my bank account will be empty after I paid my 10% deposit

Darkslider

John_ said:

kuratowski said:

Agreed with the above, what happens when as soon as you move in, you find the oven doesn't work, boiler breaks down and the kitchen sink is leaking?  You'll need to pay for it all somehow.

Camping stove, pullover, and a tube of sealant.

I’d not want to cut it that close either, but it’s not totally crazy to end up close to zero for a couple of weeks while you wait for your next pay to arrive.

We bought the current house before selling the place we were in, which was not what we’d planned. This meant borrowing a lot of extra money, finding a large extra deposit, and timing completion for just after pay day. It took me down to pretty much zero, which I wasn’t ecstatic about, but it let us get into the house that we wanted, and if disaster had struck I could have sold one of our cars to cover the immediate issue.

This is my attitude also, I grew up in a leaky, draughty farmhouse in rural Wales with frequent power cuts, no central heating and a sporadic water supply from a spring. All I need is four walls, a roof and the log burner, and I'd  be quite capable of surviving until payday should anything befall the heating or water system. It helps being fairly proficient at DIY so I can tackle most issues in a cheap and timely fashion!

If however you can't function without creature comforts and you have no knowledge about how to maintain or repair the systems that keep you in those comforts, then I'd agree you probably need a healthy reserve of funds should it all go pear shaped. I wouldn't say it dictates your appetite for risk however, just different people have different skills, abilities and thresholds of what they deem an acceptable standard of living!

kuratowski

I absolutely accept that for many (most?) FTBs, retaining savings of £10k is absurd (e.g. relative to the size of their deposit) and everyone's view on what is their "safe" level of savings will be different.  I'm sure £1k is a perfectly respectable emergency fund, for sure it's a lot better than £0k.

On the other hand, I don't agree with those who appear to say "my emergency fund is my credit card".  To me this is far, far beyond my risk appetite and I simply could not sleep at night in those circumstances, knowing that I was one bit of bad luck away from being in debt.

NewShadow

Darkslider said:

If however you can't function without creature comforts and you have no knowledge about how to maintain or repair the systems that keep you in those comforts, then I'd agree you probably need a healthy reserve of funds should it all go pear shaped. 

I'm not sure that's entirely fair...  

And, being completely honest... If I was looking to complete in October/November - rather than March/April - and had a long, possibly cold and wet, winter as my first few months in the house... I'd probably want some financial buffer against the pipes bursting/boiler packing in. I know enough to turn off the water - but I'm not gas safe and know how expensive boiler problems can be to fix... and I don't think it's creature comforts to want working heating over winter! 

For this house - at this time - £10k slush fund is silly. But if it were a much older house and I had concerns about the structure, or location, or if my personal situation was different... £20k might not be enough. 

Much of my attitude to my upcoming completion is based on the specific property I'm buying/work that needs doing, the time of year, and the mitigations I have in place should something unexpected go wrong - change one of those variables and the amount of money I'd have wanted on the side before even offering on the place would have gone up... which I think is normal for most people? 

Crumble2018

We had no maoney at all left post completion. Our deposit was gifted, and we would never have been able to save a deposit. So we had a choice of renting forever or taking the risk and buying somewhere.  We are both in our mid forties too, so haven't got time on our side.  Our mortgage is more than our rent, so we will never have savings again.  Our emergency fund is a credit card and not eating!!! To some that may be frightening, but to us, it's way better than renting for life.

Slappermum

How on earth did you pass affordability?

SensibleSarah

I also had no money to speak of post-completion until my next pay day. Had a gifted deposit (10% of a £90k house meant deposit was £9k) and just about enough to cover moving costs, surveys, solicitors fees etc from my meagre savings (was in my arranged overdraft by the end of it tbh). Fortunately I didn't have a crossover of last month's rent/first month's mortgage. 
Just had to take the chance and hope that nothing urgent broke in the new house for the first few months. It was fine. Had to stump up for a boiler service in the first week, but everything else I just fixed as I went (or it's still broken 10 years later in some cases - like the radiator in the spare bedroom) and I had a fridge, washing machine, sofa, microwave and bed to bring with me from my rental, along with a few mugs, saucepans, plates, cutlery etc. It was enough - but stressful. 

Next time I probably won't have a whole lot of savings again, as after early repayment fees for my mortgage on top of the usual moving costs, I'll be fairly tight if I want a 20% deposit on the next place, which is the aim, but am happy to risk it again and have a credit card for a worst case scenario. 

newsgroupmonkey_

Slithery said:

How much do you have in your emergency fund?

I wouldn't even contemplate buying a property unless I was going to have at least £10k spare in savings.

I'm going to guess you currently have at least 32 toilet rolls and 10 packs of dried pasta in your cupboards?

Crumble2018

Slappermum said:

How on earth did you pass affordability?

Affordability is not based on whether you have savings - it's based on whether you can afford to pay the mortgage - which we can.

Soot2006

We had very little left after we bought our first house. Things broke, we dealt with it or waited until a paycheque.  Got loads of free stuff from Freecycle back then. I look back fondly. We never regretted the house. Over 10 years we turned into exactly what we wanted. So it took a long time but we really enjoyed the journey. As long as you are in a position where you're unlikely to get repossessed within 10 minutes of moving in, then it's just a great feeling that its yours. Even if everything is broken

Slappermum

Crumble2018 said:

Slappermum said:

How on earth did you pass affordability?

Affordability is not based on whether you have savings - it's based on whether you can afford to pay the mortgage - which we can.

Yes, but based on your previous description of your circumstances, you are only just able to pay the mortgage (your emergency fund is a credit card and not eating and you will "never save"). I was always under the impression that affordability involves being checked against a significantly higher interest rate (and monthly instalment) than the one agreed.

I am not judging or picking a bone here, just genuinely surprised.