Worried First Time Buyer - In Too Deep?

Kez100

When we bought the two houses we have we always stayed well in our ability to borrow. I can't remember the first but on the second we bought for 75k (but could borrow on our earnings 90k). I have always had the attitude my home needed to be as risk free as it possibly could be. Obviously having been burnt with negative equity on our first home we were forced to appreciate by experience the reality of housing markets - values can go up or down and interest rates can go up or down.

amosp

VFR-Rider wrote: »

Also (just playing devils advocate!) how long have you 2 been together? What would happen if you were to split?

As my signature says, I have a decent deposit which is increasing by a little over £1k a month and I have taken the decision not to buy. This is purely my opinion, however I rent so do not feel any pressure "for my own space". Also it means I should have a reasonable idea of bills etc...

We have been together just over 4 years now. Whilst it's not very nice to think about splitting up I can't help but have some concerns in the back of my mind. Of course this may stem from both my parents having been through a nasty divorce and having re-married.

Stevie1

amosp, as a rule of thumb you should aim to not spend more than a third of your total income on housing (mortgage or rent).

It does seem like you may be putting yourselves under a lot of pressure and maybe renting + saving would be a better option for the time being, while you are working on enlarging your income.

otter1_2

amosp,

Sounds to me like your doubts are weighing in heavier than your positive thoughts at the moment. Would it be a relief if someone told you that you absolutely could not buy? If you think it would be, that could be a strong indicator that you aren't ready, for whatever reason.

I would strongly recommend testing the water by living together in rented accommodation first. You will be with each other every day and any problems will come to the surface, especially any related to unequal positions (whether that be one having less money, one going out more or one doing less around the house). Once you have been through this, then having that extra strength in your relationship will also help you to tough out any lean financial times when you do come to buy a house together.

Lavendyr

Wow. You are very young and on a very low wage to be buying, and I would not recommend it at all. Firstly, you've never lived together before, and I promise you, it will be different from what you expect. Secondly, you admit you have concerns about your gf's spending yet you are ready to plunge into a huge mortgage with her without even having lived together yet. Thirdly, you are both on very low wages and you are talking about borrowing 5x your joint salary, if I've understood your figures correctly. This all adds up to a very worrying picture.

Please do not be pressured into buying a house if it is going to be too tight for you. It is *not* dead money to rent, especially if it's your first time living together - it's far cheaper to rent for 6 months and see how things work (both in terms of living costs and in terms of getting on with each other) than to get a mortgage, pay all those fees, buy furniture, and then find out 6 months down the line that you can't afford it after all or that things aren't working out between you and having to find your way out of it all.

Please think about this very carefully. And repeat after me - there is nothing wrong with renting first!

kunekune

Why are you so opposed to renting? A lot of respectable people rent, for varying degrees of time. Rent does not mean council housing or squalor. In almost all cases it means paying less in rent than the interest on a loan, no maintenance costs, and the chance to save for more of a deposit.

You sound deeply worried. And for rational reasons. It sounds like you don't think you can really afford it, and you are not certain the relationship will survive poverty. I was alarmed by your comments about your girlfriend not being good with money and by the idea that your amount of pocket money depended on how much each of you earned. If you are going to stay together, it has to be as a partnership, not as something like flat sharing. Your attitude to money at the moment sounds more like flat sharing.

It isn't too late to pull out, and what you might lose by pulling out now is much less than what you might lose by going ahead and getting into trouble.

If you do go ahead, is there room in the house for a lodger? THat might make a lot of difference, even if you don't do it from the start, it can be an option for the future if costs rise. But that won't work if children are on the horizon.

WestonDave

I think you are taking a lot of risks in proceeding with this. I'd say at the outset that financially it is possible but to me there are all sorts of alarm bells in your various postings.

Your relationship for a start although 4 years old is still in the "when I feel like seeing her" stage - once you live together and have no choice but to spend time with her every hour other than work time, it is a different experience. Add to that the fact that money is one of the biggest factors in splitting and you already think she is extravagent with her money. Stick that lot together in a scenario where you will have to watch every penny and its potentially explosive.

The house isn't a bargain - if you've been looking at it for a few months and still had a chance to buy one, what you are paying for it is the maximum the builder is likely to get. Bear in mind new builds traditionally drop in value once there is a set of footprints on the doormat quite simply because its not a new house anymore and doesn't attract the premium for being all new and untouched. Given that at best we have an uncertain market not a booming one I could easily see your hard fought savings (assuming your GF has little to put in) being lost if you had to sell soonish following a split.

