To pull out of a house purchase because of the result.

[sashangel]

DH and I have put an offer in on our first house last week which was going to be our forever home. The mortgage application is going in. In the next few days. I was hoping that the decision today was going to be different.
I now have real reservations about going any further.
We are self employed in our own business which involves my husband working all over the world on a contract basis and earns most of the money.
We have a few options

1. pull out completely and lose a home that we think that we would live in for a long time and keep renting and saving.
2. go for it on the 2 year fixed deal that the mortgage broker has found and risk a interest rate rise.
3. go for it on a longer fixed term in the hope that thing settle down by the time it would end and remortgage on another deal. Also that DH can continue to work abroad easily and still earn the same money.

I am so confused. I want the house but I don't want to get it and be unable to pay for it.

What would you do?

Hang fire.

I'd move, and take the two year fixed rate

Don't keep renting and not take this opportunity to get off the rental bull shit.
If its going to be a house to live in for years, the right house, right area and you are happy with it. Buy it. Live in it, decorate it, enjoy it, be happy.

If your looking to sell it in the next few years to make a few quid. Hold fire.

My concern would be banks being more cautious with mortgage offers at the moment though so id think its now or when the dust has settled.
Whatever happens with house prices will affect the rental market in someway, so you may as well be putting your own money into your own home. Rather than being at the mercy of a landlord.

Move on a fixed rate. The sky isn't going to fall in.

If you think you are going to be living there a long time go for it. If you rent your private landlord might have to sell up so you could end up having to move anyway

Can you afford a potential hike at the end of the fixed rate? Our new lender asked us to consider if we could afford to pay our new mortgage if rates jumped to something like 18%.

Interest rate rises are always a possibility regardless of today's result. I would say that if you are in a position where an interest rate rise was going to put you in a difficult position then you've already borrowed too much iyswim, in which case perhaps today's result has just made you realise that.

In terms of Negative equity or the potential for negative equity, that is really only an issue if you're planning to move in the short term. If not then house prices will recover in the long term, so I wouldn't be dissuaded by the potential for negative equity if this is supposed to be your forever home... :-)

Take the 2 year fixed rate and work your asses off to save save save for the next two years so you have as much of a cushion as possible.

We are slightly further along than you. We have made an offer on a place and had accepted an offer on ours and are getting surveys etc done now. Be prepared that the housing market has dropped with all these. The valuer for our buyer's bank has now undervalued our house due to this so we have had to renegotiate our sale. We are still going ahead but we need to as we are moving for job reasons. If we were at a stage where we would lose no money and didn't need to change location we would probably be waiting for things to stabilise. X

Thanks for the advice. DH and I have had a talk and decided to pull out.
As his job is all over the world but mainly EU we have decided that it is not worth the risk. If we bought the house it would mean using all our savings that could keep us afloat for nearly 3 years if anything was to happen. If we bought the house we would have nothing to fall back on. We will hopefully not need to use it and can save a bigger deposit and hopefully a nice house can be found when everything has settled

We have just made the same decision sachangel. We also have around three years of money in the bank and had considered putting a lower deposit down and keeping cash back - but that still doesn't protect us from negative equity. I'm sure things will level out soon but these are uncharted waters.

Fortunately our house wasn't our "forever" house so we're not too concerned about pulling out.

I was in tear on the phone to mortgage broker, estate agent and solicitors 10 minutes ago.
I know in my heart of hearts that we have made to right decision to pull out before it has caused problems or cost loads of money.
I know we will find something in time when things have settled but I had already planned everything in my head.

When I spoke to mortgage broker he said that we weren't the only ones today and that we won't be the last.

good plan. if interest rates rise then prices may drop and you may get more with your money - it'll also be a better time to be saving and not paying for debt.