Should I bite the bullet and buy a house?

Question

Funny question I know- but apperently the house prices are at and all time low for 30 years.
Anyway my situation is i'm 25 and have no deposite but have a good job and good credit- this will be my first house and might beable to get a graduate mortgae, i'm thinking of asking my parents to help me out.
I thought it was a really good Idea but now I'm wondering if its better to keep renting and save up for a deposite- the only thing is when I get there the house prices will have risen. I live in an area where its really cheap to buy but I dont really see myself here in 3 years- so Do I buy a house an rent rooms or do I stay as I am and save money- what do you think?

Answer 1

Your right in many ways. There are some good rates available for 100% mortgages nowadays and also various other type of graduate mortgages etc...

The housing market is quite strong and prices are still going up, so in the time it takes to save say 5% deposit, they may have risen by more than 5%. If you had taken a 100% mortgage, by then you would have more equity than if you'd have saved the deposit.

Things are looking good for the housing market, but rates look as if they are on their way up so mortgages may get more expensive over the next year or so unless you get a fixed rate now.

At the end of the day, it's a bit like looking into a crystal ball, but look at it this way, renting means giving someone else money to live in their house!

Answer 2

Well you need a deposit to do it but you should buy a house. Prices are low at the moment but are goign to go up over the next four years. If you continue to rent it is a lot of wasted money. Could your parents loan you a deposit - if you get a good mortgage deal you should be ok. You would only need to start off with a small cheap house and then you could work your way up the property ladder. sell in four or five years and the value of whatever you have should have gone up!

Good luck!

Answer 3

If you are financially able and secure in your job take the plunge.

But don't get in over your head - research fixed rate mortgages. Also if you planning to be in an area only 3 years - I don't see the sense in sinking that kind of money into a house. It may be prices will still be low in you area at that time , or no one will want to buy in the neighborhood you are living . Then you will be stuck living in an area you desperately want to leave with limited options - renting (with all those regulations) and hoping the renter pays on time or letting the house stand empty (open to vandalism and upkeep bills until it sells).

My former neighbor has had her house on the market for 18 months. Unable to live in the one due to distance from her new location and unable to sale the other. So she is paying for two houses and going slowly broke.

Answer 4

Just buy!! It's an investment.

Rent is about the same cost as a mortgage anyway.

Keep saving whilst you're in your new house and you'll have a deposit for when you move on, plus the money you will undoubtedly make on the property.

Answer 5

if you buy a small place now that would be a starter home for someone like yourself and live there for 3 years you would have three years appreciation. if your area goes up at 5% a year then you would have 15% on the full price. You will only have a small down payment but the amount your investment grows is based on the full value.

I bought a building 8 yrs ago for 800,000. I put down 80,000. I plan to sell it this year and it has appraised for 1,600,000. the value of the building has gone up 100% or 9% a year coumpounded. My investment of 80,000 has gone up 10 fold or 1,000%... So for my 80,000 investment, I get back 800,000.
If you can afford it, do it.

Answer 6

I'm assuming you're in the UK, since we're on Yahoo.co.uk but I've seen a couple of Americans answering questions on here so maybe Yahoo answers is shared with Yahoo.com.

If you are in the UK:

I don't know where you're getting your information from, but house prices are most certainly NOT at an all time low for 30 years.

They're in fact extrememly high (record breaking highs), and rising, but the price rises are slowing.

As for advice, the general consensus is divided between those who think a price crash is impending and inevitable because prices are so high, & first time buyers are being priced out of the market; and those who think they will continue to rise for a short while, and then gradually level out.

Check out the following:

http://news.bbc.co.uk/1/hi/magazine/5188384.stm

http://news.bbc.co.uk/1/hi/business/5153140.stm

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm

http://news.bbc.co.uk/1/hi/business/4521180.stm

Answer 7

I'd go for the house- especially if you think prices will rise substantially.

I bought my first house in 2002, near the beginning of the US housing boom, when prices were low and they were just about giving away mortgages. If I had waited, and wanted to buy the same house now, I might not qualify for the mortgage- it's gone up in value almost $50k. So, I'd say, get in now so you have leverage in the future.

Answer 8

Go for it.

Buy a house/flat and rent it out. If you split it with your parents, at least you have back-up.

And if you rent it out, then the tenants are paying for the mortgage, and you may just have to top it up.

In a few years you could be ready to move into the house, and you may have a better job.

I am think of doing the same thing in a few years, I am just 4 years younger than you!

Good Luck!

Answer 9

hi there,
I'm a mortgage adviser..... i tell all my clients to bite the bullet and get a 100% mortgage, because.....
If you save for a deposit for a year (say £5000), then after the year the house has increased in value by more than the £5k, so you are back to square one.
Get 100% mortgage on an interest-only basis on a 2 year deal. After the 2 years, your house has increased in value, then use the equity growth as your deposit. hope that helps. get back to me if you want anymore advice.

Answer 10

Buy a house. I bought a house a few years ago and I am glad I did not wait. Just think of all the money you are throwing away on renting.