[Kev]

Well, looks like I will be moving out of my parents house in the next month or two. I'm a little bit undecided about whether I should rent or buy property? I Don't really have the funds to buy a mortgage but I really hate the idea of renting as it's basically 'dead' money that you will never see again. Of course, I'd only have to pay a little extra a month for mortgage and the money would be an investment, rather than to my so-called landlord.

Which do you guys think is the better option?

[jbjhand]

if you can afford it kev i would buy rather than rent like you say it is "dead" money. if you are buying with someone else then make sure you get the right tennancy agreement.

[Jim Bon Jovi]

buying is always better off and you're better gettign on the ladder as quickly as possible.

if you're throwing away X hundred quid on rent a month in makes saving up for a downpayment on a mortgage much harder.

What you need is a desperate chick quick who will move in with you within a month and also pay her share of it. You pay half the mortgage, are still legally the owner and have a free maid

failing that you could look into sharing a mortgage with a mate or renting out a spare room.

[daveyboy]

Here is my suggested thought process.

1. What is the cheapest town I would consider living in?
2. In that town, how much are one bedroom starter homes going for?
3. Is that price more than 4 times my salary?

If yes........ you probably have no choice but to rent

If No

4. Go and get some mortgage quotations from the banks and see what your options are. If you don't have any money saved up, look at 100 percent mortgages, but remember, you will pay more for these with higher interest rates. Don't forget you may have to factor in stamp duty and start up costs, appliances furniture etc.

5. Consider the quotations and decide whether or not you will be able to comfortably afford the repayments. Remember, mortgages can go up unless you are on a fixed rate.

Oh, and steer well clear from the Abbey National, and make sure you consult the Nationwide. They have been excellent to me.

Hope this helps.

[ponrauil]

The thing is buying a house (or a flat) you won't pay just the mortgage. You'll have to pay more taxes (if it 's the same in the UK as it is in France or Canada), and for maintenance...
Unless it's in a place where you are the sure the prices will go up quite fast in the next few years, I'd wait to have substantial funds before buying.

Also when you rent you can still save money and you're more free to move when you feel like it.


Ponrauil

[TheseDays2005]

Originally Posted by ponrauil

The thing is buying a house (or a flat) you won't pay just the mortgage. You'll have to pay more taxes (if it 's the same in the UK as it is in France or Canada), and for maintenance...
Unless it's in a place where you are the sure the prices will go up quite fast in the next few years, I'd wait to have substantial funds before buying.

Also when you rent you can still save money and you're more free to move when you feel like it.


Ponrauil

In Holland we get money back from the taxes when having a house, this is based on intrest paying for the house, and tax paid from you gross salary.
For instant, my interest (of course payable) for house is about 900eur a month, I get 350 eur back every month from the tax-authorities (this is exluding what I get back for health-care), so I end up paying about 550 for my house (exluding down-payments & insurrances)
The more income, the more you will get back. However that is likely to be changed....

[daveyboy]

Originally Posted by ponrauil

I'd wait to have substantial funds before buying.

Why? The chances of going in to negative equity in the UK are very slim these days.

Even if your house decreases in value (very unlikely in the UK), you're still better off than renting. If your life is stable and you know what you will be doing in the next 2-3 years, renting would be crazy and dead money. Of course there will be other bills to pay, but despite the scare stories in the press, banks will never lend you more than you can afford.

If Kev is looking for a long term strategy to eventually have a nice family house in a nice area, buying now will make him more money than he could ever save, which will in turn put him in a great position 3, 5 and 10 years down the line.

Don't forget, if you do want to go travelling or whatever you can always rent your place out for a year.

[ponrauil]

Originally Posted by daveyboy

Why? The chances of going in to negative equity in the UK are very slim these days.

I just see mortgages as a cross to bear. The shorter the better.


Ponrauil

[TheseDays2005]

Originally Posted by daveyboy

Why? The chances of going in to negative equity in the UK are very slim these days.

Even if your house decreases in value (very unlikely in the UK), you're still better off than renting. If your life is stable and you know what you will be doing in the next 2-3 years, renting would be crazy and dead money. Of course there will be other bills to pay, but despite the scare stories in the press, banks will never lend you more than you can afford.

If Kev is looking for a long term strategy to eventually have a nice family house in a nice area, buying now will make him more money than he could ever save, which will in turn put him in a great position 3, 5 and 10 years down the line.

Don't forget, if you do want to go travelling or whatever you can always rent your place out for a year.

isn't there cost on the purchase-price in the UK?
For example, if I buy a house over here for let's say 250k, there are about 10% costs excluded, so I end up paying 275K.
So that means the price of the house I bought have to raise 10% of the purchase-price before I can make money of it

[daveyboy]

As a first time buyer paying under 250,000 pounds for a house he would have to pay 1 percent of the purchase price plus solicitors fees of around 400 pounds. If he didn't make that in the first six months he'd be very very unlucky.