We want to buy

LisaPol

Hi all, we have decided wed now like to buy. We know nothing. No idea if wed even be approved. Partner is in a permanent job, on 32k a year. Been there 5 years. Im almost two years self employed, tax exempt childminder on 15k. We have 13k deposit, and parents willing to lend another 5, hopefully have 20ish so. Have all our furniture. Renting four years, 1200 a month goes into rent account. 2 year old and another on the way. If we were to approach a bank, would partner be approved on his own, and how much are banks lending? Mortgages.ie calculater says hes get 156, would he though? Is two years long enough to be self employed at the moment, ive heard some places want three years accounts? What else do we need to know or take into account, pretty clueless!

Moonbeam

I think 156k is super optimistic.
Both of you are on low wages and they might not be able to take yours in to account.
I think you need to talk to the banks and see if they will give you a mortgage at all.

LisaPol

Ok, thanks. Frustrating since we would be better off with a mortgage of that size than paying the rent we pay.

RobAMerc

the way the housing market is going here and the economy, you may be much better off renting and keeping your flexibility rather than tying yourself to a depreciating asset. Also house ownership is much more expensive than renting .. relax and focus on having a good quality family life

kleefarr

See if you can negotiate a discount on the rent. There should be some flexibility, hopefully.

borderlinemeath

RobAMerc wrote: »

the way the housing market is going here and the economy, you may be much better off renting and keeping your flexibility rather than tying yourself to a depreciating asset. Also house ownership is much more expensive than renting .. relax and focus on having a good quality family life

This attitude annoys the hell out of me. Even if the OP and partner were on €100k+ per annum there would still be a poster who mentions 'depreciating assets' and getting 'tied down'.

Take into account that the OP is in a long term relationship with a child and another on the way and is looking for a home rather than an asset. Renting is fine for the young free and uncommitted that don't want to put down roots, but add a few kids into the mix and you start looking at areas for schools and somewhere that you can call your own without the bother of a landlord and the uncertainty that they may sell or get repossessed or worse still be a crappy landlord that deducts from a deposit for a stain on a carpet and refuses to get basics fixed.

OP it's a tall order to get a mortgage at the minute even with a decent income, but there's no harm in trying. Do your figures, don't overstretch yourself, look at how you'll pay back a mortgage with interest increases as they are currently quite low. Don't get suckered into a shoebox in a better area because it will always be a shoebox and the area may change. Stretch your boundaries and look for the biggest space possible for your buck because with an expanding family space matters a lot. Don't look for something to start with - if you seriously want to buy something it has to be long term, not just part of a plan. Just ask people who are stuck in little apartments that they bought as 'starter homes' and are stuck due to negative equity. Times have changed and it's a buyers market, but only because the banks lending habits have been reigned in.

StillWaters

RobAMerc wrote: »

Also house ownership is much more expensive than renting .. relax and focus on having a good quality family life

Thats not necessaily true.
If the OP gets a mortgage for €156,000, her repayments would be currently less than her rental payments. Even were interest rates to rise to 7%, based on a conservative 20 year mortgage, her repayments would only equal her current rental payments.

Were interest rates to average 7% over the course of the mortgage, the OP would pay about 300K over 20 years, the renter, allowing for a modest 2% annual increase in rent, would pay about €370K, even at an historically unheard of 1%, he still pays more than the OP.


Yes, there are costs associated with home ownership, property charge, buildings insurance, maintenance, but imo, this is compensated for by the fact that OP would have an asset at the end of 20 years, and the only ongoing costs would be these. Whereas the renter will continue to pay the adjusted €1,200 for the following 20+ years.

This is leaving out all the soft data, the comfort and security of your own house, not putting up with bad LLs (just have a read of some of the threads on here, you want to be dealing with that cr*p when you are 60?), security of a home for your children should something happen to you etc

When the maths work out that home ownership costs less or equal to renting (and it hasn't done so for quite a few years in Ireland), then for those whom home ownership suits, it's time to think about it.

Theboinkmaster

StillWaters wrote: »

Thats not necessaily true.
If the OP gets a mortgage for €156,000, her repayments would be currently less than her rental payments. Even were interest rates to rise to 7%, based on a conservative 20 year mortgage, her repayments would only equal her current rental payments.

Were interest rates to average 7% over the course of the mortgage, the OP would pay about 300K over 20 years, the renter, allowing for a modest 2% annual increase in rent, would pay about €370K, even at an historically unheard of 1%, he still pays more than the OP.


Yes, there are costs associated with home ownership, property charge, buildings insurance, maintenance, but imo, this is compensated for by the fact that OP would have an asset at the end of 20 years, and the only ongoing costs would be these. Whereas the renter will continue to pay the adjusted €1,200 for the following 20+ years.

This is leaving out all the soft data, the comfort and security of your own house, not putting up with bad LLs (just have a read of some of the threads on here, you want to be dealing with that cr*p when you are 60?), security of a home for your children should something happen to you etc

When the maths work out that home ownership costs less or equal to renting (and it hasn't done so for quite a few years in Ireland), then for those whom home ownership suits, it's time to think about it.

You've actually left out the largest immediate cost of ownership facing someone thinking of buying in today's market - depreciation.

RobAMerc

borderlinemeath wrote: »

This attitude annoys the hell out of me. Even if the OP and partner were on €100k+ per annum there would still be a poster who mentions 'depreciating assets' and getting 'tied down'.

Take into account that the OP is in a long term relationship with a child and another on the way and is looking for a home rather than an asset. Renting is fine for the young free and uncommitted that don't want to put down roots, but add a few kids into the mix and you start looking at areas for schools and somewhere that you can call your own without the bother of a landlord and the uncertainty that they may sell or get repossessed or worse still be a crappy landlord that deducts from a deposit for a stain on a carpet and refuses to get basics fixed.

