First Time Buyers, looking to start family soon.Advice needed please

mickym

Hello Board!

Ive been lurking on these forums for a while now, and have
got to say you all seem a great and knowledgable bunch...
but despite searching and reading so many posts im a
little stuck on how my fiancee and I are to make our step
on the housing market.


My Situation...

I am 30 and my fiancee is 33 and have been together now for
almost 7 years, we both still live at home with our parents
as we have tried to hold off getting on the property ladder
until market prices seemed to be more 'sensible'

We have a combined saving of approx. £5,000.

We earn a salary of £25,000 (me) / £ £16,000 (her) / COMBINED £41,000


We dont have any loans or credit cards.

The major outlay is proably fuel costs for my car which costs £200+
per month to travel to work.

There is a possibilty of being able to work from home for a few days
a week, once we buy a place and I can arrange a dedicated office in it.

We are on the Housing Association list for Shared oWnership and
Open Market Homebuy. However recent research on here seems to strongly
advise agianst these schemes, which I cant understand, as surely if
the market heads for a great fall, the damaged is halved between you
and the Association?

ALso renting seems such a waste of money that we could be saving
towards a deposit.


As many other people in this situation are finding, it is
incredibly frustrating to find the right moment to make a
move.

We are very eager to get a place of our own and start a family
together.


Having known people close to us to have gone through repossession
in the 90s we are eager not to go through a similar experience,
and would like to get a mortgage and place that will allow
flexibility in possibllity intrest rate rises.

One other factor is that as we plan to start a family over the
next year or so, sensibly we should base a morgage on my sole
earnings.

What are we likely to be able to realisticly afford and safely?

Also, for those who have got a mortgage and are due to have a baby
soon, how do/have you been managing?

Big thanks in advance!

Jorgan_2

In my opinion, you need a much bigger deposit than £5k. You should be aiming for 10-20% deposit. What does a two bedroom property in your area cost.

lostinrates

Things are so hugely variable that I hesitate to draw comparison, but with me not earning DH brings home about what you do and we are struggling to find rents we can pay, let alone mortgage repayments in the S/E. With me not in work now might seem like a great time to start the fam ily we want so very badly but we just don't think we are financially secure enough in today's climate, let alone in tomorrow's potentially worse one!

I really hope you can make the sums work for you! Good luck!

izzybusy23

Can I just ask, whats the rush??? Seriously, I personally wouldn't even consider buying now or in 24 months time because things are looking really really bleak for the economy. If you don't read up on the economy then you won't realise what is about to hit us.

My advice to you is go and read up on everything that is happening, not here in the UK, but further afield.. it really is quite worrying what is happening across the pond.

Like somebody mentioned before.. when the recession/depression hits, houses will be the least worry on your mind.

Edited to say, me and DH earn a little over what you do and similar ages.. and I would not think of buying without at least a 30% deposit.. and thats factoring in a 30% crash!!!

teabelly

If you earn 41k between you and can only save £5k then you can't afford to buy unless you saved that in the last few months. As your fiance is 33 odd you don't have that much time if you want a family so you either buy now, rent somewhere suitable now or forget about children altogether On your single salary you are looking at somewhere around 100-110k realistically. Look at minimum of 10% deposit. House price falls don't matter one bit if you aren't forced to sell. Make sure you have enough spare cash to cover unforseen events such as redundancy or illness etc. Buy somewhere that will last you 5 years if you choose to buy. If you have put off having a family due to waiting for the right time then you could wait forever and miss that boat entirely.

In your shoes I think renting a suitable home is probably the best thing to do as unless you are somewhere cheap you'd be stretching yourself when you are starting a family and babies are phenomenal money pits! Renting isn't dead money if you see it as money in exchange for the use of a house. You don't have to maintain it, you just live in it.

mariagti

hi,

Im in the same boat as you but me and OH are only 24 and have much lower wages than yourselfs. We have a £10,000 deposit saved so far, and dont think thats enough we're hoping to have at least £20,000 before we buy a place of our own.

I agree that £5,000 isnt very much, you would have to take out a huge mortgage. Your salarys are good, and living at home with no debt surely you could saves tones more?

pinkshoes

As others have said, you want AT LEAST a 10% deposit!! If you've only saved £5k, and you live with your parents, then that's not a good sign of your financial ability... how will you cope with a child AND a mortgage??

If you're looking to buy a home that you're wanting to stay in for a long time (5+ years, perhaps more), then the current threat of price drops shouldn't matter. I'd be more concerned about economic recession and loosing jobs!! My parents bought in the late 80s peak at around £80k, then the market crashed... but they bought a 5 bed detached house that they now still live in, and the neighbour sold theirs last year for £365k... so as you can see, a crash only affects those who are in it for a profit, or will need to sell up in a few years time.

Your OHs biological clock is ticking, so rent your own place, have a baby, save some money (if you can) and THEN think about buying later on.

macaque_2

Mickm

You wrote:

ALso renting seems such a waste of money that we could be saving
towards a deposit.

Wrong! Rent is payment for a service. If you didn't rent you would have to borrow money to buy a property. The repayments on the loan is money down the drain in flat property market. In a falling market you are borrowing money to lose money.

In the current market conditions renting represents payment for a service and insurance against holding a depreciating asset.

barnaby-bear

pinkshoes wrote: »

As others have said, you want AT LEAST a 10% deposit!! If you've only saved £5k, and you live with your parents, then that's not a good sign of your financial ability... how will you cope with a child AND a mortgage??

Yeah I thought that on £41k living at home for 7 years - £5k saving suggests it might be a good idea to look at the budget. How will you cope with a drop of income if only one working/paying childcare. Getting a mortgage on a double income then tryign to pay it on a single income isn't easy. Buying fees / furniture / stamp duty likely to take most of the £5k and it's hard to find a decent interest rate without a deposit of 90%

MissEyre

teabelly wrote: »

If you earn 41k between you and can only save £5k then you can't afford to buy unless you saved that in the last few months. As your fiance is 33 odd you don't have that much time if you want a family so you either buy now, rent somewhere suitable now or forget about children altogether

While I agree that you should be saving a larger deposit, and that doing so will give you a better idea about where house prices are going, I have to challenge the idea that 33 is the end of the road as far as children are concerned-as long as there are no medical complications, I can't see that they will need to rush quite as much as you are suggesting

teabelly

33 isn't the end of the road I know but it is just the older you get the more rocky the road becomes If you really want children then it is no point putting it off as you could then find you can't and which leads to misery for all concerned and it seems wise to avoid misery whenever possible!