Money Moral Dilemma: My parents want us to buy, my partner's say we should rent, what should we do?

fudgecat

"My parents want us to buy" - could that actually read "my parents have offered to help financially if we want to buy"?  I can`t think of any parents of my acquaintance demanding that their offspring take large amounts of their money to buy!

Sparky6_9

A mortgage is a big commitment but it is a long term investment. You don't say why your parents are saying rent. Are they thinking that house prices will drop once we know the details of the Brexit deal?? Negative equity is a nightmare, so if that is what they are thinking then I can understand that otherwise I would say buy. Its ok saying rent and save a deposit but by the time you paid rent will you have anything left over to save? Mortgage rates are very good at the moment and renting is generally very high, though it depends where you are. Best thing to do is compare similar properties (same size, age and area) to rent or mortgage. Of course you will need to find out how much the banks will lend you but we all got to start somewhere. Just get a long term fixed deal then you know exactly how much the roof over your head is costing for the duration of the fixed term. Go for a minimum 5 year fixed deal, it works out cheaper in the long run because of other fees (arrangement fee) you will have to pay when you go for your next fixed term deal.  Always bear that in mind. Go for a repayment mortgage because you are paying off the loan. Also if you do decide to rent you are at the mercy of the landlords who can be unscrupulous. Initially you will only have a 6 month contract and you will have to pay several months up front as well as a damages deposit. After the six months are up they can increase the rent plus they can chuck you out at any time (not quite true) but they can give you notice to vacate without reason. Some landlords will keep the damages deposit claiming you broke this or that and then you will have a fight to get it back. At least when you buy it, it is yours and hopefully the value will increase and at some point you will be able to take the next step up the property ladder. Good luck.

Alice_Holt

arrtu said:

Renting is Dead money you will never see it again 😉

The flaw in this comparison is that your mortgage payment is not solely "an investment".

Remember that a mortgage payment is two payments combined:

• One is the repayment of the amount you borrowed: this is an investment.

• The other is a payment of interest to the lender: this is not an investment.

If paying rent to your landlord is a dead money, then so is paying interest to the lender. 

In the early years of a mortgage, the monthly payments are primarily these interest costs, rather than repayments of the mortgage loan. 

Sladevalley

MSE_Kelvin said:

This week's MoneySaver who wants advice asks...

Me and my partner are living with her parents but want to move out. My parents want us to buy, and have said they'll contribute, but hers say we should rent - possibly so we'll move out sooner. Whatever we do we'll upset one set of parents, so whose advice should we follow?

Unfortunately the MSE team can't always answer money moral dilemma questions as contributions are often emailed in or suggested in person. They are intended to be enjoyed as a point of debate and discussed at face value.

😲 If you haven’t already, join the forum to reply.

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We spent most of our lives self employed and bought a second house as a pension investment. Only wish we had bought another instead of taking out a private pension which now we are in our 70's involves paying tax on it in order to cash it out, a big no no in my estimation

bellaboo86

I would never buy a house with someone I hadn’t lived with first. Living with parents isn’t a true example of living together IMO. 

grumiofoundation

Sladevalley said:

MSE_Kelvin said:

This week's MoneySaver who wants advice asks...

Me and my partner are living with her parents but want to move out. My parents want us to buy, and have said they'll contribute, but hers say we should rent - possibly so we'll move out sooner. Whatever we do we'll upset one set of parents, so whose advice should we follow?

Unfortunately the MSE team can't always answer money moral dilemma questions as contributions are often emailed in or suggested in person. They are intended to be enjoyed as a point of debate and discussed at face value.

😲 If you haven’t already, join the forum to reply.

🙄 Got a Money Moral Dilemma of your own? Suggest an MMD.

We spent most of our lives self employed and bought a second house as a pension investment. Only wish we had bought another instead of taking out a private pension which now we are in our 70's involves paying tax on it in order to cash it out, a big no no in my estimation

Thanks for letting everyone know. 

Now the question was whether a young couple should buy a house or rent a place together. 

gloriouslyhappy

crmism said: "Buying is the preferred choice, but beware leaseholds and go for freehold instead." Absolutely! A relative of mine is suffering with unexpected and very high costs on a leasehold flat over and above the already high service charge. The landlord seems to have a licence to print money, one window cracked during storm Dennis, now he wants to replace all the windows at a cost per flat in the thousands. And he wants them to agree and pay up without even a chance to look at the three quotes he allegedly got! Of course, he can't actually do that without their agreement, he has to show them the quotes and written reasons why replacement is necessary, but he can still ultimately force them into these very expensive and unnecessary 'improvements'. 

So beware leasehold and only buy freehold if you do decide to buy rather than rent.