Signed for house - TODAY

warrenaldo

Just back from Solicitors, signed for a 3 bed semi-d in Dublin today. 270k.

I have been reading this forum and others for months now trying to decide if I was doing the right thing or not.
I am still not sure if I did the right thing financially - I have a feeling I will be in negative equity pretty soon. I hope they dont fall massivly more.

However, family circumstances dictated and we needed a house. I think/hope it was right for us. 3 kids - need some stability.

Just want to thank everyone for helping me make the good/bad decision.

dresstoimpress

Congrats!!!:D

godtabh

warrenaldo wrote: »

Just back from Solicitors, signed for a 3 bed semi-d in Dublin today. 270k.

I have been reading this forum and others for months now trying to decide if I was doing the right thing or not.
I am still not sure if I did the right thing financially - I have a feeling I will be in negative equity pretty soon. I hope they dont fall massivly more.

However, family circumstances dictated and we needed a house. I think/hope it was right for us. 3 kids - need some stability.

Just wasnt to thank everyone for helping me make the good/bad decision.

If its going to be your home for the next 10-20 years who gives a **** about negative equity?

old hippy

Well done, anyway. Nothing like a bit of stability.

Joey the lips

Congratulations. As said above.... Negative equity is only relative if your selling

dan_d

Mate...the price of your house only matters on the day you buy and the day you sell. In between, dont' worry and don't regret it. Congratulations, best of luck in your own home, and don't think about other people's opinions - you're happy and that's what matters.

Danbo!

warrenaldo wrote: »

Just back from Solicitors, signed for a 3 bed semi-d in Dublin today. 270k.

I have been reading this forum and others for months now trying to decide if I was doing the right thing or not.
I am still not sure if I did the right thing financially - I have a feeling I will be in negative equity pretty soon. I hope they dont fall massivly more.

However, family circumstances dictated and we needed a house. I think/hope it was right for us. 3 kids - need some stability.

Just wasnt to thank everyone for helping me make the good/bad decision.

Well done. While its easy to say forget about negative equity, it may play on your mind even though you are not selling. Just think if you started this thread in 2007, the words '3 bed semi' 'Dublin' and '270k' wouldnt be in the same sentence, unless perhaps the 270k was referring to the deposit . Well done.

bugler

Your gut feeling is right, you will be in negative equity, and possibly quite a bit of it. But you have to do what you have to do, so best of luck with your decision and I hope you're happy in your new home.

Congratulations. As said above.... Negative equity is only relative if your selling

the price of your house only matters on the day you buy and the day you sell. In between, dont' worry and don't regret it. Congratulations, best of luck in your own home, and don't think about other people's opinions - you're happy and that's what matters.

NE matters as it is a consequence of buying something whose price has fallen. It costs you money to borrow money. The more you borrow, the more it costs.

Negative equity costs you money because you paid a higher price for something that could have been had cheaper had you waited. Negative equity does matter.

How you play that off against the need for a home or other factors is entirely up to the purchaser, and this case the OP seems to have his reasons.

Idbatterim

OP, I just have 2 questions. What are the montly mortgage repayments and what would the equivalent house have cost to rent?

Idbatterim

In relation to the price only mattering on the day you buy and sell! well thats a matter of opinion!

warrenaldo

Monthly repayments - after interest relief will be approx 900 per month.

Renting a similar property - approx 1000 a month (maybe 950)

staker

Congrats OP.

You're doing it for the right reasons and best of happiness and health with it.

I personally didn't post here when I bought,even though I had followed a lot of what was being said at the time on this forum, so that in itself takes balls.

Idbatterim

think if the cost of ownership is equal to or less than rent, it may make sense for some people to buy. What was the house going for at peak prices?

gurramok

warrenaldo wrote: »

Monthly repayments - after interest relief will be approx 900 per month.

At what interest rate, fixed or Var and length of term?

warrenaldo

Not sure of the prices at peak levels, but I know they were over the 400k mark at one stage. That was probably close enough to peak.

