Are we in a good position?

BruTamUK_2

We've just pulled out of buying a house one day before exchange. (I know we are horrible people).
We've sold our house for nearly the asking price £147,000. (3 bed semi). It leaves us with £60,000 deposit towards our next house.
We basically got scared at the last minute and with the current market didn't want to be paying top price for a 3 bed detached £200,000.
We're going to be homeless in a weeks time but fortunately (or maybe unfortunately) we can live with my parents for the foreseable future.

As we see it we have 3 options:
1. Go and buy a house now, get settled and don't worry about what may happen.
2. Stay with my parents rent free! Saving like mad until it puts a strain on our marriage and my wife leaves me!!!!
3. Rent now, dont save as much and look to buy in maybe 6-12 months time.

Realistically, do we stand to make a big saving if we wait? Could that £200,000 house (not the one we've pulled out of) be worth a lot less in 6-12 months time?
As I see it, prices will not be going up in the near future, so we dont stand to lose if we decide to wait.
We have a mortgage offer which lasts until October which allows us to buy up to the value of £200,000.
Any opinions?
Bruce.

TD5

If it were me, Option 2 sounds appealing. Failing that, the interest you'll earn on the 60k will help offset some of the rent anyway.

Good Luck

Captain_Mainwaring_2

Well you should make about £300 a month from your "investment" - I'd tend to sit back and wait. I personally wouldn't live with family but ...

I wouldn't buy, maybe rent, even if costs the same as your old mortgage, you still are immune to a hit because of the proce drop challenge.

Much too dodgy to buy, particularly at that level. Take a deep breath and stay with the inlaw's - you can treat yourself to a damned good holiday (and them too, just in a different place) out of what you save/ don't lose.

PasturesNew

3. But look to buy in 18-24 months' time.

Looking at 2 years (the way I see it might happen)
Should be able to save £10k off that price/year (conservatively)
Your £60k savings will gain 5% after tax, so £6k gained
Save the difference between your rent and what mortgage would have been (say £200/month conservatively) or £5k in 2 years.

So in 2 years:
House will cost £180k
Savings will be £60+6+5=£71k
New mortgage will be £109k

hostman

Did you try negotiating further on the house purchase before pulling out?

It may have been worthwhile demanding 30k off, citing deteriorating market conditions or you'll pull out.

House prices are falling, that much is clear. What isn't clear is the extent to which they will fall. The Government believes prices are going to fall 10% at best over the next year. You only have to look at basic figures on the state of economy to quickly realise it could be a very very long time until prices reach the peaks of last year.

In 3 years that 200k house could well be worth 100k, in the worst case scenario. In terms of affordability it should be 100k ...

LondonDiva

I hope that you'll be paying some sort of keep to your parents, rather than 'rent free'. You will after all be increasing their outgoings.

BruTamUK_2

The guy wouldn't budge on his selling price. Not really bothered anyway now. Hadn't fallen in love with the place.

2 years seems a long time. Definately wont be with the parents that long!

Were off on holiday for a month in August. Planning on staying with the parents until then and when we get back, take a look at the current situation. If prices have'nt dropped much by then, but they still look like doing in the future, we will rent.

Its a shame we couldn't survive longer with the parents. We'll be saving over £2000 per month!

BruTamUK_2

LondonDiva wrote: »

I hope that you'll be paying some sort of keep to your parents, rather than 'rent free'. You will after all be increasing their outgoings.

Maybe £10 per week then;)

Captain_Mainwaring_2

LondonDiva wrote: »

I hope that you'll be paying some sort of keep to your parents, rather than 'rent free'. You will after all be increasing their outgoings.

And I hope he has changed his underpants and cleaned his teeth too.