Living with parents \ Buy or wait

KnowingWind

Looking for discussion on my options, may help other in similar situation.

I have been living with the mammy for various reasons which is obviously not ideal. Im in my thirties.

I have mortgage approval for 265k and a deposit of 370k saved.

Initially, I just got mortgage approval in case needed, but plan was to buy something outright.
Then, I had second thoughts and decided to avail of cheap money and get a small enough mortgage to buy something in 300-400 range.
Then I had second thoughts as there really isnt much value in this bracket, so considered buying something at 500k plus while mortgaging myself.
And now, here I am thinking the market is about to collapse and everything is about to get a whole lot cheaper, maybe I should hold on a bit longer.

So my options are...
1. Buy something now for cash outright.
2. Buy something now for 500k range with a mortgage.
3. Buy something for 300k range with mortgage and keeping some saving to other assets.
4. Wait.

I cant help think 4 is most prudent but I dont want to. Thoughts please.

antimatterx

370K saved :eek:

Fair play.

bobbyy gee

I would wait where do you want to buy it makes a big difference in prices try and buy 3 bedroom so you don't have to move in 3 years
Alot of jobs could be lost in coming recession

Dublin sold houses to compare prices


https://www.propertypriceregister.ie/website/npsra/PPR/npsra-ppr.nsf/PPR-By-Date&Start=1&Query=%5Bdt_execution_date%5D%3E=01/08/2020%20AND%20%5Bdt_execution_date%5D%3C01/10/2020%20AND%20%5Bdc_county%5D=Dublin&County=Dublin&Year=2020&StartMonth=08&EndMonth=09&Address=

Danzy

KnowingWind wrote: »

Looking for discussion on my options, may help other in similar situation.

I have been living with the mammy for various reasons which is obviously not ideal. Im in my thirties.

I have mortgage approval for 265k and a deposit of 370k saved.

Initially, I just got mortgage approval in case needed, but plan was to buy something outright.
Then, I had second thoughts and decided to avail of cheap money and get a small enough mortgage to buy something in 300-400 range.
Then I had second thoughts as there really isnt much value in this bracket, so considered buying something at 500k plus while mortgaging myself.
And now, here I am thinking the market is about to collapse and everything is about to get a whole lot cheaper, maybe I should hold on a bit longer.

So my options are...
1. Buy something now for cash outright.
2. Buy something now for 500k range with a mortgage.
3. Buy something for 300k range with mortgage and keeping some saving to other assets.
4. Wait.

I cant help think 4 is most prudent but I dont want to. Thoughts please.

4 is not the prudent one.

Whatever you do, don't call 4 prudent.

Fair play to you to have that saved.

KnowingWind

Danzy wrote: »

4 is not the prudent one.

Whatever you do, don't call 4 prudent.

Fair play to you to have that saved.

I meant with Country in beginning of recession maybe it would be sensible to hold a few months or 1 year.

Princess Consuela Bananahammock

I'd be inclined to say cash outright.

You have somewhere to live, you have an asset and you have no debt. Your own space and still security.

If there's a recssion, you don't have to worry about the mortgage being paid or a foreclosure.

If there's no recession, the value (hopefully!) grows and you can sell and upscale if the oppertunity arises.

Browney7

KnowingWind wrote: »

Looking for discussion on my options, may help other in similar situation.

I have been living with the mammy for various reasons which is obviously not ideal. Im in my thirties.

I have mortgage approval for 265k and a deposit of 370k saved.

Initially, I just got mortgage approval in case needed, but plan was to buy something outright.
Then, I had second thoughts and decided to avail of cheap money and get a small enough mortgage to buy something in 300-400 range.
Then I had second thoughts as there really isnt much value in this bracket, so considered buying something at 500k plus while mortgaging myself.
And now, here I am thinking the market is about to collapse and everything is about to get a whole lot cheaper, maybe I should hold on a bit longer.

So my options are...
1. Buy something now for cash outright.
2. Buy something now for 500k range with a mortgage.
3. Buy something for 300k range with mortgage and keeping some saving to other assets.
4. Wait.

