| House Advice 12:11 - Aug 19 with 2414 views | Swailsey |
Hey TWTD,
There's been a few of these threads I know, but looking for some advice here.
I am a first-time buyer, looking to buy a property on my own.
I've just updated my AIP and obviously the rates are significantly higher than they were when I last did this (approx. 6 months ago).
Unlike 6 months ago, I am now in a position to buy, looking to put down 10%. However, given that the rates are so high - is now the best time?
I know it isn't an exact science - my logic is that if I can afford it now, and I get a fixed 5 year, then that's all I should worry about. I'm not looking to 'play the stocks' with it. If the rates drop and I could have had it cheaper, so be it. I just want a home, some security and to kick-start the next part of my life. But I'm trying to temper that excitement with pragmatism.
With the huge caveat that most of you aren't mortgage advisors, does anyone have any opinion on this? Are you currently buying? Would you suggest I park it, or are they only going to increase?
Also, I am aware that this may come across as a bit tone-deaf, since a lot of people are struggling at the moment. So I apologise if it does comes across that way.
Thanks. [Post edited 19 Aug 2022 12:12]
|  |
| Who said: "Colin Healy made Cesc Fabregas look like Colin Healy"? | We miss you TLA |
| |  |
| House Advice on 12:13 - Aug 19 with 2113 views | hype313 |
Rates will be going up month after month, so if you are keen get a AIP sharpish. |  |
| |
| House Advice on 12:18 - Aug 19 with 2086 views | BlueandTruesince82 |
There is a lot more room for rates to go up still rather than down.
No one knows but ATM it looks like up is where they are headed.
I've just locked into a 5yr fixed on my remortgage bonuses whilst I'd save a bit if they drop, it could cost me much more if they keep going up. |  |
| |
| House Advice on 12:48 - Aug 19 with 2017 views | Parky |
If you’ve found a house you want to buy and can afford it, you’d be silly not go to for it, in my non-professional opinion.
I know people that have been looking for houses for almost 2 years, with no luck of finding what they want. |  | | |
| House Advice on 13:26 - Aug 19 with 1953 views | Sarge |
I’m currently buying. (offer accepted, process underway) We applied for a mortgage on the last day before it was withdrawn from the market due to the impeding interest rate rise so locked in at a 5 year fixed rate. I think rates are only going to go up in the short term so unless you’re willing to wait 3+ years (and even then there’s no guarantee) then in my non-professional opinion you should probably go for it if you can afford it now. | | | |
| House Advice on 13:27 - Aug 19 with 1947 views | Daninthecampo |
Up until last December and the joys of Brexit i've been a mortgage adviser for 20 years. Rates are going to definitely keep rising. Can you afford your mortgage in 5 years if the rates are 2-3% higher?
My bigggest consideration is at 90% you don't have much equity, as the rates rise and the recession kicks in we could easily see a 10-20% price drop. This could leave you in negative equity which isn't an issue if you have no plans to move. But if you wait for the drop you could put down a much bigger deposit on a cheaper house
I personally would not buy now [Post edited 19 Aug 2022 13:28]
| | | |
| House Advice on 13:32 - Aug 19 with 1915 views | gordon |
Definitely go for it, interest rates will only go up - having said that if it's relatively tight, don't aim for properties where there's likely to be bidding wars - depends on the area (so this might not be possible) but casually have a look at at least one or two properties that have been stuck on the market for a while, chat to the estate agent about what might realistically be accepted - then always keep that option in the back of your mind when looking at 'hotter' properties.
Other thing as a first time buyer, is don't think too much about the actual value of the house (this can be daunting - and going round thinking 'is this really worth £xxx,xxx' is pretty meaningless) - just think in terms of the consequence for deposit, monthly payments, and cash left over. |  | | |
| House Advice on 13:36 - Aug 19 with 1896 views | blueasfook |
| House Advice on 13:27 - Aug 19 by Daninthecampo |
Up until last December and the joys of Brexit i've been a mortgage adviser for 20 years. Rates are going to definitely keep rising. Can you afford your mortgage in 5 years if the rates are 2-3% higher?
