Should I buy a house or rent

[Rayn]

Hello
We have fortunately inherited some money and have 10% for a deposit.

However, we are both 47 with children ranging between 5 and 18.
I just don't know whether we should buy a house at this stage in our lives. We need 4 bedroom as 4 children and although our mortgage would be similar to our rent then I am aware of other costs.

We previously owned our own home but lost it when our business went down and we lost everything. All the business debt has gone and we are starting from scratch.

A four bed house will set us back around 325k where we are. We earn around 80k between us. However having a 295k mortgage at my age scares me and we would need to take it out over 20 years minimum.
My husband thinks we should buy a house as our youngest is five and still will be home for 12+ years.

However, I would like to buy a flat for about 150k so mortgage would be 120k ish and we can retire into when needed. Would just rent it out for now and keep renting where we live.
We can't move area due to blended family reasons and I care for an elderly relative.

Also house prices? Who knows what is going to happen next year.
Any advice much appreciated.

Surely buying a house with 4 children, good salaries and living in a cheap area for housing is the only sensible thing to do. Mortgages are usually less than rent and you have an asset for the future. Why would you buy a flat and pay mortgage and rent? A 20 year mortgage would bring you to retirement age and hopefully you could pay it off sooner.

Why does a relatively small mortgage between two comfortable earners at 47 scare you? You’ve got potentially two decades of working life left to pay it off, you’ll have the benefit of living in it and an asset at the end of it which you could still sell to downsize.

There are costs associated with home ownership, yes; but in 15 years of it I’ve never had to do anything more than general structural maintenance amounting to a few hundred a year on average - biggest expensive I’ve ever had was a replacement boiler.

Nobody knows what will happen to house prices, but if you’re paying rent anyway, the house “value” could fall this year by whatever you pay a year in rent and you’d still be better off. Also, you look at it as a long term projection - if you aren’t intending to sell within a year or two, if doesn’t really matter what prices to in the short term.

Buy definitely don't rent. Wasted money and also landlord can sell up at anytime or put up rent. You've more control with your own house

How secure are your jobs?

I would go with the second option personally.

In your shoes I would buy a smaller house with fewer bedrooms thinking same sex siblings could share and eventually leave home. As the thought of a debt like that would give me a cold sweat and also you have four children to fund currently so wouldn’t be able to pay down that mortgage as quickly as you might want to.
Go into a mortgage calculator online out in the date you want to stop paying eg retirement and from that you can play around with figures to see the affordability.

But I am very conservative with a small c and others will say just go for it.

I would buy so long as mortgage was no greater than the rent.
Don’t worry about paying off the mortgage, you plan to downsize anyway in 15yrs or so and the equity released from selling the house will easily pay off whatever is left on the mortgage and still enough left over to buy a flat outright.

Buying a flat now and renting it out is a very bad idea. You’d have the hassle of being a landlord (can be very expensive plus income is taxable). In addition, you will have less leverage in return for your deposit (initial investment). The increase in value on the flat will be far less than the increase in value on a 4 bed home.

Definitely buy the house. It won't be that much more expensive than renting, maybe cheaper. And you'll have something to show for it in 20 years. Downsize when the dcs move out. Pay your own mortgage, not someone else's!

If you can get a bigger deposit together, it will make more sense. 10% deals are very limited (and come with stringent criteria) and none of them have decent interest rates.
Also, your age will limit how long you can stretch your mortgage out.

Thankyou so much or all the replies. You make a lot of sense. It has really helped.
We gonna have a good chat tonight but looks like it all may go on hold over the next few weeks anyway depending on covid.