This is very short sighted. If the OP buy's a house today that they could buy in a year or two for 50k less, thats 100k less they will have to pay the bank over the life of that mortgage. Does that sound nuts ? Or how bout when they are still paying that back at 70 rather than having paid the 100k less off already ?
Secondly, I am in a long term relationship with a kid and renting. My relationship is under no pressure because we have no roots and my child doesn't feel any less loved or secure in his home just because we don't own it. Do kids of rented houses not get into schools ? A nonsense argument, people have rented for years, the OP wont be charting new waters !
Thirdly - getting unnecessarily tied down to a property at a time when being as flexible and mobile as possible might better help you through these tough times is.

RobAMerc

StillWaters wrote: »

Thats not necessaily true.

Long term there are benefits to buying over renting of course. I didn't mean to suggest to the OP to never buy ( although re-reading my post it may look like that ). Putting themselves through the stress, both financial and mental of buying in the current climate is not imo a good idea.
I've owned 3 houses so far, and I can tell you home ownership is a lot more expensive than the monthly mortgage outlay, renting much less so. As for the deposit going because of a stain, try discover a leaking roof or even have your washing machine and fridge pack up in the same year - you'll wish it was only a months rent at stake.

StillWaters

Theboinkmaster wrote: »

You've actually left out the largest immediate cost of ownership facing someone thinking of buying in today's market - depreciation.

No I haven't. Even the most Bearish believe property prices have about 20% left to fall, and then to rise in line with inflation. The OP would STILL be better off than the renter were this to be the case.

borderlinemeath

RobAMerc wrote: »

This is very short sighted. If the OP buy's a house today that they could buy in a year or two for 50k less, thats 100k less they will have to pay the bank over the life of that mortgage. Does that sound nuts ? Or how bout when they are still paying that back at 70 rather than having paid the 100k less off already ?

Yeah it sure does sound nuts.:rolleyes: The OP is looking to get a mortgage for €156K MAX. So you're predicting now that if they buy a house in the region of €170k that next years depreciation on that particular house is going to be in the region of 30%??:D Even the most pessimistic of economists would disagree with you there.

Secondly, I am in a long term relationship with a kid and renting. My relationship is under no pressure because we have no roots and my child doesn't feel any less loved or secure in his home just because we don't own it. Do kids of rented houses not get into schools ? A nonsense argument, people have rented for years, the OP wont be charting new waters !
Thirdly - getting unnecessarily tied down to a property at a time when being as flexible and mobile as possible might better help you through these tough times is.

Not nonsense at all. And I never said a child would feel less loved:D, I don't know how you derived that from my post. Hilarious what you seem to be able to read into it.

I've just helped my sister move house after renting the same place for 8 years because the landlord is selling up. She's lost about a stone in weight with the worry of moving with a kid (and a dog) and finding somewhere suitable in the vicinity of school that my niece can easily get home by herself when she needs to. It's far from plain sailing. Moving home is one of the most stressful things you can ever do, so putting yourself in a position that is uncertain unless you can get a long term ie 10-15 year lease is why families want to buy homes. Not assets, so give up beating that drum as the OP wants to buy a home.

RobAMerc

borderlinemeath wrote: »

Yeah it sure does sound nuts.:rolleyes: The OP is looking to get a mortgage for €156K MAX. So you're predicting now that if they buy a house in the region of €170k that next years depreciation on that particular house is going to be in the region of 30%??:D Even the most pessimistic of economists would disagree with you there.




Not nonsense at all. And I never said a child would feel less loved:D, I don't know how you derived that from my post. Hilarious what you seem to be able to read into it.

I've just helped my sister move house after renting the same place for 8 years because the landlord is selling up. She's lost about a stone in weight with the worry of moving with a kid (and a dog) and finding somewhere suitable in the vicinity of school that my niece can easily get home by herself when she needs to. It's far from plain sailing. Moving home is one of the most stressful things you can ever do, so putting yourself in a position that is uncertain unless you can get a long term ie 10-15 year lease is why families want to buy homes. Not assets, so give up beating that drum as the OP wants to buy a home.

No one knows how much houses will drop over the next couple of years - a 30% drop over 2 years might sound nuts now - but a 65% drop over 5 years sounded inconceivable 5 years ago ! And we are no where near the end of the economic sh1t storm we find ourselves in. We also have NAMA propping up prices by hoarding thousands of properties that if allowed onto the market will cause major price drops, banks haven't started repossessions ( another factor in house price drops to come ), rent supplement is way above a sustainable level - also going to hit values when they drop it, not to mention the property taxes to come ( people won't be so keen to value their gaffs at 2006 levels when they are paying tax on it ) and lastly the property price database so we can see what houses are really selling for.
With all this you claim taking out a mortgage and buying a house is less stressful than the chance a landlord might want them to move on at some point ? btw - the OP never mentioned it as a factor so they maybe happy where they are and feel secure.
Judging by your aggressive tone and head in the sand attitude, I think you may be in an unhappy position yourself and are encouraging the OP to join you !

borderlinemeath

RobAMerc wrote: »

No one knows how much houses will drop over the next couple of years - a 30% drop over 2 years might sound nuts now - but a 65% drop over 5 years sounded inconceivable 5 years ago ! And we are no where near the end of the economic sh1t storm we find ourselves in. We also have NAMA propping up prices by hoarding thousands of properties that if allowed onto the market will cause major price drops, banks haven't started repossessions ( another factor in house price drops to come ), rent supplement is way above a sustainable level - also going to hit values when they drop it, not to mention the property taxes to come ( people won't be so keen to value their gaffs at 2006 levels when they are paying tax on it ) and lastly the property price database so we can see what houses are really selling for.
With all this you claim taking out a mortgage and buying a house is less stressful than the chance a landlord might want them to move on at some point ? btw - the OP never mentioned it as a factor so they maybe happy where they are and feel secure.
Judging by your aggressive tone and head in the sand attitude, I think you may be in an unhappy position yourself and are encouraging the OP to join you !

