Buy now or wait?

Tiners

Can I put a slightly different slant on the O.P's question...

Would you buy now if you were -

1. a cash buyer
2. currently not ''wasting'' money renting?

Dave93

Pixie5740 wrote: »

Before getting too excited go and speak with an independent broker rather than the chancer you saw at the bank. That should give you a better indication of your budget.

Hi, funny you should say that. I spoke with one earlier today and they estimated based on my income etc and offered £15,000 more than the bank did and also said it shouldn't be a problem to put my OH on the mortgage as it is common for people to be "house wives/husbands" so they don't hold it against you - contrary to what the bank told me. Never got to the level of detail regarding rates etc because I was on my lunch and agreed to have a second discussion about this. Have another mortgage meeting with another broker tomorrow afternoon and will continue to shop around. No firm mortgage application yet though.

Tiners wrote: »

Can I put a slightly different slant on the O.P's question...

Would you buy now if you were -

1. a cash buyer
2. currently not ''wasting'' money renting?

Interesting question, would be curious to see the responses to this. I wish I was in a position to be a cash buyer :rotfl:

tom9980

Tiners wrote: »

Can I put a slightly different slant on the O.P's question...

Would you buy now if you were -

1. a cash buyer
2. currently not ''wasting'' money renting?

If this were the case you should always buy, even if that meant taking a small/modest mortgage and the property was the forever home given the ages of the OP and GF its a complete no brainer, the saving over their lifetime will be significant.

AnotherJoe

Dave93 wrote: »

Running away with ourselves is part of the reason I posted, given the people we are surrounded by reaping their rewards for working i.e. via buying homes are living with parents spending all of their income we are feeling like the scrimp and save approach for a few more years is a tough pill to swallow.

I think you are well aware they are the ones that will be in trouble in a few years time.

Dave93 wrote: »

I guess one worry we have is if we buy now, and then sell and buy in say 3-5 years time if house prices drop we wont have much money paid into the mortgage so will end up taking a hit by selling the house.

In that case, move later once prices recover. I bought in 2007 at peak for £200k. Prices dropped to 150k by about 2010. I sold in 2014 for £250k and they are now £310k+

But if house prices have risen you'll at least have mostly been insulated against that rise. Otherwise you could find yourself priced out and never able to buy.

Pupnik

I was in a very similar position a few years ago – we were renting and had saved a deposit but I had been self-employed for a year. We weren’t sure whether to wait until I could be included on the mortgage so we could borrow more. Although my boyfriend by himself could borrow a lot more than us as a couple (I counted as a dependant) I did not like the idea of it – there were too many risks with regards to inheritance, splitting up etc, and as I was paying the larger chunk of the deposit I didn’t think that was fair.
Our broker told us it would be hard to find a lender that would lend to us both but in the end we did find a couple, although we had to be on a 35 year term as they didn’t trust us to pay back very much each month.

We bought a flat that wasn’t our ideal location – we would have preferred a house, like most people, but went with what we could afford. It was in a roughish neighbourhood and needed a new kitchen, new bathroom and all the woodchip removed. There were a lot of times that I found myself thinking ‘I wish we had waited a little longer and just got a house instead…’ I also worried how the property market would change and whether we would get the money we spent doing it up back again. All the usual worries, really.

That was 4 years ago and our flat cost us £90k. I worked out that if we had been renting during that period we would have paid £20k in rent with no return. We’re now looking to move so recently had our flat valued and it has now increased in value to £145k in just 4 years, so the £55k increase plus £20k in saved rent sees us £75k better off than we would have been if we had delayed our purchase until we could afford a house, and that extra money allows us to now look in an area I never really thought we would be able to afford (sea views!!!)

The other benefit of the mortgage lender lending to both of us was that our payments were very small (far smaller than our rent had been) After 2 years we remortgaged and as I was employed by then we could reduce the term to just 10 years, but it was still very affordable as the flat had been cheap to begin with so we were also able to overpay, plus have carried on saving for our next house.

I’m really glad we took the plunge when we did – we were very lucky in that the ‘rough’ area we bought in has had major investment over the last 2 years and is now becoming very popular, but even if it hadn’t been that much of a price increase the fact that the £20k we would have paid in rent was paying off a mortgage that can now be used as a deposit on the next property is great. There is always a risk that prices will drop, however even if they did would they drop so fast that they lose more in value a month than you are currently paying in rent?

If I were in your position I would see what you could borrow together and what you could afford with both your names on the mortgage – it was doable for us so it may be for you. If it turns out you really can’t afford anything in your area doing that then consider taking a short fixed term mortgage, eg 2 years, and reapplying as a couple in 2 years time (assuming this is possible) but I would discuss with a solicitor the inheritance side of things should anything happen to you.

Crashy_Time

AnotherJoe wrote: »

I think you are well aware they are the ones that will be in trouble in a few years time.



In that case, move later once prices recover. I bought in 2007 at peak for £200k. Prices dropped to 150k by about 2010. I sold in 2014 for £250k and they are now £310k+

But if house prices have risen you'll at least have mostly been insulated against that rise. Otherwise you could find yourself priced out and never able to buy.

And do you think the PTB can repeat that trick with the US gagging to raise interest rates?