42603892&postcount=109

Cleaver wrote: »

To a certain extent when you buy a house is largely irrelevant, at least in terms of mortgage rate and the price of the house. If I were a FTBer today, I'd be asking myself the following questions:

• Do I have at least a 20% deposit for the house I want?
• Am I buying a house which seems good value? By that I mean, not my own definition of 'good value' ("pah, that house on for £200k is blatantly only worth £100k...". I mean a house that is similar to 2005/6 prices, or isn't priced at top whack, street record price.
• Can I get a mortgage for 4% / 5% fixed for five years or so?
• Is my mortgage repayment 35% or less than my monthly pay?
• Am I ready to see my house go up and down in value over the next decade? Am I ready to face interest rates at 8%?
• Am I ready to see further falls of maybe 10% or more and just be happy that I've bought a house I love, at a rate I can afford that I'm in for the long term? Will I be comfortable seeing my house fall in value?
• Do I really feel that I want to buy a place rather than renting one? Do I know why I want to buy rather than rent?

If you can answer 'yes' to all of these, then buy a house. Stop worrying about price falls, stop trying to time the market and stop over analysing. You're owning something for decades and decades with hundreds of unknown factors, but you'll probably end up okay. If you answer 'no' to any of the questions, then don't buy a house.

reweird

Cleaver wrote: »

Don't try to second guess or time the market, it's pointless. There's people on here who are 100% certain house prices will crash and others that are 100% certain that they won't. Here's my twopennth from a previous post about what to consider when buying:

http://forums.moneysavingexpert.com/showpost.php?p=42603892&postcount=109

Oh that's clever, you linked to your own post. For every second you try to justify yourself there are hundreds of thousands who don't and will never believe your lies. Enjoy the shitstorm.

Radsteral

doire wrote: »

One of the biggest decisions of your life and you come on here for answers? Good luck with that!

so where to start? go to a mortgage adviser on the high street that looks to bite you on both sides as soon as you sign a piece of paper;)

i have been a silent forum member here for well5-6 years and the information gathered from non profiting members had armed me with almost everything to manage to get a house when i was told by everyone that there is no single chance , and to have things in order .
its the best forum i could every find for almost every thing concerned , .

Cleaver

reweird wrote: »

Oh that's clever, you linked to your own post. For every second you try to justify yourself there are hundreds of thousands who don't and will never believe your lies. Enjoy the shitstorm.

What the...? I don't even... Erm...

andybenw

littlebearbeer wrote: »

Hi all,

Sorry if there are other answers or discussions already in the forum but didn't really get anything out of the search function!

My partner has been left some money from his grandmother, approx £50,000 and we are wondering whether to save this money whilst we still rent (£850pm) or go straight into getting a new house/mortgage?

Savings seem pretty rubbish but is there also a chance of waiting out for house market crash?

Any ideas or suggestions would be most welcome... we don't really know where to start!

Thanks for reading

Depends on how much a place round your way costs compared to your earnings and what LTV your 50K will give you. Round here you could pick up a 2 bed flat for 100K. With 50% already paid off then it's a no brainer to buy as you'd also be getting a nice low interest rate. If you're looking at a 250K place though then the LTV shifts dramatically to 80%. The juiciest mortgages then dissappear, and the mortgage payments will be obviously much higher regardless due to price. You'd be able to save much less here for your next move up so much less appealing.

Remember not to base your mortgage on the maximum you can pay , but to allow for such things as possible pregnancy,redundancy etc. always have enough spare cash in the bank to fund yourself for a few months in case you need to sell up.

andybenw

And to add. As long as you are comfortable paying your rent and are able to save at the same time there is in my opinion no real rush. Prices will tick along without moving much in the next couple of years unless something drastic happens. and if it does, it will probably be to your benefit by dropping prices a bit. Though don't believe these crazy fools that talk about huge drops. Prices in most areas have already had their drops after the credit crunch and low interest rates have stabilised things.

Jimmy_31

Pimperne1 wrote: »

Which banks?

The ones asking for higher deposits for mortgages.

Jimmy_31

RenovationMan wrote: »

Where is 'here'?

We have established it's not Oldham but that still leaves quite a large area to cover!

Just before you get to oldham.

Jimmy_31

AliceJenkins wrote: »

Where do you live Narnia? or another make believe location?

I live in never never land.