Buy what I can afford vs. Buying something better

Dadada486

This is something I'm really struggling with at the moment, as a first time buyer and admist the current turmoil in the housing marketing.

Given the current situation, there three options. 

1) buying something cheaper and affordable so that I don't have to rent

2) save for a bit longer and buy some thing much nicer and more expensive perhaps 6 months to a year down the line

3) perhaps borrow some money, not huge amounts (even 10k makes a big difference), from a relative, and buy something nicer now. 

Looking more of a personal opinion. What would you do? 

MFWannabe

Personally I’d go for option 1 
Why? Because having my own home is what matters to me 

Option 2: No one knows what house prices are likely to do in 6 months or 12 months. Interest rates are expected to go higher also. Rent increases are more likely too 

Option 3: You cannot borrow money to put towards a house purchase, if you do the loan will be taken into account on affordability 

It all depends of course on other factors such as age; housing costs in your area, size of deposit, what mortgage amount you’re likely to get etc 

Schwarzwald

Option 2, 6 months goes by quickly and currently lots of uncertainties which might clear up a bit in the months to come

p00hsticks

Dadada486 said:

2) save for a bit longer and buy some thing much nicer and more expensive perhaps 6 months to a year down the line

Realistically how much more are you going to be able to save in 6-12 months ?

What percentage of the house prices in your area is that likely to be ?

Even if you can put away a couple of grand a month, unless house prices are very low where you live I can't see it making much difference to what you can afford to buy - or are you banking on house prices coming down considerably over the next year.?....

dimbo61

Better question should be
1 Do I carry on renting for the next 20 years just in case house prices crash
2 Look at what's available in the area I want to live in and see if MY savings will provide a 10/15/25% deposit.
If you can buy a house rather than a flat
If you can get a freehold rather than a leasehold property.
All of the above depends on where you want to live ?
London/South East or somewhere cheaper in England  !

steve866

I’m curious how you are going to be able to afford something much nicer in as little as 6 months? If this really is the case then I’d wait, or start looking now given that purchases can easily take 6 months to complete. Moving is stressful and expensive (tax, legals etc) so doesn’t make sense to buy now if you can get something much better very soon.

Dadada486

To those asking about 6 months affordability, its because my budget is currently a bit more than an easily affordable place. Basically its a difference between one bedroom and two bedroom. For two bedrooms I'm about 10-20k out, which is why I said borrowing from a relative is an option. One thing to remember is 10k makes a big difference. It doesn't sound like a lot on paper, but it takes more than a year to save 10k.

p00hsticks

Dadada486 said:

It doesn't sound like a lot on paper, but it takes more than a year to save 10k.

That's why we're querying as to whether Option 2 is realistic - that (assuming house prices remain static)  you are not going to be able to save enough in just a further 6-12 months to make a real difference to what you can afford to buy. 

And as others have said, mortgage companies generally won't be happy about you borrowing money from relatives to boost your affordability, sp Option 3 is unlikely to be  straightforward ....   

MultiFuelBurner

BUY A HOUSE !!! 

Hopefully you are and not going for a flat.

KSS1991

Buy a house now

theoretica

Work out exactly the maximum you can afford.  Start looking seriously at what properties are available while you continue to save and your budget goes up.  At some point what you can afford and what you think would be worth living in will cross over and you will think it worth putting offers in.  Your first offers may be overoptimistic and rejected, but it will be educational at least.