Buying a house is it worth it?

ziggy2004

We currently have no debts but since they are just paid off we have no assets either.

Based on income we should be able to get a mortgage of up to £120k.

But am I right in thinking that there are no 100% mortgages available at the moment?

High rent means that we have very little possibilities to save up for a deposit.

We could move to a smaller and cheaper house but even then it would take at least 2 years to save up for a deposit.

Are there other options? Could we take out a loan to cover the deposit? Financially this would still leave us around £100 a month better off if we look at some of the houses available around here.

Oneday77

A loan is not allowed for deposit purposes. Also with rates as they are now you may be £100 better off but they will rise someday, they can't get any lower.

Buying a property even if it goes into slight negative equity it is typically less money lost than paying someone else mortgage when you rent from them.

Soot2006

Only you can know if it's right for you to buy a house.

What I will say is that when OH and I made that decision, we didn't have much money left at the end of the month and were living in a fairly nice rental. We moved into the cheapest we could find and agreed to live in romantic poverty for a few years. By that I mean that we didn't deny ourselves a good life, we just decided to invest current luxuries into the future.

And you know what - it was fun!

We both worked hard, lived on a budget, saved all we could and several years later were in a position to proceed. (as it was we were lucky as it turned out my mother had also saved for us when she saw how hard we were working so we ended up with a better deposit -- family "donations" are certainly something worth looking into as well) ...
We ended up buying the best house within our price range, years of austerity had made us quite good at ignoring the higher price brackets which means we now have an affordable mortgage as well ...

So the way I see, if you WANT to buy a house as a general life plan, you've got to start saving for that deposit sometime. The years pass quickly and you could easily in 6 years look back and wisg you'd done it earlier!

Davesnave

Soot2006 wrote: »

Only you can know if it's right for you to buy a house......

The years pass quickly and you could easily in 6 years look back and wisg you'd done it earlier!

Never mind just 6 years, think where you'd like to be when you are hitting retirement age.

Do you think you'll fancy paying someone else rent every month and enjoy the relative insecurity of shorthold tenancy at that time of life?

As the above poster says, only you can decide. And remember, putting off a decision is still a decision.

Notmyrealname

There are no 100% mortgages. And whilst there are 95% ones you get kicked in the nuts with the interest rate.

A friend took out a mortgage a few months ago. We took one out a year earlier. Both mortgages are for £95000. Ours is 75% LTV, his is 95% LTV. Both got good credit with clean records, he has a higher income.

His mortgage payments are £200 a month more than ours purely because he could only put down a 5% deposit.

Bluemeanie_2

ziggy2004 wrote: »

We currently have no debts but since they are just paid off we have no assets either.

Based on income we should be able to get a mortgage of up to £120k.

But am I right in thinking that there are no 100% mortgages available at the moment?

High rent means that we have very little possibilities to save up for a deposit.

We could move to a smaller and cheaper house but even then it would take at least 2 years to save up for a deposit.

Are there other options? Could we take out a loan to cover the deposit? Financially this would still leave us around £100 a month better off if we look at some of the houses available around here.

That is the harsh reality I'm afraid. It does take a while of hard savings and sacrificing!

Doshwaster

ziggy2004 wrote: »

High rent means that we have very little possibilities to save up for a deposit.

We could move to a smaller and cheaper house but even then it would take at least 2 years to save up for a deposit.

Two years doesn't sound too bad at all. I'm sure most people on these pages took longer than that to save a deposit. In the grand scheme of your lifetime and paying off a mortgage, 2 years is nothing.

Just think of it of going on a financial diet for 2 years.

ruggedtoast

Regardless of the house issue, if you have no savings and aren't contributing to any each month, then you badly need to start building some up. From your post as it stands you are just breaking even each month which is a precarious place to be financially.

Can you move in with family for 6 months to a year, share, cut your outgoings appreciably?

ziggy2004

I know 2 years is not that long and it is one of the options we are considering.

Financial austerity does not bother me. We live on a tight budget and I am happy with the choice we made to move into the more expensive property as it was the right one at the time.

Going to ask a mortgage adviser about a 95% mortgage as we could probably stretch to that(with some assistance)

Spoke to a family member yesterday. Single pensioner who owns their own house outright but is struggling with the income they have mainly due to high heating bills and a heating system that does not work very well and eats money. Would it be worth trying to find a solution together? Is it possible to get a mortgage to cover 2 properties? The pensioner cannot get a loan/mortgage themselves. Just looking at the figures we would be able to get a mortgage for 120K and one of the houses we are looking at is 100k. Pensioners house is worth around 70k. Is it even worth asking the mortgage advisor?

ziggy2004

ruggedtoast wrote: »

Regardless of the house issue, if you have no savings and aren't contributing to any each month, then you badly need to start building some up. From your post as it stands you are just breaking even each month which is a precarious place to be financially.

Can you move in with family for 6 months to a year, share, cut your outgoings appreciably?

No no family close enough.

We are able to start saving now as we have paid off the credit card.

There have been a couple of changes in our circumstances ( such is life) which means that our income has dropped quite a bit. We will change our circumstances(downsizing in this instance) so that we will be able to build our savings back up. In doing so I am making a spreadsheet to compare our financial situation in a variety of scenarios. Buying instead of renting is only one of those scenarios and I do not want to dismiss it out of hand.

Baileys_Babe

ziggy2004 wrote: »

Spoke to a family member yesterday. Single pensioner who owns their own house outright but is struggling with the income they have mainly due to high heating bills and a heating system that does not work very well and eats money. Would it be worth trying to find a solution together?

Could you not find a solution between the pair of you, where you move in with them for a while. You pay them rent, less than you currently do - if this is reasonable, this will give you the opportunity to save and them their much needed extra income, could be a win win situation.