Realistically, what are our options?

Emmia

lika_86 said:

mexican_dave said:

@lika_86 you say "buy outright", as you haven't really explained how. I ask are you expecting the OP to have obtained a mortgage once the kids are no longer an expense (dream on!) and then at retirement use pension lump-sums to pay-off the mortgage? You haven't outlined the steps to be in a position not to be renting. I am sure the OP would like it explained too.

OP gets a job, if it brings in £1k a month then over the course of 20 years that's a good extra lump sum, combined with some savings over that period and downsizing to a one or two bedroom house and they could definitely buy in certain parts of the country if not where they are now.

But, for those 20 years they're paying rent to a landlord, not paying off the capital on their own place - and then when they want to retire they've got to hope the money they've put by is enough to purchase a property outright.

Effectively they pay twice - once they have a mortgage and a property they won't be renting anymore, and the money they spend on rent will be paying off the mortgage.

Yes, to buy they've got to put a deposit together + money for fees requiring committed savings, but they've got to do that for your approach too, and actually what you're asking is 20 years of hard savings on top of rent, and not benefitting from any house prices rises.

A purchased property that's too big can be downsized too.

lika_86

Emmia said:

lika_86 said:

mexican_dave said:

@lika_86 you say "buy outright", as you haven't really explained how. I ask are you expecting the OP to have obtained a mortgage once the kids are no longer an expense (dream on!) and then at retirement use pension lump-sums to pay-off the mortgage? You haven't outlined the steps to be in a position not to be renting. I am sure the OP would like it explained too.

OP gets a job, if it brings in £1k a month then over the course of 20 years that's a good extra lump sum, combined with some savings over that period and downsizing to a one or two bedroom house and they could definitely buy in certain parts of the country if not where they are now.

But, for those 20 years they're paying rent to a landlord, not paying off the capital on their own place - and then when they want to retire they've got to hope the money they've put by is enough to purchase a property outright.

Effectively they pay twice - once they have a mortgage and a property they won't be renting anymore, and the money they spend on rent will be paying off the mortgage.

Yes, to buy they've got to put a deposit together + money for fees requiring committed savings, but they've got to do that for your approach too, and actually what you're asking is 20 years of hard savings on top of rent, and not benefitting from any house prices rises.

A purchased property that's too big can be downsized too.

Yes, buying a house asap would be great, but the OP asked what is realistic. Taking into account ages and house size needs, I think what is realistic is not being able to buy asap but looking longer term.

Just looking at the figures, let's say that in three years' time they have a deposit of 5% together plus fees on let's say a £350k house (I've no idea if that's realistic for the size of house they'd need in the area but at least in my cheap home town it would get you a four bed house). Assuming a mortgage term until the husband's retirement at 68 that's 16 years. At current rates that's about £2.5k a month for the mortgage, that's £1k more than they pay currently. Doable if the OP finds an employed job but does require acting sharpish as each year that passes that mortgage term gets shorter.

If you were looking on the same basis at a £450k house then you'd be looking at approx £3.5k in monthly payments.