Should I rent? Should I get a mortgage? What should I do?

[kainedamo]

I've been saving up for ages. Unbearably being unable to touch most of my money. I've intended to move out with some friends into a house and completed an application form for a lease which I handed in. But two other people want the house, so that might fall through.

It would be my first time having my own place. I'm wondering, if it does fall through, what should be my next step? Renting is all well and good as a temporary means of gaining some freedom and independence, but I wouldn't really be able to save much money. A mortgage would be like a long term investment. But a very costly investment. I'm not even sure if I could afford it. Maybe I could get a mortgage, and have the people I intended to move out with move in and help pay the mortgage.

But if I got a mortgage, I'd be paying it off for like 25 years or something. If I went ahead with it and it turned out to be a mistake, I wouldn't be able to change my mind. Whereas if I were renting, it wouldn't be a big deal to just move back home if I lost my job or whatever.

I could live at home for another year and save like a mother ****er. But to tell you the truth, I'm depressed living at home. My space isn't my own. I can't do what I'd like to do. Kids are always over - my brother and one of my sisters' kids. My two older sisters that live at home dominate the living room and kitchen. So I'm stuck in my room all the time. Being bored ****less, of course, because it's very limited what I can do in my own bedroom. And partly bored ****less because I can't spend my own money on account of saving it all the time. Also, I hate the ****ing area I live in. Place is such a dump and the people here are *******s. I'm 70% sure if I stick around in the Short Strand too long, some drunk fool will stab me thinking I'm an outsider.

I'm not sure what my best option would be. And of course I have no prior experience with this kind of thing.

 

[union_jak]

I don't plan to rent when I move out, there's no future security in it.

 

[squeekness]

I know it sucks living at home, but if you ask me, your best bet is save like crazy for another year so that you can put down a sizeable chunk of change down on something. Nobody says you have to buy a mansion, if it's just you, get something small and managable. Buy it, sit on it, and then if your lifestyle should change, you can always sell it and go bigger, hopefully with more than one paycheck contributing next time. The fact is, you don't get a return on renting, but you will with property. I say suck it up, save, and buy something small later that you can afford.

 

[GoldenAgeHero]

depends on the economy, if you live in the US especially in florida...don't buy a house.

 

[kainedamo]

House prices here are crazy, really. The average house is about £200, 000.

I have £1000.

 

[tzarinna]

I had a house at an early age, when I didn't want one and it was a disaster, huge money pit. The mortgage was more than what I could afford even with the rooms rented out. Now I'm more established it will still be a rough go being single and all but I think I'll be a hell of a lot happier. I just hate shopping and this is a huge decision to make.
I agree with Squeek, if you can hold off for another year, it could really payoff. Have you consulted with a realtor?

 

[kainedamo]

I was gonna ask my bank more about it, tzarina.

 

[tzarinna]

I would still suggest talking to a realtor as well.

 

[squeekness]

House prices here are crazy, really. The average house is about £200, 000.

I have £1000.

I was hoping you had more than that saved. I bought a house for 104,000, but I had 10,000 to put down on it. Just that 10% made it so much easier to get a loan, plus the less you have to finance the better. I also bought a house that was small and well within my budget so that even though I had a 30 year loan, I could make extra payments that got me out from under that loan early. It would be better if you had 10K rather than 1K. Or better yet, 20K.

 

[tzarinna]

I was hoping you had more than that saved. I bought a house for 104,000, but I had 10,000 to put down on it. Just that 10% made it so much easier to get a loan, plus the less you have to finance the better. I also bought a house that was small and well within my budget so that even though I had a 30 year loan, I could make extra payments that got me out from under that loan early. It would be better if you had 10K rather than 1K. Or better yet, 20K.

Is that with two incomes. I have to put down 15% on 255K. It hurts. I wanted to keep at least 10K in th bank.

 

[union_jak]

I have £1000.

Wow. I'm just out of university but I've manage to save a lot more than that from my Saturday job

 

[kainedamo]

I'd be saving up for a year in that case.

I could find out if I can invest my money or something somewhere. What would you guys suggest in regards to saving and investment?

