Should I Buy Now, Or Hold My Horses?

PurpleKiwi_2

Although I'm on a low wage I've been assured by a mortgage broker that with my realistic expectations of the property I can afford, my deposit and the affordability calculations they've undertaken I should be able to obtain a mortgage that would still be affordable even at 12%. Which, given how much I'm paying in rent and the standard of the property I'm living in, is a very attractive option; I'd rather live in a dump I can do up slowly, than a dump where no matter how much I badger the landlord nothing ever gets done. But given that I am on a low wage at the moment, should I just hold my horses until I get a better job? Or at the very least hold out for a few years, putting more money into my savings, so that even if I stay in this job I at least have even more flexibility in terms of what I can put down as a deposit?

Is it worth putting yourself through the process of trying to get a mortgage just because the repayments are more affordable than the rent you're currently forking out? Or would it be better just to sit down, be patient, and look for somewhere in 10 years time when I'm not a 26 year old graduate in a stop gap job?

dgtazzman

Would you rather pay the landlord's mortgage off, or pay your own mortgage off? If you can afford it, which by the sounds of it you can, jump onto the property ladder sooner, rather than later. Rent prices are going up as demand keeps rising, mortgage interest rates are still near a historical low, but are starting to edge up, if you wait too long, you might be priced out of the market.

It is very hard to save money to buy while still renting and the equity you build up in a property you own yourself can be used as a stepping stone to the next, hopefully better property. House prices in our area have gone up 7% in the last year, you'd be hard pressed to find a savings product that offers that kind of interest rate...

Also, I'd be surprised if Help To Buy survives the next elections, if that is something you are considering.

Yorkie1

If you are confident that you are not likely to move area (e.g. job, to be with a partner) in the next 3-5 years, and can afford / want to buy now, then I'd probably go for it too.

Crystal ball time, but I don't think house prices are likely to continue dropping for much longer, if at all. Unless you are confident that you will achieve a pay rise at a given point which is significant enough to outstrip the likely house price rises by then in your area, then you may find yourself overtaken by the property market.

The one thing that concerns me is your reference to being in a stop-gap job. If there's a possibility that you may have to move to get a job that you want, then buying probably isn't a good idea. It costs a lot of money to sell a house and buy a new one. Don't rely on the idea of letting the property out if you need to move - this isn't for everyone, as you can tell from the many posts on the house buying board from 'accidental LLs'.

Eviesmummy

I've rented for the last 12 years, waiting for that 'right time' to buy to come along. In the mean time a hubby and a daughter came along. Had I bought somewhere in the first instance my mortgage (which would have been substantially smaller because prices were much less) would be at least half paid off. Instead of that I'm just in the process of buying my first house and starting from scratch. Had I had a bit more forethought I'd definitely have bought much sooner.