First Time Buyer

KingKenny

No probs, be happy, enjoy life, its too short, rent and buy when this madness ends.

Good luck!

izzybusy23

Bazlovejoy wrote: »

Our problem is we only have two options renting or buying and it would pain me to rent as i see it as a waste of money.

You know, no offence intended but I am getting sick to death of hearing that renting is dead/waste of money :mad: ... it is NOT in this present climate. I would guarantee that the rent you would pay on a house is a damn site LOWER than repayments on a mortgage for the same property.. therefore NOT a waste of money and you could bank the extra money you would had put towards mortgage repayments.

And again, no offence intended but you are on extemely low wages, even for Cheshire (i have just moved from Crewe) and think you would struggle to find anywhere half decent for the mortgage you will be allowed to borrow.

You can RENT a far nicer place than you can afford to MORTGAGE at this present time.. I guarantee that as a fact.

Doozergirl

I bet you could rent a really lovely little place in a good part of Macclesfield for less than the equivalent mortgage on somewhere smaller/less desirable. Prices really haven't been doing all that much in most parts of the country for a couple of years now, most of your mortgage is interest (effectively rent) anyway. There's no hurry and I promise you will not miss any boat.

Take it easy. When your salaries grow, thing will seem much more comfortable affordability wise - and there's nothing wrong with renting a place together first anyway - mortgages are like marriage!

I buy and sell houses and even I rent my home because it exposes me to less debt and rent is cheaper than borrowing.

IHateDida

I personally wish that I had bought a house sooner - not to have benefited from the price increase, but to have been further down the line with a mortgage than I am at the minute - I'm now trying to overpay like mad as I don't want to be 60 and still with a mortgage around my neck (ok I'm 32 - I know its somewhat off - but I've just take out a new mortgage for 25 years!). I bought my first house at 28 and rented before this - but I now wish I had got my own property sooner.

But...having said that, you need to make sure you pick a fixed mortgage rate that you can afford from the start if you are on relatively low salaries - at least this way, any rises in interest rates won't affect you until the end of the fixed term, by which time you sound like you will be on higher salaries anyway.

The only problem you might have is IF there is a fall in property prices, you may be faced with negative equity IF you want to move. But if you pick somewhere you are happy to stay for a while, then you should be ok. Meanwhile you could always rent out a room to help pay the bills?

Nearly forgot to say....don't underestimate all of the extra costs in initially buying a home eg. solicitors, deposit, valuation fees, mortgage fees etc... these can run well into several thousand pounds without you having paid off any of your mortgage!

pamaris

You said you were both expecting pay increases within the year. Rent at the very least until then... you will have a better idea of both the market and your financial position at that time. It would be foolish to tie yourself down now to a less desireable home, if you find that in 12 to 18 months less money will get you more house (definitely a possibility!). As suggested before, renting will get you much more house at the moment.

stuart30

pinkshoes wrote: »

Realistically, you shouldn't borrow more than 3.5x your joint salary, so (£13k + £12k)*3.5 = £87.5k!!

Borrowing more than this is irresponsible, and could leave you in difficulties if interest rates rise, or one of you looses their job, or if you have a child...

A good rule of thumb is that you should be able to afford your mortgage payments even if interest rates rise to 12%

So, if you borrowed £87.5k over 25 years, you should make sure you can pay at the rate of £930/month incase interest rates rise.

There's nothing irresponsible about wanting to put your money into your own house and stop filling a landlords pockets.

My wife and i were in a similar boat where we had to go down the 100% mortgage and that was made up part mortgage part loan.....the wife then fell pregnant with twins so had too stop working so only my income to support the four of us plus pay the mortgage.

We manage just fine....the mortgage is more than the rent we would have been paying admitedly,however we would still of had to find the rent so why not simply sink the ""rent"" money into a mortgage instead.;)

pinkshoes

Melissa177 wrote: »

Pinkshoes - I think your rule of thumb about the 12% interest rates is rubbish! I bet very few people at the moment could cope with that sort of raise, and I think that may have held true many years ago, but I'll bet you my flat that interest rates don't go anywhere near that for the next ten years.

Rubbish?! I think it's very sensible! I also bet that there are many people that couldn't cope with that sort of interest rate, but that's their problem. You can bet whatever you like that they won't go near that sort of rate in the next 10 years, and I hope they don't, but as a sensible rule of thumb, you should make sure that you CAN afford payments at that rate. It's called planning for all eventualities!

To the OP - it really depends what you're buying for. If you're looking at a long term place to live and a home that you can call your own, then buying is a good idea, but if you're just buying for the sake of investment and plan on selling in a few years time, then maybe you should rent for a bit.

Melissa177

I just think it's unrealistic - if every FTB forecasted for 12%, you would have a 90% drop in the number of FTBs.

Plus, most FTBs fix for 3-5 years, so the STV isn't that relevant to many who then shop around for the next deal or would sell up if IRs were that high when the deal came to an end.

Bazlovejoy

I have started a new thread regarding Renting, if anybody is interested

http://forums.moneysavingexpert.com/showthread.html?p=6015871#post6015871

Thanks