First time buyers, some unbiased real opinions needed

Debt_Free_Chick

phlash wrote: »

The one thing that did make me bite my tongue, was the "There's only one thing that stresses me about the whole thing... that if there were to be a crash, and we needed to move, then we'd be !!!!!!ed. But remember here, we wouldn't be the only ones. There'd be literally millions in the same situation so I'm banking on this not happening."

Indeed A property crash tends to have an effect "across the board" meaning that every comparative property would have the same reduction - including any one you wished to buy. So that your property would suffer the same %age reduction in price as the asking price for the property you want to buy.

Plus ça change, as the French would say

Dead_Eye_Jones

If you think you can afford it, and want to settle, then go for it!

Make sure that you can handle any future rate rises. Go for a longer fix if this is a worry. Make sure you can afford the repayments.

If you are thinking it will be too tight then you should wait, save hard, and work hard and hopefully in the future you will see yourself in a better position.

I notice your location is Croydon, are you buying in the borough? Thankfully snobbery has kept this borough quite cheap and so houses are much more affordable here than many similar areas around London.

Yep prices may go up or down, but the way I figure is when I bought back in 2005/6 I could have waited and well maybe my repayments might have been £50, £100 or so cheaper. But what difference would that make in the grand scheme of things.

The far bigger difference is not coming from the overpayments im making and the 1000s im saving in interest. And oh look prices havent come down yet. iirc the last "crash" took seven years. I could have paid off my mortgage by then and be ready to buy a cheap 4/5 bed detached place !

Its all good. Just make sure you can afford it though!!

wolvoman

There's another major factor to consider, the value of your deposit or equity. This is particularly important when buying with a mortgage because of the effect of gearing.

Over the last few years homeowners have made spectacular gains because of this, however like any high reward option it comes with high risks too.


Let's say you want to spend £300K on a flat using a deposit of £50K and a mortgage of £250K.

If the value of the flat falls in 3 years by 20%, then you will have lost £60K. Ignoring any negative equity issues, you will have lost all your deposit and more. Indeed if the £50K deposit were invested for those 3 years, modest post-tax returns will have grown that to over £60K, taking the total loss to over £70K.

pinkshoes

I think the average interest rate over the last 20 years or so has been about 6.5%, so work out how much money you'll have left on the mortgage after the fixed period is up, then work out how much the mortgage payments will be at double the average interest rate (13%).

If you can still afford them (without starving yourself), then go ahead and buy.

Life is one big gamble. "No risk no gain" is a common expression. Life is all about taking risks. Some people prefer to plod along in life and take none, constantly imagining the worst might happen, others take huge risks, some they win, some they loose.

Personally I take calculated risks, like buying a house.

[Deleted User]

Id say if 175K is less then 3.5% times your combined income and your buying in london then definatly buy. If its 5 times your combined income and your buying in a newcastle subburb then your crazy.

CharleneUK

Sneaky man! LOL.

I'm really glad for this post as it's helped get some perspective on things.

We did a budget and worked out we'd have £600 between us after bills are paid and all essentials are taken care of. I guess as usual I'm getting cold feet AGAIN! Ugh.

I'm not sure how it would work with getting extended fixed deal as we've already had the valuation done, and the longest Abbey were doing was 2 years. I'll have a word with our mortgage broker.

We have a 40k deposit, the house is for £214,000. You know, I just received a call from the building surveyor and the survey will be carried out on Monday.

What I think is, if it's bad new with the report, we'll pull out and wait, as we've (I!!) have still been looking around, and prices have gone up yet again, pushing us right out! So I'm not sure how much the vendor would want to negotiate if there was a problem, as she probably knows now she could get the house for £5k more by now!!

Thanks for all the replies, hubby will no doubt have a read once he's up

mr_ouija

This thread moves fast.

Thanks for all the replies, very reassuring. I completely forgot I had posted this, but am glad for all the advice and opinions. Very helpful.

Thanks.