^^:D:D

Aggressive tone? Because I disagree with you? You make a blanket assumption on where you think property prices, when viewed as assets may be going and because I call you on it I'm aggressive:rolleyes:

You have no idea of my position. So making assumptions of it is laughable. I'm very happy with my living arrangements and yes I own a property.

The OP doesn't need encouragement, just have a look at the thread title;).

daltonmd

borderlinemeath wrote: »

Take into account that the OP is in a long term relationship with a child and another on the way and is looking for a home rather than an asset.

With respect - I kinda hate this attitude. Plenty of people who rent are in long term relationships, plenty have children. Contemplating home ownership is a huge risk now and people are entitled to give theri opinion, if that opinion doesn't sit well with you then fine - but this old fashioned attitude to renting is tiring now.

borderlinemeath wrote: »

Renting is fine for the young free and uncommitted that don't want to put down roots, but add a few kids into the mix and you start looking at areas for schools and somewhere that you can call your own without the bother of a landlord and the uncertainty that they may sell or get repossessed or worse still be a crappy landlord that deducts from a deposit for a stain on a carpet and refuses to get basics fixed.

See above - renting is a perfectly acceptable way to live and the best thing that ever happened to the rental market in this country was the house price crash. Just because these things bother YOU doesn't mean that every renter has your priorities.

Most people would eventually like to own their own homes - but not at any cost. It isn't only about the monthly cost of owning a home, not in this climate - it's whether you can pay for it in 5 years - can you tell us what the property charge will be? Can you tell us what interest rates will be? Can you tell us if the OP's husband will have a job?

Personally I'd rather be looking at my money than looking for it.

The upshot of renting is that you can scale down, move to other areas to get a job - it is, as someone pointed out, flexible.
When you have a mortgage you are not, it's that simple. Until we get the database of property prices and until the economy is in better shape then buying rather than renting because of the difference in monthly payments is really a bad idea - in my opinion of course.

borderlinemeath

daltonmd wrote: »

With respect - I kinda hate this attitude. Plenty of people who rent are in long term relationships, plenty have children. Contemplating home ownership is a huge risk now and people are entitled to give theri opinion, if that opinion doesn't sit well with you then fine - but this old fashioned attitude to renting is tiring now.




See above - renting is a perfectly acceptable way to live and the best thing that ever happened to the rental market in this country was the house price crash. Just because these things bother YOU doesn't mean that every renter has your priorities.

Most people would eventually like to own their own homes - but not at any cost. It isn't only about the monthly cost of owning a home, not in this climate - it's whether you can pay for it in 5 years - can you tell us what the property charge will be? Can you tell us what interest rates will be? Can you tell us if the OP's husband will have a job?

Personally I'd rather be looking at my money than looking for it.

The upshot of renting is that you can scale down, move to other areas to get a job - it is, as someone pointed out, flexible.
When you have a mortgage you are not, it's that simple. Until we get the database of property prices and until the economy is in better shape then buying rather than renting because of the difference in monthly payments is really a bad idea - in my opinion of course.

Well I see it from both sides. Members of my family rent and the uncertainty is very unsettling for them. Other members of my family own their own homes and are perfectly happy in their situations. Some people don't want what you perceive as flexibility. Some people call it uncertainty.

If you look back to my first post I told the OP to do her figures and work out what repayments would be with higher interest rates. She has already stated she wanted to buy and I doubt she's had her head in the sand for the past 5 years.

Yes prices may decrease but to some people that is the price you pay for home ownership. In the 80s interest rates were sky high so while house prices didn't fall, the overall cost of home ownership increased but this didn't put people off buying homes. Not assets.

daltonmd

borderlinemeath wrote: »

Well I see it from both sides. Members of my family rent and the uncertainty is very unsettling for them. Other members of my family own their own homes and are perfectly happy in their situations. Some people don't want what you perceive as flexibility. Some people call it uncertainty.

The homeowners have no choice as they cannot sell, unlike the renters, who may feel unsettled but are still renting despite it.

You think you see it from both sides because for whatever reasons your family members have, this is where they are - but the reality, not perception, is that the homeowner can't get out of his home and the renter isn't in NE - they may feel a little rattled - but that's it.

It is a fact, not a perception, that renting is flexible. It isn't about the old renting V buying arguments anymore - I suppose that's my point. It is simply about whether people will be able to afford the homes that they buy today in 5 years time. How many people who bought in 2007 regret it?

At the moment interest rates are as low as they are going to be for a very long time - in a "normal healthy poperty market" interest rates should be 6/7% - now we have zombie banks, broken banks - in 5 years time god only knows what we'll be looking at.

borderlinemeath wrote: »

In the 80s interest rates were sky high so while house prices didn't fall, the overall cost of home ownership increased but this didn't put people off buying homes. Not assets.

We didn't come out of the mother of all booms. In the 80's we had falling interest rates - now they're rising. In the 80's we had falling unemployment, it's now at best static, we had rising disposable incomes, now they're falling, we had falling tax rates, now they're rising - house prices were increasing and the cost of homeownership was falling - it's for this very reason that people need to be careful - and careful about comparing it to a time that held the exact opposite than what the next 5 years hold for this country.

Edit to add - Interest rates have not started rising but they have to.

Monty Burnz

StillWaters wrote: »

No I haven't. Even the most Bearish believe property prices have about 20% left to fall, and then to rise in line with inflation. The OP would STILL be better off than the renter were this to be the case.

