To ask whether being a homeowner is worth this?

[Peppermintpatty56]

We have quite a weird financial situation.

We rent, and are now in our 40s. Husband is a decent earner and as I'm disabled with 3 children classed as disabled also so we get disability benefits and UC.

We have to move house, and for the first time, we're in a position where we could potentially buy. But we will lose income if we do- 1) because the mortgage payments are currently substantially more than our rent 2) we'd lose the housing element of UC.

The deposit is gifted and obviously we wouldn't qualify for UC whilst it's in our possession.

So, given our age and the fact we'd lose a substantial chunk of monthly income... how important is it to buy in your opinions?

I think it depends on how stable I feel in rented accommodation - is there lots of options where you live, are you likely to be evicted by landlords wanting to sell etc and then not being able to find anything else. When I got my own place a lot of worries that I wasn't actually aware of lifted and I felt very secure as it was in my hands. That said though, I wouldn't feel the same way if I was really struggling for money and worried if I could afford the next mortgage payment. So I think it's very specific to you and your families circumstances.

I would write a careful budget based on the new earnings if you buy. Including making sure you include all the costs associated with it. Then if it was manageable without being really tight I would go for it. This is because you wouldn't have to worry about how to pay the bills in retirement. And you'd also have more security

Thank you both, I think we need to do a budget- I have in a very ballpark way but need to go into more detail.

There's also a part of me that worries we would still be paying this mortgage really late in life.

Stability is obviously the biggest thing.
We always felt very safe renting previously, in 20 years we've never moved unless it's been on our terms. But this time our landlord is selling not even the house but the land to developers. We love this house and it's a horrible feeling.

Having suddenly been turfed out of a rented home after 10 years, yes I would do it. But only if it’s affordable. I love being able to relax and make our home the way we want it without being at the mercy of someone else’s whim.

And a big advantage for your children.

One of the major reasons why we keep "climbing the ladder" beyond wanting some more space is to have more to provide my kids when they're young adults. Equity gives me a lot of comfort for their sakes.

But you'll be paying rent until you die?

Any chance of getting social housing in the near future? With disabled children you'd be somewhat of a priority surely?

You need to do the complete list of pros and cons based on where you are, what the local rental market is like and what you'd be able to buy.

Renting leaves you vulnerable to being ejected through no fault of your own.

Owning means you have to find the cash to deal with it when the boiler breaks or the roof needs replacing. If you rely on UC then it's difficult to keep enough savings in hand to pay for emergencies without losing some of your income.

Do you have any options for council/ housing association housing? I know there isn't much around but multiple disabilities must give your family some priority.

You might be paying the mortgage until your 60's but then... No more rent. And an asset that you could sell later in life to fund care.

I would be thinking bigger picture in the future if you carry on renting just because it works for you now doesn't mean it always will - how will you pay rent once you have both retired? Do you have or will you have income from other sources/pension to fund your lifestyle later on?

Many things to consider when thinking about buying a property. Will you have funds available to maintain it e.g. if the boiler breaks and you need to spend 2k on a new one (e.g.).

I'd probably opt for buying in your shoes.

I wouldn't in your position as you'll have to sell the home to pay for care fees when you're old but if you rent you'll get it all for free and your rent gets paid now anyway.

when your children leave home you will have a drop in benefits especially the housing element so it might be worth buying to avoid the sudden drop in income and having to move. Or if your children are likely to remain living at home it may be better to stay renting.
Home ownership comes with surprise costs, usually when you can least afford them

The issue isn't really rent payments (although HB may not always cover full rent anyway) it's finding a place.
Most LL's don't want benefit claimants as tenants.
Can you imagine OP and her DH being evicted as pensioners and having nowhere to go?

Having said that, I've heard social housing is easier to get for over 55's in a retirment complex or similar.

@OneCoolPearlOP and they'll lose their mortgaged home to the bank if the husband can't keep up with the expensive payments as the sole earner.

@Peppermintpatty56

Do they still do lifetime tenancies in your area? If You could get one of those that's what I'd do.

if not I'd be prepared to be worse off now, for the security of owning. There are financial pros/cons to both, but for me it comes down to security, for me, absolutely nothing beats knowing I'll never be told I have to move out & worse still the absolute nightmare of trying to find somewhere. Especially if I was disabled myself & had children. That would terrify me.

is your gifted deposit very low? Would you qualify for a big enough mortgage to get a big enough house for your family's needs??

it is very unusual for a mortgage payment to be higher than rent on the same type of house unless you've got a tiny tiny deposit maybe.. Definitely recheck your figures.

So many things to consider & im very sorry you're losing your home.

You need to the same comparison (rent v home ownership) for your retirement years too, as it's after the house is paid off that the real benefit comes.

Thank you all, reading your replies is all the things I keep going over in my head!

Just to answer a few questions, there is very little social housing in our area, especially the size we need. Also no shared ownership I can find without moving out of the area we need to be in for ds' specialist school.

The other option we have is we delay buying for now and revisit in 18 months/2 years when we could potentially get a better deal and lower payments. We could also use this time to save a bit to add to our deposit (inside the uc savings rules obvs).
We would have to rent again in the meantime with that option though, which I do worry is unsettling, especially for the kids. And time is ticking mortgage wise because of our ages.

Yeah don't delay and wipe an extra 18 months of your maximum term just to save something less than £16k . Not without a good specific reason for doing so. It could easily end up costing you more.

Give yourself a month to decide and to speak to a broker and ask your relative to hold onto the gifted deposit until then.

Not everyone ends up in a care home though. That seems a crazy reason not to buy.

If they don't buy they'll rent forever and definitely have no house of their own at the end of it.

That’s a gamble. If the one of you who survives needs to go into a care home, you could lose the lot.

If you raise the unfairness of one set of children inheriting while the children of a similar family don’t, everyone clamours to tell you “but that’s what you save for! Care in your old age!”

No reason why the relative shouldn’t hold the money till the day it’s needed, is there?

Of course.

I think PP is saying that because they are 40. Waiting 18 months to save a max of 16k makes no sense. Because it reduces their max loan length. Which has knock on effect to a number of things.

I think PP is saying that because they are 40. Waiting 18 months to save a max of 16k makes no sense. Because it reduces their max loan length. Which has knock on effect to a number of things.

Yes. thanks. That's what I was saying.

Do it if it's at all within budget and the house is a good investment. You need the value to appreciate, which depends on where it is located and the current economic conditions in your area.

I'm selling my former home at an enormous profit which I will invest for my daughter's future. The value has gone up over 200% over 12 years. She will also get my current home. If you have an asset to hand down to your kids, you tend to worry less about their future. I hope you can manage it, but if it's not in budget, why not invest the deposit you were gifted instead so you can still buy in the future. See a financial advisor about that.