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To purchase a house without any savings?(51 Posts)
I'm a 27 year old first time buyer and I've just found my dream property, in a dream location for a dream price! It's just under the top of my budget and I am buying alone.
The property is completed to a very high standard and absolutely nothing needs to be touched. I will obviously get a survey done but it's recently had new windows, roof, boiler, rewire etc.
I'm currently renting and have saved for the past 3 years. But my issue is that I will only be left with around £1000 after the deposit and fees are paid. After having such financial security for so long, I'm really scared to part with this money. However, I'm a very good saver, I'm earning a good salary and am very frugal and careful with money.
My question is (and I know there will be a vast range of varied responses) : is £1000 ENOUGH?
£1000 is plenty if nothing goes wrong. life isn't risk-free and all sorts of things could happen, but in general I would say Go For It. do focus on building your savings back up asap but the security of ownership is worth a little short term risk.
Yes. If you are managing to save each month then that £1k is your contingency for month 1. How much will be added to it in month 1 so by month 2 it's £1k+ X?
I would imagine a lot of first time buyers are in a similar position, when you start paying the mortgage will you be able to save regularly? How secure is your job?
I have always been very, very conscious of having savings as a 'back up', I am over 60 now and have never had an "emergency" so maybe I am too frugal?
I believe the 'average' amount people have in savings is actually very low...
Get a credit card with a 0% interest rate on purchases (for emergencies only) and focus on upping your savings as soon as you buy the house.
Presumably you will be able to save a little even with a mortgage? In my experience, most mortgages are cheaper than rent so hopefully you'll be in a better position to save money every month once you buy?
We had similar left over when we bought our first property and that was a Victorian house where a lot went wrong in the first year!
We were fine because we were used to saving.
Remember while the transaction goes through you will be able to keep saving. And will you be able to save once paying the mortgage?
I think it is doable, I think we had similar when we bought our first house.
Do you have furniture and white goods already?;
Also depends on how much your committed outgoings are per month - ideally you would have a few months saved as a buffer in case you lost your job, didn't have an income etc.
Buy the house! Sounds like you have a good deposit so will have money in it from the off...not like you are blowing your savings on booze and drugs! Buying a house is in itself a massive achievement and one so many people are never able to manage. Enjoy your own home!
Absolutely! We spent every penny we had saved for over 20 years when we bought our house. Every last penny. We both worked and were reasonably confident that we would save every month and we both had credit cards that we had cleared prior to purchase.
If it really is your dream house and you are relatively secure at work go for it. You have to leap sometime, if you want to own your own home!
You sound sensible, but go for it and keep saving like you plan to.
Are you renting somewhere furnished? If so, you'll need money for furniture and kitchen stuff. You can wait and save for a lot of it but there's some stuff you'll need right away, a fridge for example.
I bought my first house with not just no savings but also a nice chunk of debt. You'll regret it if you don't!
But your £1000 is right at the beginning only. I am assuming that you will then start to build up your funds again. You could also think about taking out one of those "home emergency" policies in addition to home insurance that covers boiler breakdowns, burst pipes and those sort of events.
Didn't have any savings at all when I bought mine.
You're all great and this is exactly what I wanted to here I'm a teacher with additional responsibilities and I also do bits on the side so my job is pretty secure! If I was to lose my job tomorrow, I still have a small amount of income.
My partner will not be going on my mortgage but will be contributing 50/50 (temporary contract probz!) and eventually named.
I have all my furniture for a 2 bed flat. However this property is a 4 bed house with 3 reception rooms, so I imagine a few rooms to be empty for a few months and FB marketplace being my best friend!
You need to bear in mind a few things. Firstly that it takes around 3 months to purchase a property so you have some more time to save.
Secondly you will need things in your flat to live like sofa, bed, crockery. You can get a lot of this free or cheap second hand but depends how pick you are.
The mortgage may be cheaper than rent but if you've been a lodger etc you need to consider that you will also have service charges, maintenance, utilities, council tax etc.
That's scary. What emergency help is around? E.g. not suggesting they should but could your parents bail you out in an emergency with a loan?
Can you get a lodger for a year or so to help with bills?
Can you get a Saturday job to supplement your income?
I also have access to some emergency money if everything were to go wrong as my MIL is amazing and I know would help us out! But neither of us are from money by any means. And whilst my family can't contribute to support financially... my dad can fit bathrooms, kitchens, windows and do extensions so I'm pretty lucky!!!
The credit card is also a great idea for emergencies- I've never had one so this will be really beneficial (once everything has been accepted and gone through!).
No amount of savings is “enough”... there are just so many things that can go wrong. However, these things seldom do, and going wrong all at the same time is even less likely.
You will save more between now and exchange.
You would be able to access interest free credit cards.
You could take a mortgage holiday.
You have family who’d not see you starve.
You will also be able to continue adding to your savings as the purchase is going through unless it's super quick. Absolutely go for it, it's an amazing thing to be able to invest in a property on your own. Have a credit card for absolute emergencies.
My first flat I didn't have much in savings - all went into the deposit, and it was hard.
My second flat I saw and fell in love with, but there was a bit of a slump in the housing market so it was hard to sell the first one.
As recommended by my bank manager (over lunch, those were the days!) I took out a £10k overdraft to cover the deposit.
Credit card - good to get one and pay it off every month to build up credit history, but the 0% will be an introductory offer - if you do need to borrow for an emergency, it may be worth looking for a new card and deal at that point.
Definitely buy the house!!
I am a first time buyer myself and just submitted a mortgage application.
We have scraped every penny to put 15% down. We have nothing saved yet to move but know it will be 2 plus months before we move , maybe longer. So we can both save in that time. We don't have rent to pay though as living with parents so that does help.
But my advice - take the plunge and buy the house. It's an investment and you will never regret getting on the property ladder.
You’ve already got furniture and you’d have a bit of money left + your boyfriend to contribute to bills. I think that you’ll be able to save and build a pot soon enough so I’d go for it.