Brexit - pulling out of purchase

BallboBiggins

Devastated by the news yesterday about Brexit. We were due to exchange on our first house early next month - what should we do? Prices have already dropped since we offered in early May and there is a real danger we could lose our jobs as a result of this. We certainly can't afford a significant rate rise. Is it still worth the gamble - is owning your own house really all it's cracked up to be? We're holding off paying the surveyor now because of this - terrified by the future, any advice?

mrginge

BallboBiggins wrote: »

...terrified by the future, any advice?

http://www.atomica.co.uk/main.htm

BallboBiggins

And my other concern is what happens at the end of 5yr fixed term. If prices drop, say 25%, how will that impact on us when we look for a new mortgage. Will the change in LTV mean we can't get a mortgage and that we'll lose the house?

deaglecat

OP... I think you already know your answer.

All you are really doing is coming to terms with it.

[Deleted User]

If there is a chance of you losing your job because of Brexit then I'd also wonder about buying a house.

But I personally think the forecasts are fed off the 'throw all your toys out the pram' attitude of REMAIN. There will be some job losses, if you work in certain industries but not nearly as much as imagined. Any sensible company will have made plans that include 'getting through BREXIT' lol. Even moving a company's headquarters to another country costs an absolute fortune for example.

Obviously if your company depends on funding from the EU then yes, there will be problems. Then you need to look at how easily you can find another job.

Notice that the pound etc have already balanced out as sense prevails.

My 20 year old was convinced the world was coming to an end yesterday. But he woke up as per normal this morning. Those of us that have been through a few 'iffy' times don't tend to panic quite as much or believe a particular party's 'doom and gloom if you don't vote my way' predictions quite as much. Its called spin. You do realise that, don't you? Its why Remain lost.

If you have good skills, I am sure you will be able to find another job, and whether you will lose your job is a big if unless its directly dependent on EU funding. If your company can't manage to find another way to keep going, it probably would have folded anyway I'm afraid.

stator

BallboBiggins wrote: »

And my other concern is what happens at the end of 5yr fixed term. If prices drop, say 25%, how will that impact on us when we look for a new mortgage. Will the change in LTV mean we can't get a mortgage and that we'll lose the house?

Depends how much of your mortgage you've paid back. On a 30yr mortgage after 5 years you'll have gone from 95% down to 90%, so yes if house prices 25% you wouldn't be able to remortgage.
You wouldn't lose the house, you'd just have to pay the current mortgage until you get down to 90% (or lower depending on the market) or stay on it forever. After 30 years you own the house no matter what the house prices are.
No-one knows what will happen to mortgage rates in the future but they never have.

I would buy your house and stop worrying.
If you can get a 10 year fix, would that put your mind at ease more?

jimbog

BallboBiggins wrote: »

Devastated by the news yesterday about Brexit. We were due to exchange on our first house early next month - what should we do? Prices have already dropped since we offered in early May and there is a real danger we could lose our jobs as a result of this. We certainly can't afford a significant rate rise. Is it still worth the gamble - is owning your own house really all it's cracked up to be? We're holding off paying the surveyor now because of this - terrified by the future, any advice?

Are you renting at the moment?

kinger101

The fact that you were planning on a 5 yr fixed term already suggests you are in a position where you should be buying.

Not sure of your rate but on a 25 yr @ 3%, you've have paid off 15% of the debt at the end of five years. Do you own calc here;

http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#results

MerrilyA

I think you should carefully look at your circumstance and look at all your options and the possible outcomes. Consider what the best and worse case scenarios are for each option go with what you'd be willing to accept.

Money_saving_maniac

How does the mortgage compare to your rent, could you see yourselves staying there for anything up to 10 years, and can you get mortgage insurance?

smile88egc

Sounds like this purchase is going to be risky in the post brexit UK. I'd seriously think about reducing your offer by 5-7% or pulling out of your purchase and seeing where the dust settles regards mortgage lending.