Anyone saving to buy a house for cash?

tara747

marathonic wrote: »

By the way, just so you're aware of my situation, I purchased last December with a 25% deposit.

To rent my place would cost £600 monthly, including £100 rates. My mortgage is over 30 years and costs £330 monthly.

How much would your place be on a 20-year mortgage, though? Then you've also got rates, buildings insurance, life assurance (do you still have to take that when paying a mortgage?) etc.

I want a 10-year mortgage, absolute max. Shackling myself to a debt for 30 years - no thank you. :eek:

tara747

marathonic wrote: »

I'm in Northern Ireland as well. Whether prices are falling or rising is debateable.

We have the University of Ulster house price reports, based on surveys of a cross-section of estate agents, as well as some reports from the UK mortgage lenders giving us guides to Northern Ireland prices.

However, these are from vested interests and don't include cash sales and/or reposessions. The most accurate report we have is the report that was introduced last year and is released on a quarterly basis. This is the report based on stamp duty receipts.

The report for Q3 2013 is going to be released on 20th November but the Q2 2013 report showed a quarterly rise in prices of 2%.

It's true that the Q2 2013 report showed an annual rate of decline of 3% but Q3 2012 showed a decline of 2%. This means that a rise of 2% or more in Q3 2013 will result in the first time that prices have been rising year-on-year since 2007. I imagine the media would be all over such a story.

The reports can be viewed here: http://www.dfpni.gov.uk/lps/statistics-and-research-publications.htm

I'm well aware of this report.

KolaKube

North west Tara x

marathonic

tara747 wrote: »

How much would your place be on a 20-year mortgage, though? Then you've also got rates, buildings insurance, life assurance (do you still have to take that when paying a mortgage?) etc.

I want a 10-year mortgage, absolute max. Shackling myself to a debt for 30 years - no thank you. :eek:

Why on earth would you want to compare rental costs to a 20-year mortgage? For an accurate comparison, the rental costs should be compared to an interest-only mortgage (together with all the costs associated with ownership of course).

I don't get why people shy away from a 30 year mortgage which, together with costs, results in a £330 + £100 + £12 + £100 = £542 outlay (that's mortgage + rates + insurance + estimated monthly maintenance) and complete ownership of a home in 30 years.

These same people have no problem paying £600 for rent every month, likely increasing with inflation, with nothing to show at the end.

Provided a mortgage represents a relatively low proportion of your salary, it shouldn't worry you how long in takes to get it totally paid off, as long as it will be paid off eventually.

With ownership, you do have the added risk of interest rate rises but that can be alleviated by fixed rates if required. Also, interest rates are unlikely to rise much beyond their long-term average over the next couple of decades but rents will continue to rise indefinitely (with the odd brief reduction when we're in unusual economic circumstances).

lilyp

I am in agreement that the maths doesnt make sense but if you feel safer / happier / better saving cash then go for it.

My partner is from NI and I am reluctant to move there at the moment but we often talk of one day buying something over there. It seems all his family work for minimum wage and live in 5 bed detached houses where we squash into our 2 bed eot in Southern England for the same amount :j.

Will be subscribing to follow your progress. :beer:

saverbuyer

The maths maybe don't make sense for the North West of N.I but certainly do for Belfast, Particularly South Belfast.

For the top end of the market in NI (and South Belfast is the top) I can rent a house for substantially cheaper than an interest only mortgage and rates would cost me.

The same probably applies to some of the nicer areas in Derry. Limavady road, Talbot Park etc.

Housing benefit sets floor on rental prices in N.I. Rents here haven’t really raised in the last 10 years.

I'll be doing the same as you Tara. Paying with cash if at all possible and if not I'll have a mortgage less than 10 years.

Prothet_of_Doom

Provided house prices are not rising, and rent is no more expensive than paying the interest on a mortgage then clearly you might as well just save up.
I think that I would make sure I had some life insurance and critical illness insurance, but it gives you alot of flexibility which buying a house doesn't.
I own my own house, bought with a mortgage which was paid off outright about 3 months ago, having bought in 1998 and seen prices quadrupple in 10 years, to drop back to about 3 times where they were when we bought it. There is no way that with a rising market we could have saved up £50K before that £50 needed to be £150K (£200K at the peak).
What i'm saying is that you need to watch with a hawk the price rises and you might want to jump in with a much smaller mortgage as they start to rise.
Alternatively, as You'll have a massive deposit, you might change your mind and go for a nicer house in a nicer area and a massive mortgage.
But I digress... My first statement "Provided house prices are not rising, and rent is no more expensive than paying the interest on a mortgage then clearly you might as well just save up" needs the words "and you'll have the flexibility to change your plans should you wish to"

Prothet_of_Doom

Having said all that, I've got about £40K in my Ltd companies business (once I take off the Tax I owe) and this is growing about £8K a year. I would like to take on buy to let, as a long term investment, and have procrastinated on the simple choice which is buy outright a small flat in a dodgy part of Liverpool, or take on a 50% BTL mortgage on a nicer house in a less dodgy area, or wait 5 years and hope that prices don't rise.

of is NOT my middle name...PROCRASTINATION might be.

Prothet_of_Doom

tara747 wrote: »

I want a 10-year mortgage, absolute max. Shackling myself to a debt for 30 years - no thank you. :eek:

I took on a 25 year mortgage and paid it off in 17. The last 10 years of those 17 were at a 10 year fixed rate, and I would have paid it off in 15, but I did some sums at 14 Years and reduced the monthly outgoings to keep it going to the end of the fixed term.


If you take one on for 30 years and overpay, it becomes a 10 year mortgage anyway.

FloppyDisk

Not relevant