Its a 35 year term. Im currently variable with AIB.

gurramok

35yr is a very long time. Try overpay now before the interest rates will go up so you could reduce that term.

JoeyJJ

Congrats, I have a 16 month old and the urge to buy was strong a few months ago, decided to wait till early next year possibly unless something comes up.

Can I ask what the asking price was on your property if thats not too personal, just trying to gauge what price properties selling at 270k are being advertised for.

Blackjack

JoeyJJ wrote: »

Congrats, I have a 16 month old and the urge to buy was strong a few months ago, decided to wait till early next year possibly unless something comes up.

Can I ask what the asking price was on your property if thats not too personal, just trying to gauge what price properties selling at 270k are being advertised for.

Congrats to the OP also.

Would also be interested to hear the original asking for the same gauge. Grateful for a PM if you're not keen on putting this in Public.

pburns

Blackjack wrote: »

Congrats to the OP also.

Would also be interested to hear the original asking for the same gauge. Grateful for a PM if you're not keen on putting this in Public.

+1, although I'd understand if you'd rather not say...

warrenaldo

Asking price was 325k - I got it for 270k.

I could try overpay now - while Im young(ish) but I reckon I should enjoy the extra money now.

We have extra savings of about 20k, we could put that into the mortgage and reduce the term/amount.
However, we plan to use this money to enjoy the next few years, and god forbid anything bad happens - we can use the money to fall back on.

spockety

warrenaldo wrote: »

Monthly repayments - after interest relief will be approx 900 per month.

Renting a similar property - approx 1000 a month (maybe 950)

congrats on your new home.

just wondering how the bank behaved during the process. Did they warn you at all about interest relief being scrapped, or interest rates rising? Anticipated retail rates of 7% will see your repayments rise to in excess of 1,500 a month before long.

Or did you know this yourself going into it?

MRBEAVER

Interest relief is not being ended till 2017. If you really think that interest rates will rise shortly to more than 7% then surely this is an arguement for buying now and fixing.

spockety

MRBEAVER wrote: »

Interest relief is not being ended till 2017.

Year 7 of 35.

If you really think that interest rates will rise shortly to more than 7% then surely this is an arguement for buying now and fixing.

House prices are directly affected by cost of credit.

Interest rates rise, prices fall.

(Among the rest of the mess we find ourselves in which also factors)

By the way, who is offering fixed for the entire mortgage term in Ireland?

MRBEAVER

you could fix for 10 years if you really believed rates were going to go that high. surely 7 years is better than no years which is what the OP would get if he waited and spend years more in rented accomadation. "Interest rates rise, prices fall" is ridicolous. Rates are low now and prices are falling. There are many other factors that have a much greater effect prices.

spockety

The fact that prices are falling while rates are at historical lows really should be hinting at the armageddon yet to come when rates rise!

MRBEAVER

You're contradicting yourself now. Your earlier post said "Interest rates rise, prices fall" but prices fell when rates fell and prices were rising a few years ago as rates were rising. fact is there is not much of a correlation between the two historically.

jclare56

congratulations on signing OP!!! i signed for my house yesterday too - its quite a scary thing but I am delighted with the house and the mortgage is less than renting in the area i bought. if you are going to stay in it for the next 10-15 years i really wouldnt worry about negetive equity, as another poster said, it only matters if you are selling, or have bought recently and are trying to sell.

cant wait to get in and start doing it up now!

spockety

Actually I also said:

"Among the rest of the mess we find ourselves in which also factors"

But hey, I could be talking nonsense.

mathie

spockety wrote: »

Actually I also said:

"Among the rest of the mess we find ourselves in which also factors"

But hey, I could be talking nonsense.

I know who I'm backing

Cookie_Monster

Well done on the house OP but I can't help thinking buying a 3 bed while having 3 kids is not really ideal, certainly as they get older.

I would not have bought yet but thats just me and I'd be surprised if I ever buy here.

staker

spockety wrote: »

Year 7 of 35.

