To buy or not to buy..

TheStig_3

Hi I'd appreciate your thoughts...

We've been thinking about moving for AGES....costly wait unfortunately but all the same, a 3 bed semi property has recently come onto the market very close to our current home, a big old (but modernised) 3 bed maisonnette with loads of space.

The 3 bed semi is internally poor, but has a fair bit of land that we could use to extend the property before improving the internal, new kitchen, bathroom, skimming, wardrobes, etc.etc.

Dilemna - we are currently mortgage free (after a lot of effort) and we know the property thats just gone onto the market has had loads of interest.

We are considering offering to buy the property outright, using a BIG chunk of our savings then borrowing the balance for the 3 bed semi to guarantee we get it. At that point we could THEN put our current home on the market and really push to sell....it's a bit scary given the current economic climate, we know we may wait a while to sell, but there are no other properties similar to our own on the market and it is a nice example, so hopefully we'll sell fairly quickly (should have made that a BIG hopefully !)

Are we mad to consider it ?

Financially the new mortgage would be hefty, but we could manage it for 8 - 12mnths without too many problems...

Concern mainly with regards to what happens if the market crashes and we end up getting 10 - 20% less for our property in 5 months time than it's curently valued at ?

Not sure why I'm posting this...just to get some feedback and opinion really.

Thanks

Nenen

TheStig wrote: »

Concern mainly with regards to what happens if the market crashes and we end up getting 10 - 20% less for our property in 5 months time than it's curently valued at ?

Not sure why I'm posting this...just to get some feedback and opinion really.

Thanks

If it was me I'd calculate for the worst case scenario and hope for the best! I think a lot depends upon your circumstances: age, income, any dependent (possibly future) children etc. For example, if you are nearing retirement without any other dependents and not a huge pension forecast then that is a very different situation to a pair of young high earners... a family with young children would have a different set of needs again.

Would you be able to recover financially if the worst happened or are you risking future security? I suppose I see it as a gamble and the golden rule of gambling is: Do NOT gamble with anything you cannot afford to lose!

If the worst happened and you couldn't sell yours for a year or more and then you got 20-33% less (in the last HPC some areas dropped by that much or more) for your current property would that mean real financial hardship for you... or would it just be annoying? If you could actually cope with that sort of loss and you really love the semi then go for it... if that sort of loss would mean you'd be wiped out then my advice would be don't touch it with a bargepole!

TheStig_3

Cheers 4 the advice, we have 2 kids, both 40ish, just me working, to say we could afford it if it crashed wouldn't be true as any crash is really just going to leave us with a bigger mortgage, the value of our current place and the semi are not currently miles apart, we are in a slightly nicer spot...

The key thing 4 us is really selling our current home asap...it's a tough one committing to the purchase, not knowing what sort of interest we are going to get in our place, but it's D day tomorrow so faint heart and all that .....

On the bright side, a property 5 doors up from us has just sold which will leave us as the only type of property for sale in the street (for now) ....

Appreciate the advice, time to sleep on it ...thanks again.

TheStig_3

After a great deal of thought we decided against it....a bit disappointed that we didnt go for it but had to consider a few pit falls...

a. How quickly would we sell our house...and at what price...£1000 month mortgage plus double council tax, gas, electric, water bills until that time.

b. Would we be able to build an extension...what we wanted was fairly big and if neighbours objected one of the biggest reasons for the move was lost.

c. Total refurb costs....if I miscalculated it could have been painful...

Im beginning to feel better about NOT going for it !

Time to book a holiday and forget about it for a while !

Cheers Nenen, nice to have someone elses thoughts without involving gossiping friends !!!

sniperpenguin

I really hope it isnt the one I was looking at! (sounds scarily similar!!!)

Where is it?