The fact that you are this far into a risky decision on such low salaries also suggests that you will realistically struggle to control your spending. If you could live with furnishing the house from relatives cast offs and cheap purchases from the paper classifieds I'd say you have a chance but reading your posts I'm getting "IKEA blowout" signals which is further going to build the financial pressure. Frankly if you have been in work since 18 and have barely progressed beyond minimum wage then the chances of you getting much salary progression in the next 2 years before the mortgage deal finishes and payments go up don't look good.

My advice would be to go and find a flat somewhere to rent, save up as much as you can, take this as a kick up the rear to sort your career out, and see what is on offer in 6/12 months when the market has sorted itself out. I would be very surprised if there weren't similar properties available at similar prices in a years time by which time both your relationship and your career could be in a much better place to take on such a commitment.

Sorry if that sounds harsh.

dfitps

Are you planning to start a family very soon? If not, do you really need three bedrooms and a garage? What about marriage - is that on the cards? (Weddings can cost if people have expectations for what they'll be like!)

Living away from parents and sharing for the first time should be fun and to be honest it doesn't sound awfully as though it's going to be fun for you, as you're going to be having to be so careful with money! Not many people go straight from their parents home to a family-sized house these days, unless they really are about to start that family. Why not rent a nice one-bedroom flat somewhere and enjoy yourselves furnishing it and learning to live away from parents and together, while saving as much as you can for a deposit?

Looked at purely from a financial point of view, it does look as though you're going to be really stretched, so on those grounds alone I'd say avoid this house. On top of that the fact that neither of you has any experience of living away from parents yet or together also rings alarm bells. If you go for an interim flat to rent it could still be really nice and somewhere you both enjoy setting up house in, and it will still leave you the fun experience later of going up a step to a family house later on. Living together as a young couple ought to be about waking up and enjoying weekend mornings with breakfast in bed and the papers, then going out for the day or doing something fun, not one of you having to go off to a weekend job because you're scrimping and saving for a house you have no time to enjoy and don't really need until children are in the offing.

Ask yourself - have you got money for all of the following as well as the basic big furniture like sofa and bed? Washing machine, toaster, other appliances, garden hose, spade, for, buckets, mops, toilet brush(es), bathmat(s), curtains, television, freeview box, doormats, cleaning cloths, mirrors, torch, plants for garden, full-size patio or landscaping (new builds often start with bare minimum), garden furniture, hooks for doors, drill, stepladder, telephones, spare bed, vacuum cleaner, saucepans, knives, towel rails, clocks... the list is endless really! Doesn't all have to be new - lots could be secondhand or borrowed when needed - and some you could decide to do without while you're saving - but it's a lot. We moved into a new build recently that was a step up in terms of space for us and it's amazing how much stuff you end up looking to get.

Finally, one last thought - builders are not daft! You aren't likely really to be picking up a bargain - if it seems cheap it's because for one reason or other the builders think that demand for that particular development is getting low or they think they won't get more - which means this is unlikely to be the only house in the area that will end up going for what currently seems cheap to you.

amosp

otter1 wrote: »

amosp,

Sounds to me like your doubts are weighing in heavier than your positive thoughts at the moment. Would it be a relief if someone told you that you absolutely could not buy? If you think it would be, that could be a strong indicator that you aren't ready, for whatever reason.

I would strongly recommend testing the water by living together in rented accommodation first. You will be with each other every day and any problems will come to the surface, especially any related to unequal positions (whether that be one having less money, one going out more or one doing less around the house). Once you have been through this, then having that extra strength in your relationship will also help you to tough out any lean financial times when you do come to buy a house together.

You’re absolutely right and this is something that I’ve been accused of (whether that’s the right way of putting it) before. Whilst I would love to have more confidence the truth is yes I probably would be relieved to be told we couldn’t afford it.

As for renting. I’m not really sure why I am opposed to it and the only excuse I can offer is plain old ignorance.

Thanks again for all the advice and opinions that have flooded forward. Seems I have some serious re-considering to do and to discuss with my girlfriend.

mlz1413

I think the size of house you are buying for a FTB is your biggest problem, you may want to buy now so that you don't have to move again but you are buying above what you can believe you can afford and you are worried.
Thre is no point moving into something you will not enjoy as you are constantly worried about money. (or never at the house because you are working 2 jobs)

I would seriously think about renting for 6 months, this will give you and your GF a real insight into paying bills, if you are worried about affording £688 mortgage look at places for £550 or under (don't know your area so this may or may not be possible) this will mean if you can afford to rent a 1-2 bed flat with all it's costs then you will know for yourself if you can really afford that 3 bed semi with garage. if you realise you can't you can both go back to what you are doing now, living with parents.