It really isn't. You and your girlfriend are barely earning above minimum wage and you have no deposit, add to that your huge phone bills and other outgoings. Maybe in a couple of years you could consider it.
Buying or Renting - Help needed.
- Thread starter Shep_Cobain
- Start date
It really isn't. You and your girlfriend are barely earning above minimum wage and you have no deposit, add to that your huge phone bills and other outgoings. Maybe in a couple of years you could consider it.
I still rent a flat, since 2003 or so. The rent hasn't gone up, at 800 since I moved in. I saved a pretty large amount in that time (I'm paid £60k/y, my wife too), and that allowed us to raise a 35% deposit on the property we bought recently (250k), it also mean the mortgage is one of the best one can get, and were already by now 50% paid off on it.
We put all our extra into it, or in one (offset) saving account and (offset) ISA, and we planned to continue renting the flat, since it's actually quite a good deal.. ie a lot cheaper than trying to buy a similar place, we'd have to downgrade quite a lot to continue paying 800pcm.
If you take a mortgage, just realize that roughly, every time you spend £1 on anything else, it actually costs you £1.5. Thats a very good motivation for clearing it ASAP. On the other hand, if you /can/ take a mortgage now, it's the time to do it as your saving are worth /nothing/ with the current rates, and you'd have to have saving that beat the inflation rates to even break even...
As for the OP, I just shake my head in despair. "Start a family" indeed, and teach the family good values...
We put all our extra into it, or in one (offset) saving account and (offset) ISA, and we planned to continue renting the flat, since it's actually quite a good deal.. ie a lot cheaper than trying to buy a similar place, we'd have to downgrade quite a lot to continue paying 800pcm.
If you take a mortgage, just realize that roughly, every time you spend £1 on anything else, it actually costs you £1.5. Thats a very good motivation for clearing it ASAP. On the other hand, if you /can/ take a mortgage now, it's the time to do it as your saving are worth /nothing/ with the current rates, and you'd have to have saving that beat the inflation rates to even break even...
As for the OP, I just shake my head in despair. "Start a family" indeed, and teach the family good values...
Hold fire for a bit until your new job is in the bank and your partner has found a job.
When I bought my first house I was on a low salary and was actively seeking a new job. In hindsight, I should have waited because 2 months after moving in I got a new job which then meant 3hrs commuting each day. You don't want to put your gf in that situation when she moves on to a new job.
Currently you have a combined income of less than £30k/year which is far too low to be looking to buy a house with such a meagre deposit already saved. In 1 year, all going well you should be earning over £40k/year combined which is a better position to be in but I would get all that sorted first, make sure you end up with your £26k salary and that by then your gf has landed herself a job paying £15k+
Obviously with plans to start a family it may be that renting is the best option.
When I bought my first house I was on a low salary and was actively seeking a new job. In hindsight, I should have waited because 2 months after moving in I got a new job which then meant 3hrs commuting each day. You don't want to put your gf in that situation when she moves on to a new job.
Currently you have a combined income of less than £30k/year which is far too low to be looking to buy a house with such a meagre deposit already saved. In 1 year, all going well you should be earning over £40k/year combined which is a better position to be in but I would get all that sorted first, make sure you end up with your £26k salary and that by then your gf has landed herself a job paying £15k+
Obviously with plans to start a family it may be that renting is the best option.
In years to come you'll have recovered it. A mortgage is a long term commitment.
With a proper deposit I would argue buying now is a good idea, even if you had to stretch yourself quite thin. But without 25% down you are asking for trouble in the next few years. Itll still be a good buyers market in a couple of years, there is no rush.
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If you have to stretch yourself 'quite thin' what do you do when interest rates rise?
You still should account for rate rises too - the market will likely be steady or fall slightly over next couple of years and rates likely won't go up much either over then next couple of years but a mortgage is a 20 year or so commitment. Anything can happen really, tis not a good idea to be close to the edge with something like this.