FTB, Buying outright or Mortgage

Pixie5740

Ah, you're in Scotland (as am I) then yes if you buy a flat you actually buy it rather than just buying a lease like in England. Personally I've always gone for 2 bedroom flats over 1 bedroom. Unless it's a large 1 bedroom flat you're looking at buying.

Trigs

So, just to clarify on one main point.

This is ignoring all the other options available, which may be better/offer more safety.
Im just trying to get some more thoughts/opinions on whether this is truly a financial Apocalypse im being told it would be.

Would purchasing a house at £85000 + fees,when you only have £91000 be considered financial suicide, acceptable or risky but doable?

I dont ask this because my mind is made up, just that im getting told it is an absolute no no by parents and pretty much noone would consider it, as it leaves with little to no savings.

I think from a few posts on here and other places, that im not alone in thinking this is a reasonable option, but i have no experience.
Im in the Risky by Doable camp myself. I feel that id be able to get by for the first while on my wages alone untill i can build my savings up again. Although risky due to unexpected payments popping up. (Which then the other options come into play, 0% cards etc)


I realise this is probably a hard question to answer, as its pretty subjective to just how much you have left in savings after buying, whether you do get unexpected bills, your utility bills etc,furnishings required/whitegoods etc.
But hopefully you get the idea. :rotfl:

NicNicP

First of all well done on saving enough to be in the position you're in! if I were you I'd purchase a 2/3 bedroom property, using your savings as a deposit and the rest on a mortgage. Seems a long way off but selling and buying involves costs and in the long term you'd be saving yourself money. Keep enough in savings to tide you over if the worst happened!

getmore4less

I suspect many purchasing never have a wedge of cash yo start with so move in with little or nothing in the bank.

I would probably invest in a mortgage it is cheap money if you can find an offset with low startup costs it will have zero running costs till you drawdown offset funds.

Much more flexible going forward and house ownership really needs backup funds just in case.

You seem to be the sort that can hold onto money.

Pixie5740

It's not financial suicide but you're not leaving yourself much wiggle room. You can kit a new home out relatively cheaply using charity shops (particularly British Heart Foundation as they also have white goods) and Gumtree. However, you might still find home ownership and living away from home more expensive than originally anticipated.

For example, I bought my current home in June last year. I knew the boiler was old but had hoped to make it to this summer to get it replaced. It gave up the ghost during winter but at least I had money in the bank to pay for a replacement. You will become responsible for not only fixing and maintaining everything in your home but also the communal parts of the building.

An offset mortgage seems like the best of both worlds because you can still access some of your savings but if you don't then your mortgage rate is effectively zero. That would be a safer bet (in my opinion) than hoping you can apply for a credit card with a high enough limit should you need access to money before you've built your savings back up.

AnotherJoe

Go for a two bed, minimum even though that will require a mortgage. 2 bed houses appreciate faster than one beds, and in the case of a house price fall, depreciate less.

I agree with a previous poster, an offset mortgage could potentially suit you very well.

zagubov

I'm on an offset mortgage after reading about them on here ages ago. It's fine and very flexible. Not sure who wouldn't suit them!
I think you're being given good advice here.
Get at least one more bedroom so you've the option of guests/a lodger. Also means you've less house moves in your future and frankly that's a big bonus. Moving house multiple times doesn't ever get to be fun.

Putting savings in the offset means you've either little or no interest to pay or you've got access to emergency funds if you need it. And somewhere to stash future savings too.