Worried About Buying Now

[1stTimeMummy2021]

Hi everyone, I am buying what could be the forever home but am worried because of all the threads saying there will be a property crash. My deposit is 20% and my family plan on staying in the house for at least 15 years but I'm nervous about this pending crash and negative equity.

Can you afford to overpay your mortgage somewhat?

People with a 20% deposit who are planning to stay 15 years don't really need to worry about negative equity. People with a 5% deposit who are planning to move within 2-5 years are the ones we should be worrying about.

What initial fix do you have? If you are really, really worried, 5 years would be the most sensible. But if you are moving to an area that's known to weather financial storms quite well (look back on land registry data sold prices around years of financial crisis), you shouldn't worry too much, as you are in a pretty good position.

@KievLoverTwo I'm planning on starting a new job come September and when I do we think we'd be able to overpay our mortgage quite a bit, once we've furnished the new house etc. We got a 25 year mortgage, fixed for 5 years at 5.39% I believe.

I think you are being sensible and have nothing to worry about, especially if you can and will overpay in the future.

House prices will continue to fall for some time, but by the time your five year fix is up, they probably would have had 2 years of rising again.

And a 20% deposit is healthy and almost certainly would cover most house price losses anyway.

Just be really, really careful to ensure that you are not paying more for the home than it is worth, right now, in the current climate. Not summer last year's over inflated house prices (which many sellers are still holding out for).