My bigggest consideration is at 90% you don't have much equity, as the rates rise and the recession kicks in we could easily see a 10-20% price drop. This could leave you in negative equity which isn't an issue if you have no plans to move. But if you wait for the drop you could put down a much bigger deposit on a cheaper house
I personally would not buy now [Post edited 19 Aug 2022 13:28]
|
Agree with this. I would wait until the predicted recession hits and you will see a good drop in prices hopefully and be able to snap up a property that may be out of your price range at the moment. Will be more of a buyer's market. [Post edited 19 Aug 2022 13:36]
|  |
| |
| House Advice on 13:39 - Aug 19 with 1875 views | ArnoldMoorhen |
| House Advice on 13:27 - Aug 19 by Daninthecampo |
Up until last December and the joys of Brexit i've been a mortgage adviser for 20 years. Rates are going to definitely keep rising. Can you afford your mortgage in 5 years if the rates are 2-3% higher?
My bigggest consideration is at 90% you don't have much equity, as the rates rise and the recession kicks in we could easily see a 10-20% price drop. This could leave you in negative equity which isn't an issue if you have no plans to move. But if you wait for the drop you could put down a much bigger deposit on a cheaper house
I personally would not buy now [Post edited 19 Aug 2022 13:28]
|
I am not a financial advisor and this is not financial advice.
If rates are 2 to 3% higher in 5 years, and inflation has been anything like it is currently, and the OP has wage rises closer to in-line with inflation (and possibly promotions in a 5 year period) then their salary will rise by much more than the rise in mortgage payments.
We need to see even the current rates after the recent rise as a historical low point. Anyone who can over-pay without penalty during the next few years, even if only by a small amount each month, will see the benefit.
The key question for the OP is: how secure is your job, and how transferable are your skills and experience to a role paid similarly, should you lose it?
Every month the OP doesn't buy is a month's rent. Deduct that cost from any potential rate rise costs, as well. And rents will go up if inflation continues to peak and interest rates (and therefore housing provision costs, as most rented properties are mortgaged) continue to go up.
Buy as soon as you can, pay it off as quickly as you can. | | | |
Login to get fewer ads
| House Advice on 15:58 - Aug 19 with 1775 views | Pinewoodblue |
If you don’t make that first step now you will presumably still be renting. The one thing you can guarantee is rents are likely to rise pm probably inline with inflation, or worse. |  |
| |
| House Advice on 16:09 - Aug 19 with 1761 views | clive_baker |
I am not a financial advisor and this is not financial advice.
My tuppence:
- A dip in the market is entirely feasible / likely. I can't see it being as extreme as 20% in a month of Sunday's, but some sort of dip as costs increase is probable IMO. August may already be reflecting that, but its a notoriously quiet month so the reads in the Autumn will be more telling.
- Despite that, I wouldn't let it put me off personally, if you're buying something you can see yourself in for a while.
- Think about the things you have some influence over, and control th controllables ie. the property you buy and price you pay. You can't do anything about the wider market but you can buy a place that's futureproofed for you enough to ride out any dip, you can also make sure you're paying a fair price. You might even get a good price as uncertainty kicks in. There are people out there that need or want to sell for all manner of reasons, and are probably advertising at eye watering gains vs. what they might've paid so don't be afraid of making an offer, especially if it's been on the market a while. Property is only worth what someone is prepared to pay. Having multiple options strengthens your position in this respect. Also you're a valuable buyer as you're free of a chain.
- Re. interest rates, they're unlikely to come down anytime soon so get your best rate locked in as soon as you can, get yourself in the system. Not 'playing the stocks' is sensible, if you're confident you can afford the repayments and you want to live there then don't overthink it I say. |  |
| |
| House Advice on 16:17 - Aug 19 with 1740 views | Joey_Joe_Joe_Junior |
Stash the cash
Wait 12/18/24 months for increased inventory and price cuts as people have less money to spend/buy |  | | |
| House Advice on 16:27 - Aug 19 with 1712 views | mutters |
| House Advice on 13:27 - Aug 19 by Daninthecampo |
Up until last December and the joys of Brexit i've been a mortgage adviser for 20 years. Rates are going to definitely keep rising. Can you afford your mortgage in 5 years if the rates are 2-3% higher?