The most bearish believe that the price of property will fall to zero, and we'll be living in the mountains with shot-guns in a post-hydrocarbon, famine-stricken apocalypse.

There are plenty of good arguments around that suggest that prices could easily halve again from here. I think prices probably will fall another 20-30% from today's levels, but then again I'm an optimist - back in 2006 I thought prices would only fall about 30% too.

iguana

borderlinemeath wrote: »

Take into account that the OP is in a long term relationship with a child and another on the way and is looking for a home rather than an asset. Renting is fine for the young free and uncommitted that don't want to put down roots, but add a few kids into the mix and you start looking at areas for schools and somewhere that you can call your own without the bother of a landlord and the uncertainty that they may sell or get repossessed or worse still be a crappy landlord that deducts from a deposit for a stain on a carpet and refuses to get basics fixed.

Don't be ridiculous. I'm married with dogs and a baby due later in the year and there is no way on earth I'd buy now as it would be a horrible financial decision. Part of my duty as a parent is to ensure the best life for my child and taking on a large debt for an item worth about a third of what I'd be paying would only mean that in later years I have less for my child. Renting with children might not be ideal but at the end of the day it makes almost no difference whatsoever to the baby. What will make a difference is having an extremely comfortable financial position in a few years time, where I don't have to worry about money and can afford to pay for the education I want my child to have as I'm not pissing that money away each month on an overpriced mortgage.

Zamboni

borderlinemeath wrote: »

This attitude annoys the hell out of me. Even if the OP and partner were on €100k+ per annum there would still be a poster who mentions 'depreciating assets' and getting 'tied down'.

Take into account that the OP is in a long term relationship with a child and another on the way and is looking for a home rather than an asset. Renting is fine for the young free and uncommitted that don't want to put down roots, but add a few kids into the mix and you start looking at areas for schools and somewhere that you can call your own without the bother of a landlord and the uncertainty that they may sell or get repossessed or worse still be a crappy landlord that deducts from a deposit for a stain on a carpet and refuses to get basics fixed.

Children that grow up in rented accomodation will have a far better appreciation that mobility is a valuable commodity in context of a global labour market.
They will realise that they should seek opportunity rather than wait and expect opportunity to come to them.
They will learn how to change social circles and deal with loss and become adaptable.
They will be exposed to the practice of negotiation and managing business relationships with business partners.
Most importantly, they will learn that permanence is not a realistic concept or expectation.

Francie Barrett

LisaPol wrote: »

Hi all, we have decided wed now like to buy. We know nothing. No idea if wed even be approved. Partner is in a permanent job, on 32k a year. Been there 5 years. Im almost two years self employed, tax exempt childminder on 15k. We have 13k deposit, and parents willing to lend another 5, hopefully have 20ish so. Have all our furniture. Renting four years, 1200 a month goes into rent account. 2 year old and another on the way. If we were to approach a bank, would partner be approved on his own, and how much are banks lending? Mortgages.ie calculater says hes get 156, would he though? Is two years long enough to be self employed at the moment, ive heard some places want three years accounts? What else do we need to know or take into account, pretty clueless!

I have recently bought a house, I used AIB to source the mortgage. Personally, I wouldn't bother with a broker, so few institutions are giving a decent deal, that it's quickest to just schedule appointments yourself. AIB, Bank of Ireland, Ulster Bank and NIB were the only ones who really seem to be interested. I wouldn't pay any attention to that online calculator either, those figures are made up.

First thing, you will need to make sure than you have a 10% deposit at very minimum (some banks look for a savings history, in my case, AIB just wanted a statement with the account balance). Second thing, then you need to make sure you have all the documentation intact and that you have no black marks on your credit record. Have you gotten your credit report from the ICB (www.icb.ie), I suggest you do so. Not sure what the self-employed route is like, but I never heard of anyone needing as many as 3 years of account, I could be wrong though.

Francie Barrett

iguana wrote: »

there is no way on earth I'd buy now as it would be a horrible financial decision.

It's all relative.

I just bought my house at over 60% off peak with a 25 year mortgage that's around 3 times my salary. My repayments are less than the rent and I am actually going to be paying off the house, rather handing it over to a landlord.

Francie Barrett

Zamboni wrote: »

Children that grow up in rented accomodation will have a far better appreciation that mobility is a valuable commodity in context of a global labour market.

I can only speak for myself, but I certainly didn't think of that as a kid.

daltonmd

Francie Barrett wrote: »

It's all relative.

I just bought my house at over 60% off peak with a 25 year mortgage that's around 3 times my salary. My repayments are less than the rent and I am actually going to be paying off the house, rather handing it over to a landlord.

Can I ask what interest rate you got and for how long? Because your mortgage (Excluding property tax, water charges, maintainance, interest) is lower than your rent now - but what about when your fixed rate is finished?

LisaPol

Thanks for the replies everyone, its certainly given us lots to think about anyway :-)

borderlinemeath

Fair enough. All you people who rent and love the freedom and flexibility of it all.

Look ahead to the future if you may. You're not buying a property now, hell no. Save your money, hold off, maybe 5 years, maybe 10 years. When you go to purchase your property you will take out a mortgage, maybe 20, maybe 25, maybe even a 30 year mortgage. Maybe you will never buy and will continue to rent for as long as you can.

Now, here's my question. When you're of a pensionable age, ie 60/65, maybe 70 where will you live if you haven't bought a home? Do you expect the state to accomodate you? Do you expect your children to have you live with them as they tend to do in mainland Europe?

