When to buy

snubnubs

My partner and I are currently saving towards a deposit so that we can get on the ladder and by my estimates we should be close to having a 10% deposit together by the end of September.

We are planning on getting a DIP and beginning to search for a house in a more serious way from the beginning of September, with a view to putting Stamp Duty and other fees on a credit card, if we can, if what we end up liking is towards the top end of any budget.

However, I am conflicted as to whether this is definitely the best thing to do, for the following reasons:

• Every additional month we wait puts us in a better position financially (either by having a bigger deposit, or being able to not credit card some of the expenses)
• The Govt HTB mortgage scheme is scheduled to end in December - will this mean our end of the market will be really busy as people try to take out 5% mortgages whilst they still can?
• If we wait too long will interest rates rise towards the end of the year?
• If the govt don't introduce something else could that effect house prices/demand?

I'm probably just over thinking it, but it would be interesting to hear the opinions of others.

:beer:

nubbins

If you are having to put stamp duty and fees on a credit card I would say you are not ready to buy, according to HMRC cc is not a method for payment anyway.

In terms of the longer you leave it the better financial position is not necessarily true because that 100,200, 300k property could be 3,5 or even 10% higher in a year depending on where you live. Of course it can go the other way but either way I would make sure you have all your fees,stamp duty and deposit in place before you visit lenders.

dc197

nubbins wrote: »

If you are having to put stamp duty and fees on a credit card I would say you are not ready to buy

This +1

.

snubnubs

Thanks, point taken. Although, it looks like it might be possible to pay stamp duty with credit card but it comes at a 1.5% fee (I tried to post a link from the gov.uk site with the info, but as a new user I can't post it). Eesh.

Pixie5740

Cash buyers are able to pay SDLT themselves using a credit or debit card. You however will require a mortgage and your mortgage lender's solicitor will want all cleared funds including the SDLT to be lodged with the solicitor prior to completion and releasing any mortgage funds.

Tygermoth

We are in the same boat, we keep saving each month but house prices are going up faster than the savings.


So by the time we found something in our price range and made an offer the deposit ate up all our savings (which was supposed to cover fees too)


We explained our conundrum to our sols and they agreed to bill us for stamp duty on completion and we could pay it by credit card for a fee (as the CC fee would eat into the amount due - so it just made the transaction the full amount)


luckily we have several months between exchange and completion so we are looking to have saved the difference but its nice to have a fall-back.

AndyBSG

snubnubs wrote: »

Every additional month we wait puts us in a better position financially

That's only true if you're able to save at a quicker rate than house prices are going up.

Last year I think the ONS reported house prices rose by an average of 6.7% and the average price paid by a first time buyer was £177,261.

So, in a years time that 177K property will be selling for roughly 189K meaning that you've got to be saving over 1K a month for your deposit to be increasing faster than house prices are.

In all honesty, if you're having to put any of the associated fees on a CC then you're making a risky start to owning a home.

Mortgage fees, solicitor fees, stamp duty, service charges/ground rent, building and contents insurance, removal fees, survey fees, local search fees, CHAPS fee, etc all add and most of those incur 20% VAT as well.

Also, depending on if your mortgage provider is a bank or a building society then you may have to pay your first months mortgage payment as soon as you move in and the first one can be up to 50% more than a usual mortgage payment depending on which day of the month you move in.

When I bought my first place this time last year I had a 'war chest' of 4K set aside to pay for all of that(excluding stamp duty which was paid for separately) and it was soon swallowed up.