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Original poster

Would I be mad to buy a house now?

38 replies

Cactusspike · 04/08/2023 09:10

Long post, sorry.

Currently rent privately, not cheap but definitely paying under market value for the area so that could increase if landlord wanted to.

Work for the NHS, good secure job with opportunity to make extra income by doing bank shifts.

Single parent to 2, primary age.
My parents have helped me out with a deposit and I had an offer on an amazing house accepted last week. I had an AIP, all the signed gifted deposit forms and thought it was sorted. (Was going to do a 5 year fixed rate because this would be our forever home)

Fast forward to yesterday when I was informed that the lender has reduced their mortgage offer. Bummer. Broker has tried other lenders/options but because of the current financial climate she can't find anyone willing to lend what was originally offered a while back when AIP was granted and this leaves me with a 10% shortfall, around £15k.

I do have most of what's needed to secure the house but it's in my children's savings accounts/premium bonds, I could also earn quite a bit extra by the time exchange and completion occurs, but then I won't have a penny to my name, absolutely no savings.

FWIW the mortgage payment would be £10 more a month than my current rent.

I guess my question is, should I absolutely skint myself out and go for the house for 'security' or carry on renting with the real possibility of the rent increasing and increase my savings, rental is huge and old and expensive to run. Other house is a perfect house for us size wise and cheaper bills (I've lived in a similar one) there is nothing else on the market worth seeing at the moment.
My gut is telling me to go for it, I work really hard and it would be nice to have something to show for it but part of me thinks it's absolutely absurd to make such a huge decision in the current financial climate.

I could speak to estate agent and try to renegotiate purchase price but apparently they were offended by my first offer and have only accepted this one because the agent told them to be realistic.

OP posts:
Original poster
Cactusspike · 04/08/2023 09:12

The loan to value on the lower mortgage offer would be 65%.

OP posts:
Peony654 · 04/08/2023 09:14

At that LTV; I would go for it. Id make sure you have the appropriate income protection given you’re a single parent, in case you can’t work. And prioritise building savings quickly once you’re in.

flipent · 04/08/2023 09:15

I would absolutely go for it.
It is unlikely that interest rates will continue to stay this high long term. Agree with fixing, but would consider 2 years.
If the interest rates fall, you can remortgage at a lower rate, so long term you will be better off. Rent's are unlikely to come down in the same way.

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Peony654 · 04/08/2023 09:15

We’ve just bought a house at 20% LTV, you can’t wait forever and rent is such a waste of money.

Zipps · 04/08/2023 09:19

I would go for it, especially if you want it long term. There are always these scary phases but before you know it they pass. Prices always go up and I think by 2030 average house price will be around a whopping £400k.
You have a stable income and presumably can save again. I got out of renting as soon as I could and absolutely skinted ourselves for a couple of years but it just eases off after the initial phase of not being able to buy anything non essential.

Changes17 · 04/08/2023 09:19

Go for it. You can afford it and the lower running costs will mean you will be able to rebuild your savings. But you have to see it as your long term home in case its value goes down in the next few years.

Flittingcandlewick · 04/08/2023 09:26

Can you access the children's savings?

Pinkitydrinkity · 04/08/2023 09:27

Yes I would go for it ☺️

Original poster
Cactusspike · 04/08/2023 09:30

Oh wow a resounding yes then!!
I totally agree about rent being a waste, Im paying my landlords mortgage so may as well get my own.

Yes I can access some of the kids accounts just not their ISAs.

OP posts:
onefinemess · 04/08/2023 09:31

Of course you should go for it. Not even a question. Your kids will thank you for it.

Short term pain for long term gain.

FANCHEA · 04/08/2023 09:35

I know it's scary now but I think you should go for it, with specific reference to the rent/mortgage payment difference.

Anyfeckinusername · 04/08/2023 10:42

Go for it!!!! And good luck!

Original poster
Cactusspike · 04/08/2023 11:54

Thanks all for your words of encouragement.

The wonderful broker has thought of a last ditch attempt to get the loan slightly higher (because it makes such a small difference monthly) so has sent it back to lender and says to keep fingers crossed her plan works, I'll be in limbo for a few days now before I'll know and then I'll have to sit down with my calculator and make some big decisions

The house really is perfect

OP posts:
BringItOnxxx · 04/08/2023 11:57

I would 100% go for it. What if your landlord decides to put your rent up by £100+ next month or the next?

HarrietJet · 04/08/2023 11:58

Cactusspike · 04/08/2023 11:54

Thanks all for your words of encouragement.

The wonderful broker has thought of a last ditch attempt to get the loan slightly higher (because it makes such a small difference monthly) so has sent it back to lender and says to keep fingers crossed her plan works, I'll be in limbo for a few days now before I'll know and then I'll have to sit down with my calculator and make some big decisions

The house really is perfect

Fingers crossed for you.

MinnieMountain · 04/08/2023 12:03

If the savings accounts you can access are in your DCs names, money laundering rules mean you can’t use the money.

TheYearOfSmallThings · 04/08/2023 12:09

I would do it if you can legally access the money. More security and a house you love - imagine the peace of mind once you get through the tough but at the beginning.

PinkPlantCase · 04/08/2023 12:18

Can you ask your parents if they can put any more into the deposit? It’s an awkward conversation but would be worth having if you need more financial security.

We had a similar situation at the start of this year. Original lender reduced their offer by 100k after we’d had an offer accepted on the house we wanted. Broker managed to find us another provider but it was with a 40 year term and we had to put another 30k in which included a fine for not being able to port our current deal. Fortunately we did have the savings but it means we can’t do any work on the house for a while.

It felt like such a mess at the time but I’m so glad we went ahead. We can live in this house literally forever, we have another baby on the way and the old house would have been far too small. We’ve been in for around 4 months now and I’m happy with the choices we made.

If you need a house you need a house. If the market is taking a downturn then it will become much harder to find a decent one, people will only sell if they have to because of debt, death and divorce. If you’ve found one you really want I’d stick with it.

MathiasBroucek · 04/08/2023 12:24

Do it. Prices may fall a bit further but you need to take a long-term view

Time40 · 04/08/2023 12:24

100% go for it! Good luck, OP - I hope you get it!

Ariela · 04/08/2023 12:33

Will the vendors drop a few % - did you ask this?

Yea2023 · 04/08/2023 12:34

When talking about spending my savings/rainy day fund for house deposit, my dad pointed out that I wasn’t spending my savings, I wasn’t just converting them to bricks and mortar.

adjusted my thinking.

nickbreston · 04/08/2023 12:37

This reply has been deleted

This has been deleted by MNHQ for breaking our Talk Guidelines.

Original poster
Cactusspike · 04/08/2023 12:42

So to answer a few questions

The 'kids' savings accounts are in my name, never got round to doing anything official, it's minimal amounts really. Their main savings are in their ISAs in their own names and I can't touch those.

I have asked my parents and they said they might be able to help a bit more but won't commit to an amount and as they are already lending the majority I don't want to press them or offend them.

I haven't asked the vendor yet, I figured that I will see what happens with the mortgage and then if it doesn't work out I'll ring the agents and explain the situation honestly. They were very reluctant to accept my highest offer so I would say any further reduction wouldnt be received well.

OP posts:
DottyLottieLou · 04/08/2023 18:15

Yes, house prices are coming down and if you can afford the mortgage when rates are high you can definitely afford it when they start going down.