First Time Buying

BJ90

Hi all,

First post here, so here goes.

For the past 6 months, I have been renting a house with some friends after deciding that at 24 years old I needed to get out of my parents' house. The current agreement is almost on a "stay as long as you want" basis, the current landlord is very laid back about the situation at the moment, and I don't have any long-term contracts tieing me down. However, this isn't going to last forever, and I think I need to think about my future.

For the past 3 years, I have been putting money away each month, and have currently amassed about £25k in savings. Having scoured the internet for mortgage comparison sites (and calculators that let me know what I'm likely to get) it looks as if I could be offered up to £110k over 25 years for mortgages at a rate I would easily be able to pay back (I am currently earning £24k pa).

I guess I'm really looking for advice on whether it is worth trying to get on the ladder now, or whether I would be better off waiting, saving for another 2/3 years, maybe moving on to a better paid job and being able to secure more on a mortgage? All the while this deliberating happens, property prices are shooting back up and renting elsewhere is as expensive as paying off a mortgage.

I understand that compared to most people my age, I am in an incredibly good situation, but aside from seeing a financial adviser/mortgage adviser, I thought I'd try my hand here first, hopefully some of you will be able to give me some unbiased, world-wise advice!

Thanks.

BJ90

Anybody there?

arbrighton

It's a friday evening, be patient!

Are you sure you could be loaned 90k, that's over 3x your salary and interest rates can only really rise from where they are now.

Property prices aren't going up everywhere....

Kynthia

It's hard to say as whether the time is right to commit to a property and a mortgage is very personal. Do you want to commit to staying in one place now, as you are young and have the freedom to move around should you want or should work opportunities elsewhere arise? Is your work secure as you don't want to risk not being able to pay the mortgage? Do you feel ready for the responsibility of owning, paying the bills, maintaining the place and arranging repairs. How much more will your mortgage and solo bills like council tax be compared to your current rent and bills, and do you want more of your monthly disposable income taken up or do you want to enjoy a few more years of spending your money having fun and going on holiday and seeing the world?

I personally would wait another year or two and have some fun, as well as really doing the maths and ensuring you know the living costs and responsibilities of owning, such as what would happen if interest rates rose to 6% could you still afford to live.

enginesuck

Yes do it. Buy somewhere you could easily rent out if you needed to. I wish I bought at 24. If the payments won't impinge on your life too much then go for it.

kingstreet

arbrighton wrote: »

It's a friday evening, be patient!

Four days between the posts?

BJ90

kingstreet wrote: »

Four days between the posts?

It's why I asked!

Thanks for the comments all, in reply:

- I am sure that I can get over £90k yes.
- Property prices in the East of England (where I am based) are still rising.
- I am content where I am at the minute, and do not envisage the chance of moving elsewhere for new work opportunities in the near future. My work is secure, and will be so for the next 10 years at least.
- Responsibility is my middle name. I wouldn't be asking if I didn't think I was ready.
- Bills are not an issue, as my idea would be to buy the house and rent out a room/some rooms to friends, so I am anticipating that once everything like that is factored in, what I will be shelling out wouldn't be too dissimilar to the rates I am paying now.
- The interest rate question is one I knew someone would bring up in this discussion. I think everyone should be concerned about changes in interest rates, and I'm sure that a lot of people wouldn't be able to afford their current mortgage if interest rates went up to 6%. I don't know what would happen if that were the case, but presumably more defaulting by others, and therefore more houses on the market bringing prices down? Maybe I should wait until the interest rates do go up? Or would the government step in to help out again, as with Help to Buy? Just a thought...

@enginesuck - I have been told this by a number of people, and it makes perfect sense. If I for some reason do end up unable to pay the bills etc. this would be my first avenue for filling the gap.

And for those of you suggesting I should park this idea and have fun, I spent all of last night reading. Rock and Roll I know...

MisterB1959

sounds like a good plan to me, you seem to have considered the what ifs etc. the rent a room scheme is a good choice as it allows a tax free amount to be 'earned', which will contribute to your running costs