My mortgage will be paid off by the time I'm 50 as will my OHs properties. That's not all that far away and we will have the certainty that we don't have to rely on family or the state to house us.

borderlinemeath

Zamboni wrote: »

Children that grow up in rented accomodation will have a far better appreciation that mobility is a valuable commodity in context of a global labour market.
They will realise that they should seek opportunity rather than wait and expect opportunity to come to them.
They will learn how to change social circles and deal with loss and become adaptable.
They will be exposed to the practice of negotiation and managing business relationships with business partners.
Most importantly, they will learn that permanence is not a realistic concept or expectation.

They're kids ffs. They will not be behaving like you suggest.

All they'll care about is whether they get they're place on the local football team or if they're living close by to their friends.

The kids you describe are like those child prodigy types that make it to the final of countdown age 10.:D

Francie Barrett

daltonmd wrote: »

Can I ask what interest rate you got and for how long? Because your mortgage (Excluding property tax, water charges, maintainance, interest) is lower than your rent now - but what about when your fixed rate is finished?

I am on a variable rate of 3.04%. I don't want to give my exact details, but my mortgage is nearly 3/4's what my rent was. By using the money I have saved, I think I can be mortgage free in 16 years.

Bigcheeze

Francie Barrett wrote: »

I can only speak for myself, but I certainly didn't think of that as a kid.

Traveller kids have a far better appreciation that mobility is a valuable commodity in context of a global labour market.

Francie Barrett

Bigcheeze wrote: »

Traveller kids have a far better appreciation that mobility is a valuable commodity in context of a global labour market.

Busted :P

iguana

borderlinemeath wrote: »

Fair enough. All you people who rent and love the freedom and flexibility of it all.

Look ahead to the future if you may. You're not buying a property now, hell no. Save your money, hold off, maybe 5 years, maybe 10 years. When you go to purchase your property you will take out a mortgage, maybe 20, maybe 25, maybe even a 30 year mortgage. Maybe you will never buy and will continue to rent for as long as you can.

Now, here's my question. When you're of a pensionable age, ie 60/65, maybe 70 where will you live if you haven't bought a home? Do you expect the state to accomodate you? Do you expect your children to have you live with them as they tend to do in mainland Europe?

My mortgage will be paid off by the time I'm 50 as will my OHs properties. That's not all that far away and we will have the certainty that we don't have to rely on family or the state to house us.

Seriously? You realise that by buying a cheaper house you have a lower mortgage not a bigger one right? It's pretty basic maths. Personally I see myself buying for cash in 2-5 years.

borderlinemeath

iguana wrote: »

Seriously? You realise that by buying a cheaper house you have a lower mortgage not a bigger one right? It's pretty basic maths. Personally I see myself buying for cash in 2-5 years.

Well done for being in a position to be a cash buyer. It's not everybody can do it. But I still think my question is valid for the majority of people who rent and have no inclination to own a home.

daltonmd

borderlinemeath wrote: »

Fair enough. All you people who rent and love the freedom and flexibility of it all.

Look ahead to the future if you may. You're not buying a property now, hell no. Save your money, hold off, maybe 5 years, maybe 10 years. When you go to purchase your property you will take out a mortgage, maybe 20, maybe 25, maybe even a 30 year mortgage. Maybe you will never buy and will continue to rent for as long as you can.

Now, here's my question. When you're of a pensionable age, ie 60/65, maybe 70 where will you live if you haven't bought a home? Do you expect the state to accomodate you? Do you expect your children to have you live with them as they tend to do in mainland Europe?

My mortgage will be paid off by the time I'm 50 as will my OHs properties. That's not all that far away and we will have the certainty that we don't have to rely on family or the state to house us.

I don't think you get it BLM - it isn't about loving the freedom - its about making the best financial decision for yourself and your family.

I will do what others in my postion will do - I will probably buy a similiar home to you, for a fraction of the price, for cash. I will do it way before I'm 50 by the way.

But that's not the point - the point is that people are still buying now because it's "cheaper than renting". Which may be true on a short term basis and true over the term of a 30 year mortgage - but for now and in the coming 5 years it's my opinion that it is not the right time.

daltonmd

borderlinemeath wrote: »

Well done for being in a position to be a cash buyer. It's not everybody can do it. But I still think my question is valid for the majority of people who rent and have no inclination to own a home.

No it's not a valid question. Why would you presume firstly, that everyone who's renting doesn't want to buy - ever.

If they choose not to then why would you think that they would need torely on family or the state when they are older?

Maybe instead of investing in property they invested in something else which can give them a secure income?

borderlinemeath

daltonmd wrote: »

I don't think you get it BLM - it isn't about loving the freedom - its about making the best financial decision for yourself and your family.

And for some people the best decision for them is to buy a home.

I will do what others in my postion will do - I will probably buy a similiar home to you, for a fraction of the price, for cash. I will do it way before I'm 50 by the way.

I doubt very much you'll buy a house similar to mine. Maybe you'll buy something for a fraction of the price, maybe you won't. I'm probably far closer to 50 than you though, as I don't have long left to pay on my mortgage. Lots of cash rich people on boards it seems!:D

But that's not the point - the point is that people are still buying now because it's "cheaper than renting". Which may be true on a short term basis and true over the term of a 30 year mortgage - but for now and in the coming 5 years it's my opinion that it is not the right time.

Again, your opinion. For others it's the right time to buy.

No it's not a valid question. Why would you presume firstly, that everyone who's renting doesn't want to buy - ever.

It is a valid question. Are you telling me what I can and cannot ask on boards now?

If they choose not to then why would you think that they would need torely on family or the state when they are older?

Maybe instead of investing in property they invested in something else which can give them a secure income?

Maybe you haven't noticed but it's not just the property market that has gone belly up in the past 5 years. Private pensions have been decimated and shares have fallen through the floor. There's no investments that give a decent return that don't have a substantial risk involved.

iguana

borderlinemeath wrote: »

And for some people the best decision for them is to buy a home.

