Rent/mortgage

Kataratarina

This is my 1st post in a long time becuase ive been lurking because i lost my passwoprd and never got round to making a new name,lol....but everyday on my lunch im on here!!!:p


Me and my bf are thinkin of moving out of our parents!? now as the current situation is ive noticed that house prices have started to slump...:D

But realistically is there any point in buying a house, or would it be less stressful to rent and not have the solictor fees and whatever else....:o

I know that theres no investment in it but is there any point in me and my bf paying 1000k a mth for a mortgage!!!!

Thanks in advance...

iluvfreebies

obviously there will be ppl who disagree with me but i find it much easier to budget when renting - if a boiler bursts or the roof falls in its nice to know that it isnt your responsibility to sort out. if you have children etc then i suppose the investment for them would need to be looked into but i feel that renting for a while at least is the way to go.

Tobyruby

I have found my mortgage to be a millstone round my neck. OK, so in 20 years I'll own the house, but so what? My advice would be, put having a life first, but plan for when you want to settle down. For example, rent something you can easily afford right now. Save as much as you can to cover a deposit, solicitor fees, moving costs etc. When you do take the plunge, you want to have a bit of cash that isn't ringfenced by your mortgage, rates, utility bills, repairs, decorating. I did all that, and it was great for the first couple of years. Then my circumstances changed and I have been screwed ever since. Most people have the opposite experience, i.e. it's tough at the start and then it gets easier. You never can tell!

talksalot81

The other thing you need to consider is the relative costs. Renting and mortgaging identical properties will be enormously different in financial terms. Even with the slower market, you would probably pay twice as much for an IO mortgage as you would pay for rent. Whilst some people may be pathologically afraid of renting, no one who knows what they are talking about can deny that purchasing at the moment will be an exceptionally expensive option. The only way one can refute this is by assuming a capital gain but this is something predicted at the moment only by those with a VI in your spending money or who are unable to appreciate the fundamentals of the market.

IvanOpinion

Long term a mortgage will generally be the best option (just don't over stretch yourself) ... short term, the market is volatile at the minute and nobody knows which way it is going to go, so you pays your money and you takes your chance.

Ivan

talksalot81

IvanOpinion wrote: »

Long term a mortgage will generally be the best option (just don't over stretch yourself) ... short term, the market is volatile at the minute and nobody knows which way it is going to go, so you pays your money and you takes your chance.

Ivan

Definitely, if you are in it for 10 years and up, you will very likely have chosen the best option. But Ivan has made the point that should not be understated, do NOT over stretch yourself. Paying out 50% of your income to cover mortgage payments is overstretching significantly, you realistically should not be paying more that 1/3 or your income on mortgage payments (even then, many wise economists would consider you are pushing your luck).

blackadder1b

I agree with all the comments, It is only now after 4 years that we have bought the house that we can afford to do bits and pieces to it.

However we did get a 10 year fixed rate at 4.8% and this is only 2 years old, so that has helped

I agree also with talksalot 1/3 of your income for your mortgage or less, this should get you into a good positon. also try to get any credit cards paid off before you even think about it! as you want as much free money as possible.

LMac

For now, why not start saving in a very serious way. Work out how much you would pay in mortgage payments, bills, insurance etc, and put that much away every month minus whatever you pay now for rent/bills. If, after 6 months or so, you are struggling to keep putting that away, then carry on renting. If you can do it, then you know you can afford a place, and have the added bonus of a nice lump sum to pay for fees and a deposit.

belfastgirl23

It all depends on so much...but it is well worth thinking properly about.

First thing how old are you? How much do you earn? Realistically will you get a mortgage and can you put down a decent downpayment?

Secondly where do you live? Some areas are a lot cheaper to buy in.

Thirdly how stable is your relationship? I'd caution against your first home together being a recently bought house - there are a lot of stresses and strains in adjusting to living together and if you add in the implied commitment of having a mortgage together and the financial weight of managing mortgage payments and all other household bills for the first time, it can be too much to take at once.

Finally though if you are quite young I disagree with the other posters re how much commitment to take on. IF you are both young, in good health and relatively debt clear I'd say throw caution to the winds and stretch yourself if necessary to get the house you want. Of course have fallback options - a room you can rent out if necessary is a good thing. BUT if you buy a cheaper house that you don't really want to live in you end up moving on faster (and moving costs £££). the other thing is that your wages do tend to increase so your debt seems like less as time goes on - our first mortage now seems like peanuts to me (it was £100k) but at the time it was scary as hell and right to the limit of our multiples. We sat on cushions on the floor and my gran's old kitchen chairs for the first six months too until we could afford a sofa!

Anyway lots of luck whatever you decide.

talksalot81

belfastgirl23 wrote: »

Finally though if you are quite young I disagree with the other posters re how much commitment to take on. IF you are both young, in good health and relatively debt clear I'd say throw caution to the winds and stretch yourself if necessary to get the house you want.

When your proposed approach has a chance of potentially ruining an individual's life, it simply is bad advice.

belfastgirl23

talksalot81 wrote: »

When your proposed approach has a chance of potentially ruining an individual's life, it simply is bad advice.

It's simply another viewpoint. The OP has to make their own mind up about it but it was advice I got, considered, and acted on. And it was the right thing for me. Buying the wrong house could also potentially ruin your life surely