Buy what I can afford vs. Buying something better

Dadada486

MultiFuelBurner said:

BUY A HOUSE !!! 

Hopefully you are and not going for a flat.

Sorry, am I missing something. There are some people who say this saying it is somehow better to buy a house. A relative of mine also said this. I'm not sure what this means. I'm looking on zoopla and my filter is for everything. What do you mean by buy a house? Of course I would buy a bigger property if that were possible!

snowqueen555

Same situation here, a nice 1 bed vs a 2 bed that would need fixing up.

I'd love the 2 bed but in all honesty I don't have the money to do one up, plus the extra costs involved like higher council tax and upkeep. I also don't fancy having a lodger.

The current forecast of an 11% drop in prices in no way compensates for the interest rate rise from 4% to 5% let alone anything higher than that.

Dadada486

p00hsticks said:

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 ....   

Hmm... Not sure about this. My mortgage broker has already given me the max I could borrow and I thought all I had to do was make up for the difference, basically put down a bigger deposit. I'm buying with a large deposit. 

CSI_Yorkshire

Dadada486 said:

p00hsticks said:

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 ....   

Hmm... Not sure about this. My mortgage broker has already given me the max I could borrow and I thought all I had to do was make up for the difference, basically put down a bigger deposit. I'm buying with a large deposit. 

If you are borrowing from relatives, the mortgage companies will see that and the amount you can take as a mortgage will go down.

If money from relatives is a gift, and doesn't need repaying, then it won't affect how much mortgage you can take.

The mortgage company's solicitor would probably need something signed to say that it was a gift.

What your broker has said is the max that you could apply for.  It doesn't mean that you will get that amount.

theoretica

Dadada486 said:

MultiFuelBurner said:

BUY A HOUSE !!! 

Hopefully you are and not going for a flat.

Sorry, am I missing something. There are some people who say this saying it is somehow better to buy a house. A relative of mine also said this. I'm not sure what this means. I'm looking on zoopla and my filter is for everything. What do you mean by buy a house? Of course I would buy a bigger property if that were possible!

There are complications which can arise if you share a physical building with other properties - from noise to upkeep charges and organisation.  'All yours' can be simpler - but of course depends very much on your local property market and lots of people do buy flats.

snowqueen555

Dadada486 said:

MultiFuelBurner said:

BUY A HOUSE !!! 

Hopefully you are and not going for a flat.

Sorry, am I missing something. There are some people who say this saying it is somehow better to buy a house. A relative of mine also said this. I'm not sure what this means. I'm looking on zoopla and my filter is for everything. What do you mean by buy a house? Of course I would buy a bigger property if that were possible!

A house you will own the freehold (land it is on as well).

A flat is usually leasehold, you do not own the land, only the property, so usually have to pay maintenance changes and (ground rent if applicable). You also need their permission for changes to the flat, permission to keep a pet etc. You also have no control over the fees they charge you.

[Deleted User]

If you can then buying now is probably a good idea. While the ladder is a bit of a myth these days, if the gap isn't too big you might be able to get into what you want in a decade or two.

That all assumes your job is secure and you can take the high interest rates likely to come.

You will probably be in negative equity initially, but eventually house prices will rise to even more insane levels.

trailingspouse

Buy the best you can afford now.

But buy it with a view to moving on in a few years - so buy something that other people will also want (eg you might not mind living next door to a pub, but most people would, so you would be reducing your potential market in the future), make improvements that will increase it's value, or at least won't reduce it's value, again bearing in mind a future potential buyer (paint the walls a neutral colour, don't go for the lime green carpet, you get the idea). None of the improvements needs to be done immediately, nor do they need to be expensive. Save up and do what you can when you can.

I bought a house in 2000 for £30,000. Did what was needed - damp proofing, new (inexpensive) kitchen, put shower in, removed some hideous cupboards, painted throughout and laid carpet, made the garden look presentable - over the space of a couple of years. Sold in 2004 for just over £100,000.

Rinse and repeat until you get to where you want to be.