Using all of savings for house deposit

keyring1

Hey folks,

Nice to finally make a post on here, I'll get an introduction post up shortly

My post is looking for other people's opinions/advice regarding buying my first house

I'm 23, and have found what I think is the perfect house for me(ideally wanted one that is never have to move from if I so decided that)
I've viewed a couple of houses so far, and I'm going to view this one once I'm back from work

my question is, I want to put a minimum of a 10% deposit down, and once all fees are paid and costs associated with buying a house, that will be all my savings gone, with estimated mortgage costs and bills etc, I'll be able to continue to save money each month(not as much as I currently am just now living with parents)

However, is it wise to spend all the savings and then have to save back up for a rainy day fund? Or should I let the house pass by, and continue to save as hard as I am, so what when I do buy a property, I still have a good amount left in the bank account for a rainy day


To me it makes sense to have money sitting for any unexpected events that can pop up, but people I work with have suggested just going for it and start saving again if I got the house

As much as the house looks perfect in photos and I hope it is when I view, if people think it's more sensible to let it pass by and wait till I have more saved, it would certainly help me decide what to do as much as I really want the house

I should also say my parents are in no rush to get rid of me and are happy enough for me to continue living with them


Sorry for the long post

Cheers

Ciaran

Thrugelmir

Far easier to build savings/deposit whilst living at home. Hopefully you are using a HTB ISA or LISA to maximise your money. Owning a house doesn't come free. Like a car. There'll be maintence and repair jobs to be paid for.

G_M

Buying a property nearly always throws up unexpected expenses for which you need a contingency fund.

And setting up home cost money too, though you CAN get by getting stuff off Freecycle/ebay, and doing lots of DIY (which is always needed).

moneyistooshorttomention

I think that is a question the answer to which depends on the house and personal circumstances.

Normally - I'd say "Try and leave yourself a bit in reserve - just in case". It's thoroughly depressing just how many things the vendor didnt let on about and the surveyor apparently missed (ahem...like the need to give the house a full rewire - says she feelingly:mad:). There's always summat....

But, in your circumstances, I'd tend to take a very different view. You are only 23 - and therefore have the vast majority of your life ahead of you to get some more money together for those darn "unexpected expenses" there is quite a possibility of.

The main thing though is that, if this house is really a forever house and you can manage to get it then :beer::j:beer::j - and, at your age, I'd put every last penny into a chance like that. Lots of people get to a rather older age before they get a "forever house". Then again - lots of us (yep - hands up) look like we'll never get a house we love/don't want to move from.

So - if it really really is a house you would honestly want for rest of your life - then kick up your heels and run and grab it and don't let go.

Bear in mind what I call the "swop-over costs" to sell one house/move from it/buy the next one and then start work on the house over again cost a lot. I spent around £9,000 on swop-over costs of moving from starter house I didnt love to current house I don't love either (but logic tells me it's the best I can do on the finances I have). That's money straight down the drain - so, if you can save it by never having to move again - then do so.

hammy1988

In my own personal opinion, are you in such a rush to move out? I don't want to sound old fashioned (but I will anyway...) but would you rather purchase a property with a partner later in life? You could save lots till then, and in an ideal situation, together with a partners income, you could both buy the house of your dreams?

It's a very old fashioned stereotypical life journey I've just represented, but hey ho, thought I'd put it out there LOL.

To add a sensible (?) point, although you can get some nice surprises when you move in (boiler not working etc) you can try your hardest to make sure the house purchase is habitable and able to live in until you can afford repairs. Me and my husband bought our first house but as a project, we didn't have pots of money put aside, we just saved and did bit by bit repair and decor wise. It was fine for us, we managed and five years later made a tidy profit. Do you have family and friends who are plumbers/electricians/builders? as this always helps keeps costs down.

There are policies you can take out such as boiler cover, we had one with British Gas that covered electronics, plumbing and boiler for a small payment each month. Something like that does help a little if anything major happens.

