Am I nuts (buying a house)

We’re going to view a house for sale tomorrow
If it’s a good one for us we will be taking out a 45% of value mortgage fixed for 5 years.

In the current economic climate and with interest rates on the rise am i nuts?

The housing market locally appears to be slowing recently but prices haven’t started dropping yet.

The worry is if we wait for prices to drop by that time the banks could stop lending or the interest gets so high the repayments would become unaffordable.

 

Get in quick with a fixed deal for a few years if you can, Would be my guess..

 

If your budget can cope with the Bank of England fighting with the rapid succession of Chancellors of the Exchequer over the next year and winding up interest rates to close to inflation levels, it will probably work. Go fixed rate (not that I expect the deals will be good)

On the other hand, rents will go up if interest rates go higher so that the owner still makes a profit and can afford some maintenance after they have paid the interest on their mortgages, so you should be better off buying.

 

The press today makes for grim reading banks already withdrawing mortgage deals, no doubt they are struggling to forecast what rates they should be using.

Good luck.

 

My wife is a mortgage advisor and the advice is get in there quick and fix it for as long as poss , rates are going up hourly and lenders are dropping like flies!

 

Buy it, it'll be your home for the long term, it's not just an investment. We bought at the start of a falling market (twice ), broke even after renovating the first and made a stupid profit on the second one despite it sitting at the same price for the first 10 years. It's a long game... well it's not even a game because you get to live in it. With a 45% deposit I bet your repayments will be less than your rent?

 

That was my thinking that there’s a small window of opportunity
So it’s reassuring to know that a mortgage advisor is saying the same.

 

Yes the repayments at todays mortgage rates would put the monthly repayments less than our rent payments.
We were hoping to up the payments so it would be paid of sooner.
It also should allow us to lower our living costs as it will be better insulated compared to the house we’re in
Mid terrace ex council house with double glazing compared to a semi detached stone cottage with single glazing
Less travelling as it’s in a town and Mrs para can walk to work
Also no heating oil or coal to buy.

It’s all just musing at the moment though as the house may be crap
It’s far cheaper than any other three bed in the same area
It’s been on the market for two months and it was reduced by 5 grand two weeks ago.
A year ago
Other houses have been selling for 20 k above asking price the day they are advertised without people even viewing.

So I’m wondering why this one isn’t selling

 

Neighbours?
Scrap yard over the back fence?
Sewage works up wind?
If the neighbouring houses are still council owned you never know what scallywags you might end up with next door. Sorry to be "ist" but it happens. If your neighbours are private owned they still might be arse but it's less likely that they'll stay up all night playing E music and vomiting over the fence into your garden. lol

 

Good luck, @paradox, you will only know if it's right time to buy with the benefit of hindsight, but it will be your home and that's what's important

 

Make sure you check the house and area (neighbours) carefully and ask questions to the agent/owners first. If it's not this one find another and go for it, you will kick yourself for years if you don't.

 

Even if this one isn't for you, if you can hang on to your mortgage offer you'll be in a good position for other houses as I reckon it'll turn into a buyers market.

 

I think so too, but sellers are often reluctant to give up their perceived gains so any downturn can take years. Also it's so hard to get a mortgage now compared to other crashes that I doubt there'll be a glut of people having to sell up. I predict stagnancy as people just sit in what they have.

 

We bought our first house in ‘92. We struggled proper.
I was earning £6800 a year and the wife was earning £2300.
House cost us £53,000. We were living out of bin’s because of all the money we spent went on building materials.
Did a lot of work myself, after work.My old man always used to tell me…”There’s always money in bricks and mortar”.
Hope that helps.

 

From the house point of view you seem to like it. From the economic view you seem to think it stacks up.
Yes question why it hasn’t sold,
1.it was way overpriced to start with
2. Survey problems
3. Paperwork on previous sales revealed a problem, could be a neighbour dispute , a right of way dispute, etc.

Ask the selling agent
1 how many agreed sales have they had
2. How many times have the sellers solicitors sent contract documentation out to a buyers solicitor.
3. How many buyers have commissioned a survey.
4. How many buyers have withdrawn following a survey.

if favourable replies are received to the above and a previous buyer has withdrawn for reasons other than survey , you can offer to purchase a copy of the former buyers survey. You can not rely on it as it was not commissioned for you. But a former buyer is often pleased to sell a copy at ,say 25% of cost.
If agent is wary or unhelpful, then for a property that has stuck on the market ….there seems something strange.

 

And visit it and the area several times and at different times. That way you see the gang of yoofs sitting on the street corner taking drugs and drinking, the parking situation and whether the neighbour plays D&B at 3 in the morning or conversely what a nice quiet friendly neighborhood it is with good parking etc.

 

I would say go for it. Is it possible to work out the mortgage payments if the interest rates hit double figures? I bought a house with a mate in the 80’s when interest rates rocketed. At the highest I only had £10/week left out of my wages as we weren’t on fixed rate.

That said for years after (I sold my share when I moved away) I couldn’t get a mortgage as no savings and too low income. That was very annoying as I was paying much more in rent than mortgage payments would have been.

I reckon go for it, but as has been said check why the house price has dropped, any neighbours disputes, knotweed in the garden, asbestos etc.

Tho Sarah’s niece and boyfriend are trying to buy a house and the local estate agents seem to be doing their best to bankrupt everyone. Because demand is outstripping supply they are making potential buyers keep upping their bids, and then still going to a sealed final bid. I think it’s shocking and complete greed as houses are going way over the asking price. The last house they bid on went up about £20k and then the estate agent told them the other bidder had won as the vendor only wanted to sell to first time buyers. So they had used the niece and partner to bid with no intention to sell them to them, just to get more money out of the other couple, and land them with more debt

 

that’s excellent advice. If your gut feeling is that something might be amiss then I’d say do a lot more digging. Believe me they won’t be afraid to ask you a gazillion questions during a purchase so don’t be afraid to ask a load yourself.

 

FTFY