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deerohdeer1

Advice Needed...

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Hello, this is my first post but I have lurked for a long time, basically I need a sanity check.

In 2012 myself and my partner had enough savings for a 10% deposit on a house (worth around 200k) with enough spare change left over to fill it up with essentials (furniture , white goods etc ). Like most on here I believed that there would be a continued price correction in real and nominal terms so I was happy to continue renting and place my savings in a 'high' interest savings accopay, where I couldnt access my savings for 12 months to get the rate.

Anyway after waiting a year and getting my statement and confirming just how little money it returned and house prices slowly moving again I decided to look at buying. Long story short after a long search we managed to find a property, having negotiated 15k off the asking price the seller in nominal terms has made 5k on the property having owned it 8 years.

I am planning to take a 5 year fixed mortgage with no penalty for early repayment/overpayment. Myself and my partners salary means the mortgage will be around 20% of our take home pay.

My question is am I stupid for doing this? Should we carry on waiting?? We are not seeing it as an investment just a home. Both still in our 20's and the way things are looking I don't want to be paralysed by the uncertainty of waiting for a correction that might not be allowed to happen for a long time. Anyway your thoughts are appreciated.

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Well, everyone to their own devices as they said. Ultimately it will be your decision and your life ahead.

((I was renting and am still bear on houses than bull. But then again I found a house which ticked a lot of boxes. Relatively cheap, built long before the builders were replaced by economists, almost no asbestos (and what was there safely, easily and reasonably removed), one of the biggest gardens in that part of the town, secondary school is at the end of the road so my kids don't need to cross any road. Easy to get out of town, access to West coast mainline (London in 30 min), access to M1 and others. With two kids and dual income I did a lot of research and weighted pain and gain. Decided to buy it and I think I am happy with my decision. Took a lifetime tracker with no penalty for repayment. calculated that the interest needs to raise to 8-10% before we can start feeling it. At the same time put 20% deposit and (you will hate me for saying that) increased the value of the house by rewiring to latest standards, structural cabling for data in all rooms, new kitchen and central heating. So we have a cushion should the prices fall (not that I will not be loosing in that case). My view is to stay in this house at least until the kids are out of the secondary so another ten-twelve years.))

Sooooo, if you dont have to compromise a lot and you are comfortable with what you are getting and what you are loosing then make your choice appropriately.

Look on the internet for this excell sheet: http://office.microsoft.com/en-us/templates/TC010566201033.aspx

Play with it and work various scenarios: overpayment on monthly basis, on yearly basis, play with the rates and see how you will cope if it goes north. Then sit in front of your partner and look her/him in the eyes and make the decision. It will be clear if you can afford or you should wait a bit more. Good luck

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