My bigggest consideration is at 90% you don't have much equity, as the rates rise and the recession kicks in we could easily see a 10-20% price drop. This could leave you in negative equity which isn't an issue if you have no plans to move. But if you wait for the drop you could put down a much bigger deposit on a cheaper house
I personally would not buy now [Post edited 19 Aug 2022 13:28]
|
It's the classic line that it all depends on circumstances.
If I had the choice of buying now or waiting another three years, spending money on rent etc then I would look to buy now. But feeling says that IRs will continue to rise, and there may be a drop in prices but it's a fools game waiting for the perfect time to enter the housing market. Weve been due a major crash for nearly 20+ years, the blip in 2008 aside.
All depends on plans, strategy etc. I took a 5 year fixed deal in Feb (though the rate was locked in from August 2021 which was when my mortgage application was accepted). I'd do the same now of I knew I wasn't planning on moving in that time |  |
| |
| House Advice on 16:33 - Aug 19 with 1702 views | playthewayyourfacing |
Certainly not an FA
Currently a huge shortage of house stock which will keep housing prices pretty stable, forecast to drop by around 5% in 2023 but they are around 7% higher this year. I can also only see higher interest rates for a time. I’d not put anyone off buying right now but do your maths as you’ll have monthly bills that soon add up.
5 year mortgage at least gives you comfort know that you’ll have no nasty surprises if rates do rise rapidly.
Good luck | | | |
| House Advice on 16:48 - Aug 19 with 1618 views | Ryorry |
Just an aside to what looks like a multitude of good advice already -
I've just renewed the buildings insurance on my house, & queried why it's gone up over 15% despite no claims or changes in the past year. Answer - because the re-build cost has shot up owing to the huge price increases of basic building materials - stone, brick, wood etc. And bear in mind that it's becoming increasingly difficult to source some things, supply lines have obviously been hit by things like the pandemic, Ukraine, BrexSh1t.
Personally, I wouldn't want to be taking on anything that needs a lot of work atm, might mean big headaches & loadsa stress (but everyone's different & you may have the DIY skills to circumvent problems). |  |
| |
| House Advice on 18:00 - Aug 19 with 1503 views | factual_blue |
I think Keno can put you in touch with a local mortgage broker. |  |
| |
| House Advice on 19:10 - Aug 19 with 1404 views | PrideOfTheEast |
Get a fixed deal and go for it. Good luck - you’ve thought about it and clearly know where you stand. | | | |
| House Advice on 23:49 - Aug 19 with 1244 views | Swailsey |
Many thanks to all of you. Some really helpful stuff to digest here. Appreciated. | |
| Who said: "Colin Healy made Cesc Fabregas look like Colin Healy"? | We miss you TLA |
| |
| House Advice on 01:15 - Aug 20 with 1198 views | N2_Blue |
| House Advice on 16:17 - Aug 19 by Joey_Joe_Joe_Junior |
Stash the cash
Wait 12/18/24 months for increased inventory and price cuts as people have less money to spend/buy |
Worst advice ever, you really are clueless |  |
| |
| House Advice on 07:29 - Aug 20 with 1097 views | The_Flashing_Smile |
I completed yesterday and the consensus on here when I asked a similar question a while ago was if you can afford it, go for it now, don't wait. I'm glad I took that advice as we locked in a decent 5 year fixed deal before the rates shot up. As someone above has said, rental rates are going to go through the roof as well, so why rent for any longer than you have to when that money's all going into someone else's coffers?
