They Cancelled buying their house

renegadefm

Asking for a friend. Basically someone I know were on the verge of buying their first house, they won the bid on a house they liked and were literally about to sign the papers then the news broke out about the lockdown so they backed out,  as they thought continuing to rent wouldn't be as risky. So have they done the right thing given the government announced they would grant a 3 month mortgage holiday?
They havent lost their jobs yet but I think they thought they would by now. The main bread winner of the 2 of them works for a fire extinguisher company and goes around delivering them and replacing the empty ones etc, but his company is still paying him at the moment. Should they have just thrown caution to the wind and bought the house given their mortgage was excepted. 

elsien

Far too vague a question without an in depth knowledge of the relevant people's financial situation and life plans.

renegadefm

elsien said:

Far too vague a question without an in depth knowledge of the relevant people's financial situation and life plans.

I dont know all their financial situation, just know that they currently rent and the mortgage payments were going to be almost the same,  but just as they had a phone call from the estate agents they won the bid on the house which was obviously affordable to them the news broke out about a lockdown, and with that uncertainty flashed up in front of them they panicked and backed out of going ahead with buying the house. 
I  think about a week later after they backed out the government announced a 3 month holiday on mortgages which had ironic timing to it. So based on that have they done the right thing? 

MovingForwards

They may not have got the 3 month mortgage holiday as lenders expect those who have just purchased to be able to meet their payments, if they couldn't they should have notified the lender and not completed as it would have been a material change in circumstances.

According to the info on my lenders site.

Your friends obviously felt they were doing the right thing at the time of pulling out.

elsien

Absolutely no idea. 

comeandgo

If they had a mortgage they should have gone ahead.  The future suggests that getting mortgages for first time buyers will be more difficult due to the higher deposits mortgage lenders may require.  

renegadefm

comeandgo said:

If they had a mortgage they should have gone ahead.  The future suggests that getting mortgages for first time buyers will be more difficult due to the higher deposits mortgage lenders may require.  

Thats what I was wondering. I think in the end they didnt feel they could commit to it if they lost their jobs. What would they have to lose? Possibly the deposit? 

Thrugelmir

If they've terminated the purchase. Then nothing further is going to happen now. Better to focus on the future. Be another day. 

ACG

Renting gives more flexibility, if the world goes to pot you can rent a cheaper easily and relatively quickly.
But I know to rent my current house it would be around £450 a month more than my mortgage is.

There is no right or wrong answer, renting will be better for some people and owning better for others. They could have took out redundancy cover if it was a concern and that would have paid them some money for 12-24 months.