Buy now or wait (for how long)???

J

Jazzer

Guest
Hi, I’d really appreciate any views on buying a property in the current economic climate!

My partner and I have been putting off and putting off buying a property while waiting for change in government, budgets, Eurozone debt crisis/economy to settle down, etc. We have mortgage approval and would be borrowing about €240,000. We are looking for a long term home in the Dublin 7 area so if house prices go down a bit that’s not the end of the world. As I’ve just turned 50 we can only get a 15 year mortgage so would be a bit worried about putting off buying for too long as the mortgage repayment period gets shorter and also getting mortgage protection may become more difficult and expensive. There also seems to be very conflicting views as to whether interest rates will rise and by how much. We currently live between my partner’s rented apartment and my house which is too small for us and which we plan to rent out (It is near to the Mater & Temple St Hospitals and should be easy enough to rent out - has a mortgage of €100,000). We just want to move on with our lives. Both our jobs are secure and we have good credit ratings etc and savings. We have thought about renting a house for a year or so and the places we’re looking at in our preferred area are c. (€1,400 per month €16,800 pa).


Thanks in advance!
 
We don't allow speculation about house prices on askaboutmoney.

people are free to reply within that restriction.
 
What would the rent be on the 100K mortgage property, what is it's value.

What percentage deposit do you have.

Mortgage approve = good
Secure jobs = good
Not married and thinking of buying together = something that needs to be well thought out
but at your age you know what you are doing = good

What price range are you looking at, what would the rent be on it, (a way to see if a property is worth what you are willing to pay)
 
Thanks Bronte.

Rent on 100K mortgage property would be in and around €850. Value is anyone's guess, nice two-bed cottage, off NCR, walk in condition, high standard of fit out!

Deposit €60K.

Looking at properties in the range of €290,000. Rent would be in and around €1,200 to €1,400 at current values so would not cover mortgage!

Thanks
 
There will always be a reason not to buy a house, particularly when sentiment is so low. Likewise when there was always a reason to buy a house when sentiment was high. Another major disaster in Japan, a change in the US president, Middle East unrest, stock markets imploding... all lead to uncertainty during low sentiment times. During the boom none of these issues mattered!

Interest rates could go any direction - but they will move during 15 years of your mortgage. Stress test your potential payments.

At 50yrs old and looking for a long term home this house will probably be your last move (not to sound too morbid!). So, if you're happy to pay €x (and can afford to do so) to live where you want to live then I'd consider buying.

The biggest worry is that you lose money on the house but as it will be your home, for the foreseeable future, this worry is lessened.
 
Thanks Gianni,

"At 50yrs old and looking for a long term home this house will probably be your last move (not to sound too morbid!). So, if you're happy to pay €x (and can afford to do so) to live where you want to live then I'd consider buying."

That's hitting the nail on the head, we're not buying as an investment but as a home & you're right probably our last move!
 
Rent on 100K mortgage property would be in and around €850.

Deposit €60K.

Looking at properties in the range of €290,000. Rent would be in and around €1,200

What is the mortgage on the 100K, that must be well paying for itself? How many years left, you'd have that extra then I'm guessing to start overpaying the home loan if need be in the future.

And what would the mortgage be on the 290K per month. Also what percentage would that be of your salaries, would you have room for a 3% mortgage interest rate say.

You have a 20% deposit which is good.

BTW it's intesting to note that you have mortgage approval as we are being constantly informed the banks are not lending (which I don't believe) but they are clearly lending to those with good deposits, good jobs and no mad debts. As it should be.
 
Mortgage on 100K is c€600 pm as I have a tracker! As I will be liable for tax at the top rate on the rental it will cost me a couple of hundred euro per month to rent it out!

We plan on taking out a 240K mortgage over 15 years and stress testing at 6% its working out around €2000 per month repayments.

We got mortgage approval from BOI and KBC as we both have good savings records, no mad debts or credit card bills etc. Our broker told us that only around 2 out of 20 applicants were successful.
 
Mortgage on 100K is c€600 pm as I have a tracker! As I will be liable for tax at the top rate on the rental it will cost me a couple of hundred euro per month to rent it out!

We plan on taking out a 240K mortgage over 15 years and stress testing at 6% its working out around €2000 per month repayments.

We got mortgage approval from BOI and KBC as we both have good savings records, no mad debts or credit card bills etc. Our broker told us that only around 2 out of 20 applicants were successful.

Can you keep your tracker if you decide to rent out the house?
 
My advice would be to go ahead and buy it, otherwise you might be putting it off forever, as there will always be reasons not to buy.
 
@ Munstershug, I've had trouble free mortgages with AIB since 1995 but when applying for current mortgage approval they came back looking for more and more information that in the end we just couldn't be bothered which I think is exactly what they wanted.

@ tosullivan, have to check my mortgage agreement to see if I can keep the tracker when renting out the house - will report back on this.

@ Greta. I'm inclined to agree with you.
 
Re: Keeping tracker if house rented.

Just spoke to AIB who tell me there will be no change to my tracker if I rent the house out and it is no longer my principal residence. I don't need to inform them unless I want it noted that the house is now an investment property!
 
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