There were many predictions of house prices dropping but Lady Dollers told me about an article yesterday (not sure where) that said they're rising again (as well as rental prices). |  |
| Trust the process. Trust Phil. |
| |
| House Advice on 08:54 - Aug 20 with 1021 views | fab_lover |
Right, it is never, ever the "right time to buy". Asking the question you've asked, there will never ever be consensus in the answers because, due to lack of crystal balls that work, everyone's interpretation of the future is different.
So, the only questions to ask are:
- can I afford it ? If I get a 5 year fixed now, what does my budget look like once everything is paid for ?
- how long am I intending to live there for ? If negative equity hit and I needed to live in the house for longer than planned, would that be an issue ?
- if something goes wrong with the house that needs addressing, how able am I to do that ?
Ultimately, you are always better off buying than renting. In the long term, it's always a better decision. However first and foremost it's a home, not an investment.
Personally, I think it's a good time to buy as inflation is much higher than interest rates, so lock into a good deal now and the % of the mortgage payment of your take home pay will decrease as wages go up.
Good luck. |  | | |
| House Advice on 09:53 - Aug 20 with 974 views | fabian_illness |
I bought my first house at 20 years old.
I didn't know if it was the right thing to do or not, but my old man sat me down and briefly ran through a few things.
Will the house be worth more in 25 years time? If yes, good investment.
Are the repayments cheaper than renting? If yes, that's good news.
He also told me there will never be the perfect time time to buy a house as you can always find reasons not to. If you can afford one, buy one. It will make sense long term.
All rather simplistic, but he was right. |  | | |
| House Advice on 11:05 - Aug 20 with 930 views | Swailsey |
| House Advice on 08:54 - Aug 20 by fab_lover |
Right, it is never, ever the "right time to buy". Asking the question you've asked, there will never ever be consensus in the answers because, due to lack of crystal balls that work, everyone's interpretation of the future is different.
So, the only questions to ask are:
- can I afford it ? If I get a 5 year fixed now, what does my budget look like once everything is paid for ?
- how long am I intending to live there for ? If negative equity hit and I needed to live in the house for longer than planned, would that be an issue ?
- if something goes wrong with the house that needs addressing, how able am I to do that ?
Ultimately, you are always better off buying than renting. In the long term, it's always a better decision. However first and foremost it's a home, not an investment.
Personally, I think it's a good time to buy as inflation is much higher than interest rates, so lock into a good deal now and the % of the mortgage payment of your take home pay will decrease as wages go up.
Good luck. |
Thank you, and again to all.
To answer some of the common questions:
Not looking for a short term investment - looking for a long-term stay (15+ years).
Comfortable that all being well, salary will stay the same - in long-term work.
If the worst happens, I (hopefully!) have accumulated transferrable skills in the last 8 years.
Budget for 5+ years is ok with some left over for ‘rainy day”. [Post edited 20 Aug 2022 11:07]
| |
| Who said: "Colin Healy made Cesc Fabregas look like Colin Healy"? | We miss you TLA |
| |
| House Advice on 11:08 - Aug 20 with 918 views | Funge |
| House Advice on 07:29 - Aug 20 by The_Flashing_Smile |
I completed yesterday and the consensus on here when I asked a similar question a while ago was if you can afford it, go for it now, don't wait. I'm glad I took that advice as we locked in a decent 5 year fixed deal before the rates shot up. As someone above has said, rental rates are going to go through the roof as well, so why rent for any longer than you have to when that money's all going into someone else's coffers?
There were many predictions of house prices dropping but Lady Dollers told me about an article yesterday (not sure where) that said they're rising again (as well as rental prices). |
Congrats Dollers, that's good news.
Whole process is a colossal ballache, innit. |  | | |
| House Advice on 11:11 - Aug 20 with 911 views | Funge |
Swailesy - if you're planning to live in said house for a few years, then there's a strong argument for just going for it, getting a 5 year mortgage and seeing where you are then.
Marriage/ jobs/ kids etc, in my eyes, rather more likely to have a palpable effect on your life than the mortgage interest rate.
Good luck mate. | | | |
| |
By continuing to use the site, you agree to our use of cookies and to abide by our Terms and Conditions.
