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

[Deleted User]

We moved into a 3 bed new build from a tiny 1 bed flat.  We had a bed, I bought a cheap freezer, was able to take cooker from old place.  We had savings but sat on the floor for a long time (and then bought a sofa that broke within a year lol, learned a lot from that).  To be honest, we were lucky it was a new build (and a decent size) so nothing significant broke.  We had no spare money at all once basic furnishings were purchased.  I didn't have the DIY knowledge I now have, then.  I wouldn't have known what to do!  I still remember painting the dark lounge orange thinking it would brighten it up.  Not a good idea.

Davesnave

I bought at a time when house prices were increasing rapidly. There was a good deal on a do-er-upper and I grabbed it, but then the property went to sealed bids and that was my 'extra' gone.

I lived there on my own with a few sticks of furniture bought at auctions. The house needed a rewire urgently, so I learned about wiring and did it, adding cables for storage heating before the floorboards went back.  I bought the storage heaters on credit.

By the time I met my wife, I had a basic second-hand kitchen installed and the downstairs rooms decorated. I didn't want to show her upstairs because it was original and I still had floorboards up for some reason! It also had the original bathroom, but that was plumbed to a multipoint, not the geyser that still hung on the wall.

I'm almost sure we'd replaced that bathroom by the time we were married......

Savings buffer???

tweet86

I don’t think there’s really a right or wrong answer as everyone’s situation is different. Generally in life I always like to have a buffer, an emergency fund to help us through anything that might crop up.

We always keep back about 5k for things we need to furnish the house. First house we were moving from rented which was a furnished flat. We had old furniture off some friends but bought kitchen appliances, wardrobes and a dining table. 

I know some people who have put every single penny down and hoped for the best. They wanted to secure the best rate. 

silvercar

We've done it when it meant the difference between getting what we wanted and compromising. Would rather have compromised on spending to build a new savings pot, than live somewhere that was a compromise itself.

Burnie51P

I’m about to be a FTB, have been following this thread and the responses here have been so refreshing to read. The obvious ‘ideal’ is a healthy pot of cash on stand-by, but equally I know lots of friends and family, past and more recently that have gone all in without extra money after purchasing. We will have around 2-3k max when we move into our ‘fixer upper’, but we have made the choice that buying a house right now is the necessity over continuing to rent. We know that the first couple of years will be tight and require low/no-buying on anything non-essential in order to build up our emergency fund; we have 2 kids and busy full-time jobs, but we are also very lucky to have family etc. who we know we can rely on if in dire need of financial support. 

Angela_D_3

Funny story about a friend of mine who bought a flat and then forgot to pay her first months mortgage payment and spent the excess money she found had appeared by magic in her bank account on a bed having been previously sleeping on the floor.  That's how people did it long ago.  Personally I delayed kids for a bit (not long), worked in a bar at evenings and weekends to save up the deposit and then kept the 2nd job I was hoping to ditch post sale as it allowed me to buy nicer furnishings rather than make do.   My brother put every penny into the house, the BMW and had a baby the same year they bought and moans he's constantly broke ... well yeah.

Angela_D_3

Oh and if the boiler breaks you use the gym every day, shower and a work out get your money's worth.   And you spend less time at home and use the gyms heating and wifi in the evening too.  Amazing what you can do when you have to.

Hannimal

I am putting every last penny into the deposit and to fund the move. I am buying something that costs £240k and the deposit + moving funds are 50k. I figure that  my options were to either do this, buy something cheaper or wait another year and save before buying. 

The reason I ended not buying something cheaper is just because I live in a really expensive city and I am already at the low-low end of housing prices here. Going cheaper would've meant making more compromises and even £10k difference in the price is quite notable. So I didn't want to do that. 

The reason I didn't end up waiting is because whilst I can save £10k in a year while renting:
- house prices keep rising so saving £10k I could end up only £2-3k better off after a year (after rent) or having worse affordability than I have now if I wanted to keep a £10k buffer
- while saving, I am putting away another £10k into rent, so I'd actually be worse off after "saving" for a buffer
- anything that needs doing ASAP that I can't afford I can put on a credit card or get a small loan to cover. Even with interest I'd still be better off than I would paying rent, assuming it wasn't £10k+ worth of renovations

Hannimal

Uhm. Some people saying you should hold on until you could cover a boiler. First google result for a boiler on a 0% APR payment plan is eon who do one where you'd only pay £55.41 PCM for it. That's on 0% APR. So it absolutely beats me on what logic it would make sense to save £2k up front for it. In almost any scenario if you are renting, you will be worse off the longer you wait to buy.

Hannimal

Iiwb100 said:
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....

Hmmm.. maybe you've not rented for a while. I am renting while waiting to exchange and I have a fridge that leaks water everywhere and I need to dry it with a towel every two days to avoid having water on the kitchen floor, I've a washing machine with mouldy seals, my kitchen sink has an odour coming from somewhere down the pipes, my buzzer doesn't work, and I am currently sipping tea and wearing two layers and my fingers are starting to hurt because my living room is so cold (and it's only August). I pay £1100 pcm for this joy. My landlord knows all these struggles and has so far used the pandemic as a reason to not address them. I see no scenario under which for a first time buyer it makes sense to not move asap. At least you have the freedom to get the little niggles fixed up when you can.