buy or rent???

indebtandneedhelp!

sorry if I've posted this in the wrong place or it's already been covered, I tried to look and could find anything!

right basically I've been in debt for about 4 years now since I brought my flat, I cleared all my previous debt and then went right back to borrwing what I couldn't afford to pay back! I currently have around 16k of unsecured debt.

my partner am I have decided we want to buy together and start a family. I decided before the HIP packs came in (and I'd have to pay out more money) to sell my flat, I currently have an offer on the flat I have accepted. which after paying my debt would leave me with around 38K left, the original plan was to pay the proceeds of the sale into a high inerset account, rent for 6 months or so to hope my credit would get better and then buy again. However everyone keeps telling me I am mad and would be throwing my money away. I spoke to my current lender (ABBEY) and asked if they would give us a morgage together, the answer was no (unsurprisingly) because of my credit history.

I spoke to a morgage advisor who said he would be able to get us a morgage but the iterest rate would be quite high, he has advised me to get a fixed rate one for 2 years and maybe interest only, pay everything on time for 2 years and then re-morgage. The property I am looking at is selling for approx 10k less than what it is worth because it needs a lot of work done (I have budgeted for this with the money from the sale)

but the bottom line is I really don;t know what to do for the best, any advice will help thanks xx

Phirefly

Now heres an example of where the stock property board rent-and-see reply seems more applicable, have you read weekend_warrior's thread, op?

brit1234

I would rent for another 6 -12 months. Prices are falling and there are no signs this will stop for a long while. Not even a interest rate cut will stop this thats if the interest rate cut is even passed onto borrowers which the last one wasn't in a majority of cases.

Why get a mortgage now if you get a cheaper one later especially as thousands of ponds are coming off prices each month. Apparently in London prices are falling £200 a day at the moment.

Hoario54

indebtandneedhelp! wrote: »

I spoke to a morgage advisor who said he would be able to get us a morgage but the iterest rate would be quite high, he has advised me to get a fixed rate one for 2 years and maybe interest only, pay everything on time for 2 years and then re-morgage.

I translate that to mean you can't afford the mortgage and in two years time you might not be able to remortgage the property as it could be worth significantly less than you paid*.

I think the only way your current idea would work over the next two years is if there is at least above inflation annual HPI and no one can guarantee you that will happen. In fact if I was a betting man...

*Possibly, maybe, could be, might be, 99% certain to be...

Dinah93

Interest only mortgages are (in general) more expensive per month than renting, plus you have all the solicitors fees, arrangement fees etc. And at the end of the day you are relying on property prices remaining stable or going up. Stick your money in a high interest account and rent for a year, and see how the property market plays out. By almost all opinions, you won't loose out due to a growth in property value in this time, and you will be debt free with a better credit rating.

geoffky

please wait..........you will be rewarded