Should we pull out of purchase?

Mitsouko

We agreed a sale on our house nearly 2 months ago and it seems to be going ahead OK.

A couple of weeks ago we made an offer on a house I liked (and still do) a lot, but which needs alterations to make it how we like. We got an agreement at quite a good price and we now have had the valuation done and the mortgage offer through. A potential problem came up on the survey though which we haven't had time to investigage yet.

Thing is I am starting to think maybe this is financially a bad idea. Thanks to rising house value on our current house we have a good deposit to put down (25%) but even so to get this house we are having to increase our mortgage to the max we can get, and things will be tight. I have been lookikng on the internet all weekend and people are saying about the house price crash, recession, etc, which if it happens would wipe our all our equity. Maybe we should sell to rent?

I really like that house though, it has some unique things about it, and the owners think they are practically giving it away to us (they are not, it was massively overpriced before).

I think the sensible thing would be pull out but I am so torn! Help!

country_sport

The way i look at it is this. Is it going to be your home to live your life as happy as you can or a cash cow? If you can afford it and plan for the future, interest rises, babies etc then go ahead and let all the doom and gloom go by.
Whats going on with the survey?

pinkshoes

Is this a home or an investment? If you're in it for the longterm, and can afford the mortgage (if interest rates rise, or you have kids?), then who cares what happens to prices?? It'll only be of interest if you need to sell, and if you're planning on staying put for a long time, then this won't matter.

If it isn't the house for you, then don't buy it. Or are you just looking for excuses to talk yourself out of it? Don't rush a house purchase!

Alot of the stuff in the media is just scaremongering. It really depends on your area.

If equity is more important to you than a family home, then by all means sell and rent for a while, but if it's a family home you're after, then the current lack of stability in the housing market shouldn't really be an issue.

setmefree2

The recession might be short lived. It might even have been overted. How would you feel if someone else buys the house?:rolleyes:

izzybusy23

pinkshoes wrote: »

Alot of the stuff in the media is just scaremongering..

You're having a laugh aren't you????

http://www.independent.co.uk/news/world/americas/usa-2008-the-great-depression-803095.html

OK, not UK YET, but whats to say it won't and can't happen here huh??

I woulnd't be telling people that the media are scaremongering as that could give somebody the wrong idea on what they need to do for whats best for them.

RHemmings

pinkshoes wrote: »

Is this a home or an investment? If you're in it for the longterm, and can afford the mortgage (if interest rates rise, or you have kids?), then who cares what happens to prices?? It'll only be of interest if you need to sell, and if you're planning on staying put for a long time, then this won't matter.

I keep seeing this sort of opinion, if someone can afford the mortgage, what difference does it make?

Well, if the differential between the two houses went down by £20K, which I think entirely plausible if it's a jump up the ladder, then that's £100 less per month interest to pay on the mortgage, or £130 per month repayment over 25 years. I don't know about other people, but an extra (or less) £100 a month would make a difference to my standard of living. Then there's the whole negative equity thing. And the possibility that interest rates might rise if (as predicted) inflation takes off. There are many reasons why it might "matter" if someone buys a house at the wrong price, even if they intend to live in it for a long time.

Mitsouko

Well we went to see it again at the weekend. Its empty now and it looks sort of scruffy and seems to have shrunk and there's things wrong that we never noticed before and ...... we're going to pull out. Think that's the sensible thing to do.

Just dreading telling the EA in the morning though.

carolt

Glad you've answered your own question.

Mortgaging yourself to the hilt may make sense for your dream home, particularly in a rising market.

But in a falling market, for a house you don't really like? Clearly absurd.

Best of luck with finding yourself somewhere suitable.

NB Don't put your life on hold: contrary to what country sport would suggest, babies don't actually give a damn if your house is rented or not. No reason to 'put your life on hold' if you're planning on renting in the meantime. Just enjoy the 'crash' headlines, and spend your evenings counting your deposit...

barnaby-bear

Mitsouko wrote: »

Well we went to see it again at the weekend. Its empty now and it looks sort of scruffy and seems to have shrunk and there's things wrong that we never noticed before and ...... we're going to pull out. Think that's the sensible thing to do.

Just dreading telling the EA in the morning though.

You can always tell them you had problems getting a mortgage....;) Credit crunch etc...