Hadn't realised this:o

Could one calculate these future repayments, say at a guessed "informed" interest rate?

Treehouse72

MRBEAVER wrote: »

You're contradicting yourself now. Your earlier post said "Interest rates rise, prices fall" but prices fell when rates fell and prices were rising a few years ago as rates were rising. fact is there is not much of a correlation between the two historically.

100% incorrect. Any part of your post that is correct is only correct by accident. For example, tiny drops of 25bps or whatever once the crash had already started is not an example of prices falling while rates do. It is coincidental, not causative.

The #1 factor effecting property prices is the cost of credit. I have no idea what "history" you have been looking at that suggests otherwise.

spockety

staker wrote: »

Hadn't realised this:o

Could one calculate these future repayments, say at a guessed "informed" interest rate?

Sure, it's trivial. People should be forced to spend ten minutes with a mortgage calculator in the presence of an independdent financial advisor before they are allowed to take a mortgage.

Plug your numbers into www.drcalculator.com/mortgage

As a matter of interest, come back and let us know your reaction to the resulting figures, good or bad!

staker

I just more than doubled the rate at which I'm paying now, which I consider conservative(7.0%).

Without the mortgage relief, it's not a pretty picture tbh.

Freddie59

staker wrote: »

I just more than doubled the rate at which I'm paying now, which I consider conservative(7.0%).

Without the mortgage relief, it's not a pretty picture tbh.

Congrats to the OP on the new purchase. May you have many happy years in your new home. But to those who say negative equity doesn't matter, what if it's presented as a lower cost (and thus lower, possibly short-term) mortgage, saving you tens of thousands of Euro in the process? It starts to matter then.

blast06

People wondering about asking price versus sale price.
I closed a sale in Raotath for a decent 3 bed semi for 243K about 2 months ago with an asking price of 247,500.
Yes, i was surprised too ! but i pitched my asking price at 10K lower than the lowest asking price on the estate

quozl

Congratulations and best of luck, Staker.

gally74

congrats enjoy

Colonel Sanders

Congrats OP. Btw I disagree that price only matters on the day you buy & sell. Switching mortgage providers (to obtain a lower interest rate) can be difficult (if not impossible) if you are in negative equity

noodler

Prices are widely predicted to fall to 50% of their 2006/2007 levels over the next year or so.

They have fallend by 34% so far (nationally) but that figure is obviously higher for Dublin.

So while prices are likely to keep falling - there is no definite way of saying the house you bought would have fallen much more - they are only average figures.

Again - wouldn't worry about it and congrats.

3DataModem

warrenaldo wrote: »

Monthly repayments - after interest relief will be approx 900 per month.

Renting a similar property - approx 1000 a month (maybe 950)

Nice.

The first number will stay more or less level for 35 years.

The second number will probably be 3000+ in 35 years (assuming about 3-3.5% inflation)

Good luck OP.

spockety

3DataModem wrote: »

Nice.

The first number will stay more or less level for 35 years.

The second number will probably be 10000 in 35 years.

Good luck OP.

10,000?? You are predicting that inflation will run at over 7% for 35 years!

If that is the case you can be sure that that current 900 euro mortgage repayment will not stay at 900 euro for long (assuming a variable rate mortgage), as interest rates are jacked significantly to attempt to combat that inflation rate.

3DataModem

spockety wrote: »

10,000?? You are predicting that inflation will run at over 7% for 35 years!

No, just about 6.8%.

In retrospect that was a little high - I'll correct.

billybigunz

Well done OP. You will probably lose over 100K but no harm once you are happy.

halkar

Congrats OP. You did not sign for house. You signed for home for you and your family. Love it, cherish it, enjoy it

tfitzgerald

halkar wrote: »

Congrats OP. You did not sign for house. You signed for home for you and your family. Love it, cherish it, enjoy it

i could not have said it better so i wont

angel01

Congratulations Hope it all goes well