Arguably on an emotional level but unless they have managed to get a very, very, very good price for the house it is not the best financial decision. Maths is not subjective.

RobAMerc

borderlinemeath wrote: »

Look ahead to the future if you may. You're not buying a property now, hell no. Save your money, hold off, maybe 5 years, maybe 10 years. When you go to purchase your property you will take out a mortgage, maybe 20, maybe 25, maybe even a 30 year mortgage. Maybe you will never buy and will continue to rent for as long as you can.

Now, here's my question. When you're of a pensionable age, ie 60/65, maybe 70 where will you live if you haven't bought a home? Do you expect the state to accomodate you? Do you expect your children to have you live with them as they tend to do in mainland Europe?

I really don't think you are getting it. If the OP buy's in 5 years and house prices have fallen another 50% off today's values, then they will only need borrow 70k rather than 140k - and will only have to pay back 140k rather than 280K - they could pay that off in 10 rather than 20 years so would they be better off ? No one said never buy, or even wait 10 years unless prices keep falling.
All hypothetical of course, but all indicators are that prices are only going one way at the moment ( despite some vested interests best efforts ).

I can see from your posts you are heavily invested in the housing market, if it's going well for you I am genuinely happy. But I think my original accusation that you are trying to talk up home ownership and ergo the property market stand.

StillWaters

So now we have a 50% fall projection?

Those speaking for doing the maths and buying now if it stacks up, are not necessarily speaking from a vested interest viewpoint, but they are being contrarian. And sometimes, like during the bubble, the contrarians are right.

listermint

borderlinemeath wrote: »

Maybe you haven't noticed but it's not just the property market that has gone belly up in the past 5 years. Private pensions have been decimated and shares have fallen through the floor. There's no investments that give a decent return that don't have a substantial risk involved.

Which is why its bewildering that you are telling someone to buy property? Its not the right time to invest.

TBH OP, if i was in your situation i would certainly not be looking for property. Il be as candid as i can, your wages are not that high or your partners. It would not be a comfortable option, Perhaps seeking to reduce your existing rent or move to somewhere that has an acceptable rent level would be first port of call. There are plenty of excellent rental propertys out there lower than what you are paying.

Secondly what about improving your self financially, You can save the extra cash for a future deposit or perhaps seek to further education to upscale your salary expectations.

I would take everything Borderline is saying with a massive pinch of salt. As they appear to have some form of property portfolio. And i can guarantee you they havent built it from the salary position you are on. We do not know their starter situation.


For me you are over stretching yourself 'currently' and this is really not necessary. You are not 'missing out' on anything. You will have a larger deposit and lower house prices if you hold of that much is a fact. And for anyone that things prices are bottoming out they are hilariously insane. We are not out of the woods yet. We have major global issues with the potential for the US to falter yet, perhaps another war coming affecting global oil prices. For me that uncertainty is enough to push the boat out.

And please disregard that crap about paying for it till you 70 or some other snake oil borderline was selling because thats tripe.

RobAMerc

StillWaters wrote: »

So now we have a 50% fall projection?

I think you are trying to pick and choose what you are arguing against here rather than see the point of my whole post.

As I stated it is - "hypothetical" - however, it's not inconceivable that it could happen.
No one believed we would be down 60% odd from the peak and we are there now and there is little sign of it stopping.
My point is unless there is a halt or at least 2 quarters or sustained growth in the property and economy you have no idea if we are anywhere near the bottom, so it's a bad time to buy.

LisaPol

listermint wrote: »

borderlinemeath wrote: »

Maybe you haven't noticed but it's not just the property market that has gone belly up in the past 5 years. Private pensions have been decimated and shares have fallen through the floor. There's no investments that give a decent return that don't have a substantial risk involved.

Which is why its bewildering that you are telling someone to buy property? Its not the right time to invest.

TBH OP, if i was in your situation i would certainly not be looking for property. Il be as candid as i can, your wages are not that high or your partners. It would not be a comfortable option, Perhaps seeking to reduce your existing rent or move to somewhere that has an acceptable rent level would be first port of call. There are plenty of excellent rental propertys out there lower than what you are paying.

Secondly what about improving your self financially, You can save the extra cash for a future deposit or perhaps seek to further education to upscale your salary expectations.

I would take everything Borderline is saying with a massive pinch of salt. As they appear to have some form of property portfolio. And i can guarantee you they havent built it from the salary position you are on. We do not know their starter situation.


For me you are over stretching yourself 'currently' and this is really not necessary. You are not 'missing out' on anything. You will have a larger deposit and lower house prices if you hold of that much is a fact. And for anyone that things prices are bottoming out they are hilariously insane. We are not out of the woods yet. We have major global issues with the potential for the US to falter yet, perhaps another war coming affecting global oil prices. For me that uncertainty is enough to push the boat out.

And please disregard that crap about paying for it till you 70 or some other snake oil borderline was selling because thats tripe.

I have a level 8 degree, Im choosing to stay at home with the kids, and I am earning as much as I would be by working full time while paying childcare. With the bonus of bringing up the baby myself. We dont feel overstretched, Roughly 800eu per week, or a little more coming in, and paying 300 a week rent, which leaves us with 500 per week bills etc. I actually feel were in a better position than a lot of others are at the moment.

listermint

LisaPol wrote: »

I have a level 8 degree, Im choosing to stay at home with the kids, and I am earning as much as I would be by working full time while paying childcare. With the bonus of bringing up the baby myself. We dont feel overstretched, Roughly 800eu per week, or a little more coming in, and paying 300 a week rent, which leaves us with 500 per week bills etc. I actually feel were in a better position than a lot of others are at the moment.

Thats fair enough.