Just make sure you aim to check boiler life, make and service history before you decide to buy. Keep an eye out for plug sockets when looking around, do they look battered...? does the fuse box look old? was it rewired etc? It's these little things to look out for that'll give you a slight hint (only slight!) as to whether you might incur major repair works in the near future.

Personally, I'd go with my old fashioned view above and save save save.

JoJo1978

In the same way that if you run a car you are wise having access to funds in case it breaks down, same goes for a house. There's more that will need fixing on a house especially if you buy for the long haul. And you'd be wise to fix up as you go to help preserve the resale value.

I bought at 23 too, again somewhere that I would have been happy to stay. But my life now is unrecognisable from what it was then so I moved on (more than once now.) You can probably tell from my user name how old I'm approaching next year lol!

Don't do all of your choosing just from the photos. Go to every viewing with an open mind and challenge yourself to go out of your comfort zone in terms of type of house and area if you can. Only be really strict with yourself on budget.

The more places you look at the more that you'll form real opinions on what you're looking for. The house my DH and I are currently buying actually ticks very few of the criteria we'd drawn up on paper, but it suits us perfectly - we'd just never thought of it.

So think of it like a journey, don't rush and save in the meantime. Best not to get too emotionally attached to any one house either until you're a fair way into the process of buying it. Easier said than done I know!

moneyistooshorttomention

All well and good to work on the assumption a partner will turn up later - but suppose they don't - ever???

I always assumed I'd get married somewhere along the line. When I said to someone the other day "That was a perfectly reasonable/understandable assumption to make wasnt it? - as I was attractive/heterosexual/living and working in a city. So I wasnt being unreasonable to assume that was I?". She agreed that that was a very reasonable assumption to make in those circumstances. But if you're not lucky enough to meet Him - then you're not lucky enough to meet Him.

Fast forward and I've got to my 60s (and had my chances:)) - but none of them were Mr Right . So I never did get married and I've got a house worth less than £200k (and that I dont love). I was calculating out that, if I'd taken one of the marriage proposals I had for instance back when, that I would, quite possibly, be living in a £400,000 or so "house I love" back in my home city. But the mere thought of the price to pay for that - Mr Shallow/Selfish and not very bright to boot - would have been too high a price to pay for that.:rotfl:

So dont make the same mistake I did and assume you will get married - you may not (even if you've got the same circumstances as I had - ie you're attractive/meet lots of people/etc/etc).

Work on this yourself - and, if you meet Mr Right later = it's a bonus:). Do not be reliant on meeting him.

steampowered

If you have found the perfect property at a reasonable price and think you will be there a few years, I would go ahead and buy it.

Getting on the property ladder at 23 is a great thing to do so if you can afford it. You are much younger than the average first time buyer these days, but that's because people can't afford the deposit rather than because they don't want to buy.

There may be unexpected expenses. But if the worst comes to the worst you could always delay the expenditure or take on a personal loan.

moneyistooshorttomention

steampowered wrote: »

. But if the worst comes to the worst you could always delay the expenditure or take on a personal loan.

Yep....and yep....

Or get a part-time evening job.
Or take in a lodger.
Or your parents might well offer help.
etc etc.

A house in "dump" condition doesnt matter at your age if worst comes to worst - as long as its liveable in and capable of being renovated.

Some of us only care so much what our houses are like because we dont have that much of our lives left. But with your likely 60 odd years or so to go - you've got plenty of time to get it sorted (and probably DIY help from a few boyfriends and/or mates along the line).

hammy1988

We bought our first house in 2012, I was 21 and my partner...now husband... 26, we've found remortgaging was easier as we had so many years of work (yuck!) ahead of us... well according to our mortgage adviser anyway lol. There are some good financial positives to buying early if you can afford it.

grant89uk

If you can afford the deposit and comfortably afford the costs of living on your own going forward, then I would definitely say go for it.

I know personally no matter how great a relationship I have with my parents I just wouldn't want to keep living at home if I didn't need to.

There comes a time when you have to start being a bit more independent and grow up.

The way things are going people are going to be living with their parents until they die so they can then take over the house.

A lot of people also fall into this trap of "i need to keep saving", to the point where they deny themselves things forever.