What should we do? Can't decide

veggielove

Hello

We are a family of 4. 2 young children.  1 wage family. Not a massive wage.  I'm a stay at home mum. We have a few thousand in debt not crazy amounts.

We have the chance to buy a property from family. We currently private rent.

If we buy it's less monthly mortgage than the rent of 575 which is cheap as we live in a not so great area. 

However the fuel for husbands commute will go up massively and who knows how much with the current state of things. Then all the other added home owner costs. We would be 1st time buyers. 

Our whole family is not great with making money decisions so I'm posting here.

Would you stay close to work and rent or buy and be a 40 mile round trip away?  40 miles a day 5 days a week is way more than the less than 4 miles he goes now round trip.

eddddy

You mention the monthly mortgage payments - have you spoken to a mortgage broker? Have they indicated that you could get a mortgage and how much deposit you would need?

You mention that you're in debt - so does that mean you don't have a deposit?  If you don't have a deposit, that will be a major problem.


Unless you mean that the family member is selling the property to you at a discount - for example, they're selling to you at 90% or less of it's valuation.

In that case, if it's a close family member, you might be able to get a concessionary purchase mortgage (but your debts might still be a concern for the lender).

If you haven't done so already, maybe start by speaking to a mortgage broker to see if you have any chance of getting a mortgage at the moment.

veggielove

Broker would use equity to pay deposit as family paying it for us as they are moving. 

We would pay around 414 a month on mortgage broker has said. Current rent 575 but Fuel will be more and council tax and other home owner insurance etc plus all the bills going up anyway etc 

veggielove

I'm just nervous 

eddddy

veggielove said:

Broker would use equity to pay deposit as family paying it for us as they are moving. 

It's not clear what you mean.

Do you mean the family member who is selling you the property would give you a gift of some money. And you would use that gift as your deposit?

How much would the gift be? Would it be enough to pay off your debts, and cover a 10% deposit on the house?


Again, you'd need to speak to a mortgage broker to see if that's acceptable to a mortgage lender.

(If they're a close family member, it might be easier if they sold the house to you at a discount, and you got a concessionary purchase mortgage instead. It all amounts to the same thing.)

veggielove

The broker told me she would use some of the sale price as deposit. So yes family is paying 5 % deposit for us. 95 % mortgage. I don't know how it all works though. 

She (broker) has said we will get a mortgage she already checked. Our debt will be paid off soon it's like 4000 debt.

She wants to do a joint mortgage application so she can include the child benefits and child tax credits into the income.

veggielove

The debts didn't go against us for a mortgage in principle with the broker  

steampowered

Generally it makes sense to buy rather than rent. As you will build up equity in the property over time, and fully own it by the time you retire.

Would you be getting a discount on this property or at least a "good deal"?

If you are paying full market value, there is no reason to buy this property over any other property. Could you buy a similar property closer to hubby's work? 

MrsPorridge

I think it makes more sense to buy than rent.  However, have you considered the time of the commute?  How long will it take your husband to drive that?  Then factor that into how long he is out of the house and how tired he will be when he gets home.

veggielove

steampowered said:

Generally it makes sense to buy rather than rent. As you will build up equity in the property over time, and fully own it by the time you retire.

Would you be getting a discount on this property or at least a "good deal"?

If you are paying full market value, there is no reason to buy this property over any other property. Could you buy a similar property closer to hubby's work? 

Thanks. Yes family member is paying deposit on this but wouldn't be if we bought another closer because its coming off their profit of selling it as in they are gifting us 5 % deposit to buy it. 

veggielove

MrsPorridge said:

I think it makes more sense to buy than rent.  However, have you considered the time of the commute?  How long will it take your husband to drive that?  Then factor that into how long he is out of the house and how tired he will be when he gets home.

He would be more tired I would see him even less than I do now as its 30 mins in good traffic to get there and longer on way back as will hit rush hour motorway traffic.