 

[squeekness]

Is that with two incomes. I have to put down 15% on 255K. It hurts. I wanted to keep at least 10K in th bank.

Yeah, that was with two incomes. When we got amrried, I had about 5K saved up and so did my husband. We put it together to put down. I know my kid wants out of the house, but I have councilled her that she should stay, work and save up money while she has no major expenses. In this day and age, you really can't swing a house on your own without a huge chunk of change to put down. It's not really fair.

 

[tzarinna]

I suggest you talk to someone at the bank.

 

[squeekness]

I'd be saving up for a year in that case.

I could find out if I can invest my money or something somewhere. What would you guys suggest in regards to saving and investment?

Since you are not in the US, I don't really know what your options are. Most investments would tie up your money for too long. Even a modest CD with a good return here would tie up your money for a couple of years.

I suggest you talk to someone at the bank.

I agree.

 

[tzarinna]

Yeah, that was with two incomes. When we got amrried, I had about 5K saved up and so did my husband. We put it together to put down. I know my kid wants out of the house, but I have councilled her that she should stay, work and save up money while she has no major expenses. In this day and age, you really can't swing a house on your own without a huge chunk of change to put down. It's not really fair.

My mortgage payment is going to be sick. I plan on refinancing with in a year, plus I get a 20% raise in November so that should help offset. I only have a car note. Everything else I own outright.

 

[squeekness]

My mortgage payment is going to be sick. I plan on refinancing with in a year, plus I get a 20% raise in November so that should help offset. I only have a car note. Everything else I own outright.

The best thing you can do is clear all your debt and it looks like you've done that. I hear horror stories of folks who go into a mortgage with their credit cards already loaded with debt. You don't want to do that, nor do you want to go on a spending spree after, either. Just because you have a new house doesn't mean you have to buy all new furniture for it if you have decent stuff already.

 

[tzarinna]

The best thing you can do is clear all your debt and it looks like you've done that. I hear horror stories of folks who go into a mortgage with their credit cards already loaded with debt. You don't want to do that, nor do you want to go on a spending spree after, either. Just because you have a new house doesn't mean you have to buy all new furniture for it if you have decent stuff already.

Oh, certainly my weakness is decorating. But I will hold off until next year to remodel the bathroom. If I get the one I want that is

 

[Jack Rabbit]

Invest in a realdoll, kaine.

 

[Prison Mike]

Buying a house is a good longterm investment. It will be cheaper than renting in the long run. Even if you don't plan on staying in the house very long, you can always sell it and make a profit (provided you sell it for more than what you bought it for).

 

[black_dust]

Im in the process of buying a house (few more weeks and its mine!!) Moving in with my G.f. Got a mortgae and what not.

Now i just need to pick some colours for the walls

 

[zanos]

You're going to share a mortgage with friends? That sounds like a disaster.

 

[kainedamo]

Okay... how about if I do the following... with my bank, I can open a savings account, and be eligable to borrow five times as much as I've saved...


Save per month
£400

In six months I'll have
£2,400

Then I could borrow
£12,000


So if I saved £400 per month for 12 months, I could borrow £24, 000. I could use that money to get a mortgage, and let the place out to other people. So I'd be able to pay back the bank, and the people I'd let to could pay off my mortgage.

How's that sound?

 

[Erzengel]

House prices here are crazy, really. The average house is about £200, 000.

I have £1000.

I'm looking for a place too but however £1000 doesn't seem a lot to put down for a down payment.

Normally, you want to put down 10% which in this case is £20,000 which I don't see you having the money for. Then you'd get a 25 to 30 year mortgage (loan) for £180,000 (remainder).

Don't share a mortgage with anyone unless it's a wife. Even then though, I wouldn't recommend it. Just because you could use her for a first time home buyer sometime in the future.

If you really need to move out, I'd really suggest just having a roommate and getting an apartment.

Of course, right now, you pay no rent and you can pretty much save which is what I recommend you doing.

 

[kainedamo]

Well what I could do Erz, is through an estate agent I could get a mortgage, and then let the place out to other people so they pay it off.