Personally I cant see you getting loan approval under present market conditions, if you do then it will be for much less than 150K, I know this as I know people on more than you with good credit history that have been offered pretty paultry mortgages.

Can you wait another 18 months? This will give you more savings etc. Why do you feel forced to buy right now?

Theboinkmaster

This thread is quite depressing and just goes to show not much has changed since the bubble. Some people seems to have no basic concept of basic economics & maths :rolleyes:

Most (there may be some exceptions but applies to the majority) people buying for the first time now are ignorant fools and just the type in few years to be demanding a bailout.

borderlinemeath

listermint wrote: »

Which is why its bewildering that you are telling someone to buy property? Its not the right time to invest.

If you read my point in context it referred to pensions and shares. Both of which have been decimated not just in Ireland but worldwide. At least with property you have something at the end of it. I know plenty of people who lost hundreds of thousands in pensions and are glad to have a roof over their head.

TBH OP, if i was in your situation i would certainly not be looking for property. Il be as candid as i can, your wages are not that high or your partners. It would not be a comfortable option, Perhaps seeking to reduce your existing rent or move to somewhere that has an acceptable rent level would be first port of call. There are plenty of excellent rental propertys out there lower than what you are paying.

The OP hasn't said where they are living so nobody is in a positon to say there are excellent rental properties in the area she wants to be in only herself.

Secondly what about improving your self financially, You can save the extra cash for a future deposit or perhaps seek to further education to upscale your salary expectations.

Nice how you assume the OP was undereducated because she wanted to purchase a property:rolleyes:

I would take everything Borderline is saying with a massive pinch of salt. As they appear to have some form of property portfolio. And i can guarantee you they havent built it from the salary position you are on. We do not know their starter situation.

Just because I have property some posters assume I have vested interests in the area. It matters not a jot to me whether an anonymous poster, somewhere in Ireland buys or doesn't buy a house. In fact, if you look at it, isn't it better for landlords if the rental market stays stagnant as renters wait and wait and wait for property prices to fall or NAMA to put it's supply on the market?

For me you are over stretching yourself 'currently' and this is really not necessary. You are not 'missing out' on anything. You will have a larger deposit and lower house prices if you hold of that much is a fact. And for anyone that things prices are bottoming out they are hilariously insane. We are not out of the woods yet. We have major global issues with the potential for the US to falter yet, perhaps another war coming affecting global oil prices. For me that uncertainty is enough to push the boat out.

I agree with you somewhat, I do think that €1200 a month is on the high side for a home for 2 adults/1.5 children, unless it's in one of the nicer areas in Dublin.

And please disregard that crap about paying for it till you 70 or some other snake oil borderline was selling because thats tripe.

If the government has their way, the workforce will be going until their 68. I for one don't believe debt forgiveness will be implemented on a carte blanche basis, banks will work with customers on a case by case basis. The banks, for sure, will not lose out, so a renegotiation on terms such as an extension to current mortgages being a compromise for most. As it stands there's plenty of 30 year mortgages floating around that consumers will be stuck with till they're in their 60s.

daltonmd

borderlinemeath wrote: »

And for some people the best decision for them is to buy a home.

But is it the best financial decision? You can't say whether or not it is, you cannot say how much further house prices will fall, how much interest rates will be in 5 years time, how much property tax/water charges will be and how much disposable income will be.

borderlinemeath wrote: »

I doubt very much you'll buy a house similar to mine. Maybe you'll buy something for a fraction of the price, maybe you won't. I'm probably far closer to 50 than you though, as I don't have long left to pay on my mortgage. Lots of cash rich people on boards it seems!:D

No, lots of mortgage free people here and you have absolutely no idea what I am in a position to buy - but one thing is for certain, if you biught in the boom then I and many like me could buy a similiar house to yours for a fraction of the price. That is fact.

borderlinemeath wrote: »

Again, your opinion. For others it's the right time to buy.

In the short term maybe - on a monthly comparison to rent maybe - but it is not a good financial decision in such uncertain times.

borderlinemeath wrote: »

It is a valid question. Are you telling me what I can and cannot ask on boards now?

borderlinemeath wrote: »

Now, here's my question. When you're of a pensionable age, ie 60/65, maybe 70 where will you live if you haven't bought a home? Do you expect the state to accomodate you? Do you expect your children to have you live with them as they tend to do in mainland Europe?

In the context which you asked it is not a valid question. On one hand you tell people to "look to the future if you may", and then completely jump ahead 25/30 years to prove some invalid point - people need to look 5 years ahead to see if they can still afford the mortgage first.

borderlinemeath wrote: »

Maybe you haven't noticed but it's not just the property market that has gone belly up in the past 5 years. Private pensions have been decimated and shares have fallen through the floor. There's no investments that give a decent return that don't have a substantial risk involved.

And in case you haven't noticed we've just come out of the mother of all property bubbles and it's this short sighted, don't worry about the future that got a lot of people into trouble, people which at some point are going to have to get a write down of some description.

There is never the right time to make the wrong decision and those who bought during the boom know this only too well.

borderlinemeath

daltonmd wrote: »

But is it the best financial decision? You can't say whether or not it is, you cannot say how much further house prices will fall, how much interest rates will be in 5 years time, how much property tax/water charges will be and how much disposable income will be.

And you don't know what rent will be in 5 years time.

No, lots of mortgage free people here and you have absolutely no idea what I am in a position to buy - but one thing is for certain, if you biught in the boom then I and many like me could buy a similiar house to yours for a fraction of the price. That is fact.

I didn't buy in the boom, so I doubt it. Houses where I live don't come up for sale very often and when they do it's hard to compare as they're all individual country houses, but they haven't fallen anywhere near as much as an average 3 bed semi in an estate.

