Buying a home VS renting? Help!

twotonealex

Cakeguts wrote: »

So apart from the rent you are paying for all the electricity, days out, and all other household expenses so that means that the whole of your partners income could be going into savings? Or do you really mean that your council tax is £160 per month? Are you saying that the council tax is really £1600 a year?

I have halved the utilities in the above list, except for TV & Broadband

Our electricity is £79PM, we have electric heaters which we rarely use. We have been through the energy club to reduce to this point, we turn everything off at the plugs.

Council Tax is £168PM total.
My partner pays for all of the car expenses, including fuel for a 2 hour per day commute, insurance, bridge toll (over £100 per month) plus other costs associated.

twotonealex

babyblade41 wrote: »

I really don't know much about what you are asking but I do know about living expenses and some are so ridiculously low

80.00 groceries per month... ??

No water rates ??


Presents, birthday, xmas ??

No Clothing ??

No parking or public transport costs... how do you get to the train station ?
Now it was a long time ago when I had to do a budget calculator and what you have stated wouldn't be viable.

We all need clothes, we all need to go out at some point and either use public transport or parking

Your debt seems a little high with so little for manoeuvrability and looking at that calculator that is barely existing let alone living

The exuberance of buying your own home can then turn into a prison sentence if you have not a penny to either go out for the odd treat or a new pair of jeans/dress/handbag / pint and many years ago when I applied for a mortgage all the above had to be factored in

You can't calculate what you might get in future you can only deal with here and now .

As I've just posted in reply to another comment, most of the utilities are halved between myself and my partner.

Water is included in the ground rent (paid by our family member who owns the flat).

We are very thrifty when it comes to making presents, using our little disposable carefully, so we manage when it comes to birthdays and Xmas.

My monthly season ticket costing £69 gets me to work and back. We live an 8 minute walk from the train station.

Our flat includes an allocated parking space, so no parking costs here or at my partners work (at a school).

My debt is minimal compared to when I started making payments and consolidated it, we have lived on the bare minimum so we can save up to buy, and to clear the debt I have. We have been lucky to have very low rent and have reduced all costs (or are reducing soon) we can so I can pay off my debt and we can buy a property.

The debt has been on a 0% interest deal, and I've cleared £15K in the last 12 months from regular payments and the odd extra payment.

I appreciate what you're saying, but we put a little aside each month for emergencies and for a rainy day!

We are pushing ourselves to the limits for a short period of time, but unless we want to live outside of Bristol/another location or not buy for several years then it's worth it once we're on the ladder.

We have a very supportive family, so we aren't concerned about living the next 12 months in squalor!

AdrianC

twotonealex wrote: »

My partner pays for all of the car expenses, including ... bridge toll (over £100 per month)

Woo! Another hundred quid a month into the savings!

twotonealex

AdrianC wrote: »

Woo! Another hundred quid a month into the savings!

:rotfl::rotfl:

This has already been taken into account with saving a £30K deposit by next December.

babyblade41

my apologies but it is difficult when both incomes and expenses aren't explained

For me if it was financially within my remit I'd get on the property ladder but only you know if that is the right thing to do for you

steampowered

We will be paying around £1075 per month on a mortgage ...
Mortgage payments increase capital and reduce loan. (2 years or mortgage payments will have reduced loan from £266K to £249K (£17K increase in capital).

I think the £17k figure is an overestimate. I guess you have calculated this by dividing your £266k mortgage by a 30 year mortgage term?

Remember that with mortgages you pay less capital in the earlier years. As time goes by and your overall debt gets smaller, the amount you owe in interest reduces, so more of your monthly payment goes towards paying off the money you borrowed.

We continue to pay £500 'dead money' until we buy somewhere

Don't feel that you have to buy "now now now". The housing market isn't going to suddenly lock you out after 3 years.

You describe rent as 'dead money'. But stamp duty, mortgage interest, mortgage set-up fees, conveyancing fees, moving fees and flat service charges are also dead money !!! Over a 3 year period, in terms of dead money, I doubt there is much difference between your cheap rent and buying.

If I was in your position, and I was happy living where I am, I would stay put. The extra £600 or so a month which you can save towards a deposit by staying where you are will put you in a better position in 3 years time.

That said, it think it would be reasonable to move to the 2-bed flat though if you wanted to move for personal reasons, e.g. you wanted to live in a different part of the city.

zagubov

twotonealex wrote: »

We are pushing ourselves to the limits for a short period of time, but unless we want to live outside of Bristol/another location or not buy for several years then it's worth it once we're on the ladder.

Is it out of the question to buy and live north of the estuary and then relocate later?

Cakeguts

You cannot afford a mortgage of over £1000 per month because with owning a house there are extra expenses like paying for maintenance and in your case water as well as buildings insurance. What you think will be a spare £500 per month will be eaten up by the extra expenses of owning a property meaning that you will not have anything spare to save which is exactly the position you are in now.


You and your partner have based your lives on only paying £500 pcm rent. That is why your partner could take a trainee job 2 hours commute away instead of closer to where you live. She doesn't earn enough to pay for the fuel the car insurance and the next car when it wears out from all the commuting.

twotonealex

steampowered wrote: »

I think the £17k figure is an overestimate. I guess you have calculated this by dividing your £266k mortgage by a 30 year mortgage term?

Remember that with mortgages you pay less capital in the earlier years. As time goes by and your overall debt gets smaller, the amount you owe in interest reduces, so more of your monthly payment goes towards paying off the money you borrowed.

I used the MSE Mortgage calculator which shows how the total owed reduces, this was in line with a 2% interest rate that I have seen on various mortgage broker/banking pages that we have got a lending quotation from.

zagubov wrote: »

Is it out of the question to buy and live north of the estuary and then relocate later?

Yes, we are both from that direction and aren't interested in returning back to that side of the river :beer:

We want to live in Bristol, and as it stands is perfectly viable but appreciate the option to consider.

Thanks!

Cakeguts wrote: »

You cannot afford a mortgage of over £1000 per month because with owning a house there are extra expenses like paying for maintenance and in your case water as well as buildings insurance. What you think will be a spare £500 per month will be eaten up by the extra expenses of owning a property meaning that you will not have anything spare to save which is exactly the position you are in now.


You and your partner have based your lives on only paying £500 pcm rent. That is why your partner could take a trainee job 2 hours commute away instead of closer to where you live. She doesn't earn enough to pay for the fuel the car insurance and the next car when it wears out from all the commuting.

I don't understand why you'd think that way? We are diverting huge amounts into debt/savings and once channelled towards a mortgage could still keep saving. Even taking into account management costs/ground rent.

I appreciate what you're saying but I don't agree.

Once again - I appreciate people trying to offer financial input, however my question related to whether it worked out better in the long run to go for option 1 or option 2.

Thanks!