Had an offer accepted, now experiencing anxiety and buyers remorse

Mojisola

MrMonkey wrote: »

My wife, son and I live in a decent two bedroom housing association flat, and my calculations show that buying a house will bump up our monthly costs by about £400 per month at current rates of interest, even more when the five year fix we have applied for has ended, assuming rates will be higher at that point.

MrMonkey wrote: »

Ironically, the move would put us in a slightly worse location. Currently I can walk to work and my on could walk to his secondary school. The move would add an extra 20 minutes commute per morning and evening (walking to the station and taking the train) to these routines. And about £200 per month in additional travelling costs. But where we are looking, houses are about half the price of where we currently are.

The extra bedroom is there to give us some study space, and to allow us to have guests to visit. As my wife is from overseas it would help to have somewhere for them to stay rather than have our son in our room.

Are there any pros for the move into house ownership?

There's a lot to be said for having a fund so you can pay for the family to stay elsewhere - it's easier to cope with visitors when everyone has their own space.

I'd be thinking seriously about staying where you are.

kimbyanne

We gave up our HA flat last year when we purchased our first house. Quite a few people told us we were mad to give up a HA property, more so because the mortgage was going to cost us £300 a month more than our rent.

However, for us moving was the best thing. We got out of a tiny two bedroom flat and bought a two bedroom house that is at least twice the size the flat was. Its in a far nicer area as well.

Ok, we are paying £300 more a month but we think it was worth it.

If you are happy with your flat, why are you looking at moving?

moneyistooshorttomention

There is no need for the mortgage to go on that long. I presume its a repayment mortgage?

That was the type I chose way back when (ie when I bought my first house about 30 years ago) and have lost count of just how many times I've been grateful I chose that type.

With that....I always intended from Day 1 that I would repay chunks of capital whenever I had the chance and that was exactly what I did. My 25 year mortgage was gone in 13 years, as I paid back a huge chunk, a small chunk, another small chunk and so on and I was then mortgage-free bang on time (ie in my 40s), even though the starter house purchase was delayed until my 30s by my financial circumstances (so was 10 years late).

So...the last thing to think of imo in your circumstances is planning on having a mortgage till 67.

However, at your age, I would do the same in your position as I did in mine and think "Not much longer left to get started in on house ownership. If its delayed any longer I might never get it".

You don't want to be paying rent still come retirement time. I certainly found that, if I hadn't taken my chance for house ownership when I saw it, that I would still be in rented accommodation to this day and wouldn't have been able to retire at my Retirement Age as I did (ie a couple of years ago).

Admitted I'm a 3rd Generation Home-Owner (on my mothers side) so its blindingly obvious to me that that's what you do...but, even thinking things through logically, it does make sense to take this chance.

MadelinesMum

I had a bad experience when I gave up my council house and bought a house. We ended up getting into debt which put a huge strain on our relationship.

Just make sure you can really afford it if you decide to go for it. I know people say money isn't everything but life is pretty sad when you're brassic.

System

What about cutting down on other things such as food/holidays slightly?

Your household income after tax seems to be around £33k per year. That's a good amount.

Mortgage payments seem to be around £7k per year over the 32 years.

What are you doing with the other £26k? Seems alot to me!

Why not put £15k per year into the mortgage and live off the remaining £18k? For example

Food - £3k
Car/transport - £5k
Clothes - £1k
Holidays - £1k
Council tax - £1.5k
Gas Elec - £1k
Phone Broadband - £0.5k
Repairs/Insurance - £0.5k
Restaurants - £0.5k

That's £13k which still leaves £5k to allocate! Heck, I'd put that into the mortgage and be mortgage free in 10 years (10 x £20k, mortgage paid, bob's yer uncle)

moneyistooshorttomention

I took the salary mentioned as being gross, instead of net. Maybe I got that wrong?

Anyways...I can understand this "Ohmygawd that multiple is 4 times the salary". When I took on a mortgage for my starter house at a multiple of 3.5 times my salary I was going "Ohmygawd" too about it (as the norm then was 2.5 times multiple and I was single and realistically not much chance promotion-wise). But I knew I was a pretty sensible sort of person and some couldn't do it...but I could.

However, you do seem to be taking due account of the fact that interest rates are unusually low at the moment and, at some point, will go back up again to normal levels (unlike many others). You also seem practical enough not to have a second child unless you could afford it (ie again - unlike many others).

Some people may not be able to manage it, but you sound like someone who could and would.

MrMonkey

Yes, salary is gross. If I had to stop paying tax and NI that would help, but unfortunately HSBC have not given me information on how to do so!

Thanks for the advice guys. Much as it pains me to do so I think that I should step back from the house purchase for now. I would love to be a homeowner, but the finances just seem arranged that if anything were to go the wrong way for me (redundancy, cut in pay, interest rate rise, fall in value putting me on a worse LTV) then it would be more of a squeeze than I can comfortably manage. Whereas in my current situation I can save up and hold out for a 'correction' in market values.

More space would be great, but the financial security offered by my current situation takes priority for me at this time.

Snakey

You can cover most of those risks - redundancy insurance, long term fix on the mortgage etc.

Your salaries should go up, even if only by inflation, while the debt will stay the same. In 32 years' time £165k will feel more like £40k.

In ten years' time your kid will be either moved out (allowing you to downsize if you can't afford to keep the place) or paying rent, so beyond that point you shouldn't need to worry so much.

Presumably you - both of you - wanted your own home badly enough to get this far?