Using 'Every Penny' for a Deposit - Bad Idea?

Saga

Just wondering how many people have bought a property but had only enough savings left over for necessary repairs/alterations? 

I've only just realised that I've not accounted for a 6-month emergency fund – although probably not an issue as I've been looking for years but not found anything suitable, so probability would dictate I won't find anything soon!  Thing is, I know and have known people who scrimped, begged and borrowed from family to only just make their deposits (often small percentages too), and yet who didn't ensure they had emergency funds.

This is MSE so I imagine the majority are very sensible, but I thought I'd ask anyway if, despite the above, it's a bad idea.

macman

All depends on what degree of compromise you are prepared to make. If you move in and find that a new boiler is required, then living without hot water and heating is for most an unacceptable situation. But many minor defects may be perfectly tolerable.

numbercruncher8

You are probably in a better position to judge that than anyone on here.... some people may have further 'emergency' funds beyond their own, ie BOMAD.

Anyway not enough information for anyone to say really.
I mean, if the deposit was £250k and you have a ultra-safe job paying £100k, then moving without a buffer is probably going to be OK as it quickly gets replenished.
If you have the same deposit of £250k but your job isn't guaranteed and pays £30k then that's a different matter.

No doubt there will be people who have gone down the route of going 'all-in' , so to speak. But that doesn't necessarily make it right for you.

hazyjo

Doesn't really matter what others have done, only you know how you live.

I had over ten grand when I moved in for doing my house up. Usually I don't have even one thousand.

But I know I have enough spare cash each month, or a clear credit card (and no loans), or could borrow from my mum.

Others will obviously tell you to have X number of months' salary in the bank and to save X% each month. That's obviously the sensible choice.

HampshireH

We put 58k down as a deposit as first time buyers. Left us with nothing.

But we knew that and we had rented the place 1st so we knew what we needed to do and with what urgency. 

Was also able to save about £500-700 a month post purchase most months.

They were life savings and it was very scary to do. 

I wouldnt choose to do it again.

MovingForwards

I had about £1k left when I moved (£350 was cash towards my retirement), a few weeks after that it dropped to about £660 (£350 was still towards my retirement) as I had a tree surgeon come out to cut down some huge trees.

I'm slowly building savings back up and putting on average £500pm away due to saving on commute costs at the moment. 

In the time I've been here £10 has been spent on my home. I had previously purchased paint, the furniture and big freezer in the rental was mine and some white goods were left in my home as part of the price, therefore no costs incurred when my purchase finalised.

Now I'm nearly upto £2.4k and it's only taken 4 paydays and my salary isn't much.

Not everyone had loads of money in the bank when buying, a lot depends on what the property is like, how much can be saved each month, whether there is access to a CC or quick help from family, risk appetite and luck.

Others won't do it unless they have 6+ months savings, which isn't realistic for those on lower incomes.

iwb100

It depends. I’d want some buffer but your point in life, your ambitions and current situation all dictate what might be sensible.

What I would say is when you move expect that ideally you will want to spend money on the house and things in it. Just moved myself (not the first time!) and realised the dishwasher being left behind was broken, the fridge freezer left behind didn’t freeze and the electric garage door needed replacing. I could have lived without a dishwasher and a freezer and a garage door that went half way before sounding like it was about to bring the house down. Sure. But to make my new house enjoyable I just replaced them all. It costs money. But I moved knowing I’d have to spend some. And that’s before we come to some of the running repairs that need to be attended two, patching the roof and replacing the back door etc....and well before the desirables like new kitchen and utility....

bouicca21

Buying in London meant there was no way it was possible to have an emergency fund.  I am always amazed at posters on here who think it is possible to buy a house, pay a mortgage, buy furniture and white goods, rewire, replumb and build extensions, and still have enough left over for a social life.  I still remember discovering we needed a new boiler during one of the coldest winters on record. We piled coats on top of the duvet and still needed to sleep in our dressing gowns.  

That sort of experience is clearly best avoided, but if you have to stretch to get a roof over your head, then stretch is what you do.

blue_max_3

bouicca21 said:

Buying in London meant there was no way it was possible to have an emergency fund.  I am always amazed at posters on here who think it is possible to buy a house, pay a mortgage, buy furniture and white goods, rewire, replumb and build extensions, and still have enough left over for a social life.  I still remember discovering we needed a new boiler during one of the coldest winters on record. We piled coats on top of the duvet and still needed to sleep in our dressing gowns.  

That sort of experience is clearly best avoided, but if you have to stretch to get a roof over your head, then stretch is what you do.

I'm amazed you had dressing gowns! I've never had one. Kind of want one now : )

getmore4less

You can try to plan for everything but when younger you have time on your hands, with career progression.

As time progressed you address the ballance keeping a bit more back as the end game needs enough to retire.

The retirement fund is just the emergency fund you did not spend. 

Vestraun

It really depends, I would say minimum you want £2-3k for the unexpected. However if an older property that might at anytime need a new boiler etc you want to hold a bit more back.