Mortgage Vs Renting....HELP!!!

neverdespairgirl

aimeed1 wrote: »

Should we just wait until then to but....although again downside 7 years of potential investment lost and at 30 would be first time buyers!!!

upside - nothing wrong with being a FTB at 30, and you miss out of 7 years of potential losses.

ailuro2

What's the job market like for your chosen area after you've finished your degree?
Are there jobs near where you want to live? Or might you need to move to a different part of the country?

How stable are you and your OH? Have you lived together already, do you know about him leaving his underpants on the bathroom floor, leaving hair in the sink:rotfl:Things do become a lot more transparent once you're living together, and it can reaffirm your belief you're right for each other, or make you realise you can't live your life with a slob/drunk/nose picker or even a compulsively tidy person! I'm not trying to be negative, but I've been there done in my younger years, trying to get my name removed from the mortgage when the guy turned out to love beer more than me!!

The way the housing market seems to be going, if I were in your situation I'd find a small,easy to heat, easy to travel from flat and rent until you have finished your degree. It keeps you flexible for work areas etc. Or even consider a houseshare with other people which can be cheaper still, but can also be fraught..

For the time being concentrate on saving for the deposit for a home. Work out how much the home you really want would cost to pay a mortgage on, add on council tax, fuel bills, redecorating it, furnishing, even the cost of garden tools,carpets etc, and live by that budget but in your low cost flat. You'll end up with a good deposit and a realistic idea of how much money you want to tie up while you're still young.

Don't forget you need to live a little along the way.

inmypocketnottheirs

Let me stick my two pence worth in!

Bath has a pretty stable property market. There is strong demand and relatively short supply. Watch around you what is happening..... I would guess that property that is appropriately priced is selling, but any that are over priced will stick. Only you can do the research, that way you validate the facts. Are prices dropping? I would guess possibly not (though they could be, as in other parts of the country).

Therefore, what you may see is a stabilisation, where prices remain relatively static, but then as wages increase, the prices will creep up. In just two years time you could find that it may cost you £30k more to buy the same property. You then have to factor in the money that you spend in that time in renting, say £500 per month, £6000 per year. Over two years that £12000 has paid someone elses mortgage, so why not pay yours?

However, one thing to add to the mix. At 23 I think it is very young to be making such a commitment relationship wise. Purely on that basis it could be worth sacrificing getting on the property ladder for say 6 to 12 months, just to see if you can live together.

Best of luck!

beingjdc

aimeed1 wrote: »

Renting - The money you spends is lost forever, you are restricted in what you can do....but is cheaper than buying.

Buying - Investment for the future, gets us on the ladder before prices go up AGAIN.....but the mortgage repayments would stretch us.

Your mortgage interest is gone forever as well! You only "invest" the extra amount you pay over and above the interest payments. If renting really is cheaper, you could invest that extra and more in an ISA or similar. The nonsense about 'paying someone else's mortgage' is just that. You're paying the bank in either case, really.

Over the very long term (and currently that could be upwards of ten years) you're likely to be better of buying, because of inflation etc. But you'd be even better off buying at a low point in prices, not a high one - and better of waiting if the maths is as above and the place you buy isn't a place you plan to stay.

But, only you can decide what's right for you.

mitchaa

beingjdc wrote: »

Your mortgage interest is gone forever as well! You only "invest" the extra amount you pay over and above the interest payments. If renting really is cheaper, you could invest that extra and more in an ISA or similar. The nonsense about 'paying someone else's mortgage' is just that. You're paying the bank in either case, really.

Why do people convince themselves that mortgage interest is wasted money? I cant find the comparison between mortgage interest vs renting at all.

Buying a property is an investment and over 25years every penny and more that you have spent on mortgage interest will be paid back to you by the growth in the property.

You may well pay back £250,000 on a £125,000 mortgage yes! But at the end of the 25years you are pretty much guaranteed, your initial £125,000 back, the £125,000 back you ''wasted'' in mortgage interest and probably the whole amount doubled again in property growth.

(Based on last 25-50year cycles)

With renting, you dont get 1 penny back.

I really dont see how people compare the 2, 1 is a long term investment, the other is '' just paying someone elses mortgage off''

I suppose its the renters who convince themselves of this:rolleyes:

My 2p worth anyway.

beingjdc

That's called inflation. The money you save will earn interest too. I know you said last time we had this argument that you couldn't think of anything which had gone up as quickly as houses in the last 20 years, so I looked some up. They include US shares, Asian shares, UK shares, Gold, Silver, and Oil.

cells

Voyager2002 wrote: »

Buying involves borrowing money, and paying interest on those borrowed funds. Interest is simply rent for someone else's money, and is lost for ever, just like rent for a home.

Remember that your lives may change in all sorts of ways, and so you may need to change where you live. Doing so is a lot cheaper and easier if you are renting than if you are buying.

I suggest that you continue to rent while you are happy, and only buy when you have an immediate reason to do so.

she is doing a masters degree in beckhamology, dont waste your breath

poppy10_2

inmypocketnottheirs wrote: »

Let me stick my two pence worth in!

Bath has a pretty stable property market. There is strong demand and relatively short supply. Watch around you what is happening..... I would guess that property that is appropriately priced is selling, but any that are over priced will stick.

http://www.propertysnake.co.uk/site/postcode/ba1