To Buy or not to Buy

Legacy_user

When I am finally free of the millstone around my neck (debt) and as I do not currently own a home my next major financial decision is buying a house. Now I will be debt free in about 3 years, maybe less and my quandry is should I wait a couple of years after my debt free date, save save save, allow my credit score to get healthy again, then apply for a mortgage or do it once I am debt free. WHat does everybody think?? Len

Sea78

Hey Lenny - this DFD has come much nearer now, hasn't it?! Fab.

I think it's all down to you and what you want to do - we were able to get a good mortgage rate because of a sizable deposit despite OH's CCJs so might be worth considering, however, London and county told us they were in the process of getting mortgages for those with IVAs, debt problems etc.

So not much help I'm afraid!

daphne_descends

Hi Lenny, I think it would have to depend on the state of the market in three years time - interest rates and the level of lending (many people are having 'in principle' mortgage offers refused in this 'credit crunch') - but if the prices are right then the amount you would want to borrow might be more in your favour in three years, than in five.

If that makes sense - it did in my head

System

Thanks Sea that's encouraging to know. I wonder what the market will do in the next 3-4 years?? I am really hoping that it will come back to me as it has certainly conspired against me over the last few years.

System

fac73 wrote: »

Hi Lenny, I think it would have to depend on the state of the market in three years time - interest rates and the level of lending (many people are having 'in principle' mortgage offers refused in this 'credit crunch') - but if the prices are right then the amount you would want to borrow might be more in your favour in three years, than in five.

If that makes sense - it did in my head

Thanks Fac. I wonder what the deeper reaching ramifications of this credit crunch will be. Could it cause widespread panic and affect the housing market?? I for one hope so; of course not wishing to offend any homeowners out there!

Sea78

HI

Linked to this - I just saw the oneaccount thingy on tv and so looked up the details and nearly passed out! Once we've cleared the debt, I'll really have to look at putting loads in the mortgage instead as according to that, and overpayments, we could be clear in about 8 years!!!!!!!! WOW!

So what i mean is - there will be something you can do, especially seeing as those the debt repayments to Payplan are quite high, you will either be able to save for a mortgage deposit reasonably quickly, or afford a mortgage and posssibly overpay etc.

livinginhope

Morning lenny :hello: long time no see

When do you leave the Navy? I ask because buying a house while in the mob isn't really a good idea,if you have to move on,it's not just a case of packing and going,you then have the added worry of selling or renting your house out,as you know we moved around a lot as kids,my parents did buy 2 houses and dad got posted to Scotland while we were in Gosport,mum couldn't just pack us up and go too,dad had to keep travelling back to see us all,in the end the house was repossesed due to debt,probably because of the added travel expense (on top of his gambling :rolleyes: )
If you are sure you will be staying put for a while,then ok
The other thing with saving for the deposit is,while you are saving,house prices keep going up,so you need a bigger deposit,so you save more etc,if you have a reasonable deposit,say 5% then I'd say go for it.
Good luck hun,I thought you had a longer time than 3 years until you're debt free????
LIH

GreyPilgrim

Hi Lenny. One of my 'goals' for getting debt free was to look at buying a house but now that I'm there and looking at the market, getting on the property ladder seems ten times more of a challenge than actually getting rid of my debts was.

I'm lucky enough to live in a housing association property so the rent is relatively cheap. It means that the money we used to throw at the debts is now being tucked away in ISA's and savings.

The problem is, we really scrimped and did without to get debt free. Now that we're there the moneysaving ways are still with me, but we do allow ourselves a few treats now and again. However, if we were to buy a place now, the mortgage payments would be a hell of a lot more than the rent we pay. We would literally have to throw all spare cash at the mortgage, and not be able to save anything (and I personally found it extremely stressful not to have savings to fall back on if anything went majorly wrong).

We're both in out mid thirties. those mortgage payments are going to be with for a good long time yet.

The more I think about it, the more I don't actually want to buy a place. I know all the arguments for it. I know many consider rent to be 'dead' money. What I don't want to do is have to live hand to mouth until I'm seventy, finally pay off a mortgage and think 'yippee, I can NOW start enjoying life!!' and then get shunted out of my home by my kids and into Shady Pines Retirement Home'

I'd much rather keep saving, keep the cheap rent and then when my daughter is up and settled pack up and buy a mobile home or something and live out my later years on the road.(*)

Anyhoo, thats just my feelings. I hope it doesn't come across as raining on your parade, it's just my own personal two cents worth on home ownership. (but I also realise I'm lucky enough to have cheap rent, and that for some people a mortgage might not actually be that much more expensive)



(* - yeah, I know it's a pipe dream. Whats wrong with that?;) )

GreyPilgrim

Dear god. My post sounds so negative and depressing doesn't it. Try reading it in the voice of Marvin the Paranoid Android. You'll be crying by the end of it.

System

Sea78 wrote: »

HI

Linked to this - I just saw the oneaccount thingy on tv and so looked up the details and nearly passed out! Once we've cleared the debt, I'll really have to look at putting loads in the mortgage instead as according to that, and overpayments, we could be clear in about 8 years!!!!!!!! WOW!

So what i mean is - there will be something you can do, especially seeing as those the debt repayments to Payplan are quite high, you will either be able to save for a mortgage deposit reasonably quickly, or afford a mortgage and posssibly overpay etc.

Thanks Sea. That oneaccount thingy sounds quite appealing. Do you mean open one once the debt is repaid and save for a while???

immoral_angeluk

Sounds like a plan fella! We plan on doing the same