is it a wise idea to buy now with Savings

skyjumper

hi all,

i have got some savings accumulated for years. plan was to buy a home to live. i'm in a position to buy a 150k home which my family like and was planning to put down a deposit on it.

i have rented all my life and wanted to buy at some point. have saved like crazy -changing jobs, working Self-employed, Ltd Company- you name it i may have done it.

my question is

1.I have got Mortgage in Principle Agreed from the lenders (5.79% fixed until 2011), but i'm in a position to buy the house with my savings. i may not need any Mortgage at all.Is this a good idea in this time. should i just get a mortgage and keep the savings in a high interest account- currently with Kaupthing Edge and Ice save and some as ISA's over the years.

can anyone advice or suggest on the best options

setmefree2

In my humble opinion house prices will probably fall quite abit yet. However, interest rates may well rise:rolleyes: Difficult choice. If it was me I'd probably wait.

skyjumper

thanks setmefree2

just to add- never thought about offset mortgages- not sure if that's any relevant to my case

getmore4less

skyjumper wrote: »

hi all,

i have got some savings accumulated for years. plan was to buy a home to live. i'm in a position to buy a 150k home which my family like and was planning to put down a deposit on it.

i have rented all my life and wanted to buy at some point. have saved like crazy -changing jobs, working Self-employed, Ltd Company- you name it i may have done it.

my question is

1.I have got Mortgage in Principle Agreed from the lenders (5.79% fixed until 2011), but i'm in a position to buy the house with my savings. i may not need any Mortgage at all.Is this a good idea in this time. should i just get a mortgage and keep the savings in a high interest account- currently with Kaupthing Edge and Ice save and some as ISA's over the years.

can anyone advice or suggest on the best options

There are a number of things going on here.

The first is the rent own, it may be time to do this and if you have found the right place then why not, owning does involve a set of new expences no landlord to call when the boiler breaks etc you also lose your mobility.

Prices, thats a call you have to make they might(will) go down but this might be the place and another may not come along for a while.

Now the money, cashing in all the saving could leave you in a position not to be able to handle loss of income or a big bills.

You lose the ISA tax status, the upside is you are mortgage(debt) free.

Mortgage if you can borrow cheaper than your current interest rates then why not, there are setup costs but you get piece of mind havving a cash pot to call on if needed.

Offsets now these mean you reduce your mortgage interest but lose savings interest so might be break even or save a bit. One advantage is you can offset your ISAs(don't need to cash them in) so the setup costs might be worth it, effectivly mortgage free but preserves the ISA you continue to build up saving and have this pot of instant access money at a not to bad a rate to call on.

Also if you keep this money on interets only and make sure the loan is portable you have large pool of money to call on if you wanted to move up market. Remember moving costs a lot more when you own houses so might be a good isea to get one now that will give you good living for some time.

I would seriously lookathe cost of setting up an offset mortgage with the ISAs you have and try to decide if those setup costs are worth it.