In the short term maybe - on a monthly comparison to rent maybe - but it is not a good financial decision in such uncertain times

Nothing is a good financial decision these days. Nothing. Buying a car, taking a holiday, (considered wasteful and indulgent by some) changing jobs if there's a bigger salary but more risk, paying into a pension, whatever you do on a day to day basis is costing money. But for some people buying a home NOW is what they want to do. And who are you or I to stop them. If they pay an extra €10k in purchase price they may write it off as they may have spent the best years of their life in the house they bought.
.

In the context which you asked it is not a valid question. On one hand you tell people to "look to the future if you may", and then completely jump ahead 25/30 years to prove some invalid point - people need to look 5 years ahead to see if they can still afford the mortgage first.

And if you look at my very first post I told the OP to do her figures as interest rates were at an all time low and to calculate repayments based on higher rates.

And in case you haven't noticed we've just come out of the mother of all property bubbles and it's this short sighted, don't worry about the future that got a lot of people into trouble, people which at some point are going to have to get a write down of some description.

There is never the right time to make the wrong decision and those who bought during the boom know this only too well.

The boom was crazy, the dogs in the street knew it, we had money and we were looking at friends of ours buying shoeboxes for big money and scratching our heads in disbelief. Now prices are far more realistic and if a property is priced right then it can be the right decision depending on the person buying.

daltonmd

borderlinemeath wrote: »

And you don't know what rent will be in 5 years time.

No I don't, but I can move, scale down, change location. If you buy an god firbid there's a job loss or an illness? All I am saying is factor in these things before committing to a 30 year mortgage.

borderlinemeath wrote: »

Nothing is a good financial decision these days. Nothing. Buying a car, taking a holiday, (considered wasteful and indulgent by some) changing jobs if there's a bigger salary but more risk, paying into a pension, whatever you do on a day to day basis is costing money.

But they are not for 30 years. You are comparing the purchase of a home, without question the largest purchase a person will make in their entire lives, with buying a car?

borderlinemeath wrote: »

But for some people buying a home NOW is what they want to do. And who are you or I to stop them. If they pay an extra €10k in purchase price they may write it off as they may have spent the best years of their life in the house they bought.

What they want and what they are in a viable financial position to do is not the same thing. Irish people have proven to be most incompetant when dealing with their finances. And if they are trapped in a home they can't afford in 5 years? Hardly the best years now are they?

borderlinemeath wrote: »

And if you look at my very first post I told the OP to do her figures as interest rates were at an all time low and to calculate repayments based on higher rates.

It was way after "This attitude annoys the hell out of me."

borderlinemeath wrote: »

The boom was crazy, the dogs in the street knew it, we had money and we were looking at friends of ours buying shoeboxes for big money and scratching our heads in disbelief. Now prices are far more realistic and if a property is priced right then it can be the right decision depending on the person buying.

It isn't about what price the property is - it's about whether or not the people buying it will be able to afford it in 2/3/5 years. The reasons have been posted here time and time again. Rising taxes, falling disposable income, falling house prices, rising interest rates.

I posted here before that when considering affordibility people need to stress to the highest interest rate (at least 7%), take out one income (in case of illness, pregnancy, god forbid a childrens illness) and then see what you are left with.

With one income of 32k and a family to support then this is simply too much to repay a 156k mortgage - as someone suggested they should move to a smaller cheaper house, save like mad and they will get a suitable family home that they can better afford in 12 months from now - because of a lower price and increased savings.

listermint

borderlinemeath wrote: »

Nice how you assume the OP was undereducated because she wanted to purchase a property:rolleyes:

No buddy, you assumed that as per your post above.....

I looked at the wages that were commanded. Its quite plausible to assume based on the wages that someone hasnt gone to higher education.

I addressed that with the OP.


your turn...

Zamboni

LisaPol wrote: »

Hi all, we have decided wed now like to buy. We know nothing. No idea if wed even be approved. Partner is in a permanent job, on 32k a year. Been there 5 years. Im almost two years self employed, tax exempt childminder on 15k. We have 13k deposit, and parents willing to lend another 5, hopefully have 20ish so. Have all our furniture. Renting four years, 1200 a month goes into rent account. 2 year old and another on the way. If we were to approach a bank, would partner be approved on his own, and how much are banks lending? Mortgages.ie calculater says hes get 156, would he though? Is two years long enough to be self employed at the moment, ive heard some places want three years accounts? What else do we need to know or take into account, pretty clueless!

I think you should look at the market in five years time (based on the assumption that you are only having two children).
Considering there is a baby boom it would be naieve to assume a place in a local school if you bought now.
At that stage, you will know into which primary schools your children have been accepted.
If you only have two children, it will mean that you will be free to double or triple you income by taking up either full time employment or even run your own childcare facility. Obviously a growing business in a baby boom
It also gives you five years to build up a substantial deposit.
Your partner has five years to potentially further his career/salary.

I am assuming you are in a nice location on €1,200 monthly rent.
This suggestion might be the trade off between maintaining your current quality of life and patience.
Good luck whatever you choose to do.

Francie Barrett

Theboinkmaster wrote: »

This thread is quite depressing and just goes to show not much has changed since the bubble. Some people seems to have no basic concept of basic economics & maths :rolleyes:

Most (there may be some exceptions but applies to the majority) people buying for the first time now are ignorant fools and just the type in few years to be demanding a bailout.

So I am an ignorant fool because I bought a house I can comfortably afford at conditions that are historically fair?

StillWaters

Francie Barrett wrote: »

So I am an ignorant fool because I bought a house I can comfortably afford at conditions that are historically fair?

Don't feel too bad, there are quite a few of us economically illiterate ignorant fools here who can't do the maths for ourselves and our families.