I cant help think 4 is most prudent but I dont want to. Thoughts please.

You need to look at what you would ideally want and what each of the options gives you.

What is your job security like underlying that approval amount and what are the salary prospects. If you are able to get a 20 grand salary bump in the next 2 or three years you've another 70 grand approval. If you meet someone you can add 150k at a minimum realistically.

You need to consider your life plans and what you will need five and ten years from now - married with kids or remaining a lone wolf?

Assuming a Dublin purchase, 300k would get you a 2 bed apartment in a decent area and maybe a 3 bed house that needs work in a "not great area". With the cash you have on hand, you're in a great position to take on a fixer upper project if you know any builders or tradesmen. Potential if there is a construction slowdown it will be easier get tradesmen in 6-12 months and at a not outrageous price.

You are also right to consider your existing assets and optimising these - if I was you I'd be looking to drip feed some of this into a pension over the next number of years but this obviously depends on your existing pension arrangements and contributions etc.

Danzy

KnowingWind wrote: »

I meant with Country in beginning of recession maybe it would be sensible to hold a few months or 1 year.

The country is in the beginning of a recession. House building is also severely curtailed by restrictions etc this year.

12bn in additional savings have been made in the first 6 months, an insane number.

The bounce back looks like being a global boom, the recession is not going to effect house prices as much as other times.

BrokenArrows

If I were in your position id buy with a larger mortgage and keep the cash.

Keep paying the mortgage as long as the interest rates are low.

If the rates ever become too high then you can pay off the mortgage.

In the mean time invest the money you have saved elsewhere.

Danzy

You are in a rare position for a 30 yr old. Fair play.

I'd suggest taking a mortgage, a small one, a manageable payment.

Invest the rest, cash near enough at hand is everything in your 30s and 40s, less so later in life.

Some good posts above.

javaboy

BrokenArrows wrote: »

If I were in your position id buy with a larger mortgage and keep the cash.

Keep paying the mortgage as long as the interest rates are low.

If the rates ever become too high then you can pay off the mortgage.

In the mean time invest the money you have saved elsewhere.

Unless the money is needed now, it’s not a great idea generally to borrow to invest which is what you’re suggesting essentially. The after tax return on the investment would have to beat the mortgage interest.

By all means keep something aside and get a small mortgage but unless the OP’s earning potential is at serious risk, it doesn’t make sense to take out a large mortgage.

mousblaster17

KnowingWind wrote: »

I meant with Country in beginning of recession maybe it would be sensible to hold a few months or 1 year.

But why? there is an entire thread where people are speculating what is going to happen and I think it's a foregone conclusion that no one knows. We are not living in the days of 2008 where there was an inordinate supply of houses people were trying to sell. Supply is lowest it's been in 14 years. There are people with good secure jobs and bank accounts replete with savings who had the head down the last few years saving up to be in a good position to buy. Waiting is superfluous in my opinion, so I'd scratch that off the list. Go view houses. If you see a house you like, just buy it.

Samuel T. Cogley

As above, start viewings but don't rush in and keep all your options on the table regards financing.

Lundstram

You say it's not ideal for you to be living with your Mammy in your thirties with €370k in the bank.

You're overthinking this, just buy outright.

KnowingWind

mousblaster17 wrote: »

But why? there is an entire thread where people are speculating what is going to happen and I think it's a foregone conclusion that no one knows. We are not living in the days of 2008 where there was an inordinate supply of houses people were trying to sell. Supply is lowest it's been in 14 years. There are people with good secure jobs and bank accounts replete with savings who had the head down the last few years saving up to be in a good position to buy. Waiting is superfluous in my opinion, so I'd scratch that off the list. Go view houses. If you see a house you like, just buy it.

Yeah, no one really knows whats going to happen.

I guess its just my personal opinion that a big reduction may be on the cards. My thoughts arent specifically directed at the Ireland situation, more the developed worlds economies.

Danzy

KnowingWind wrote: »

Yeah, no one really knows whats going to happen.

I guess its just my personal opinion that a big reduction may be on the cards. My thoughts arent specifically directed at the Ireland situation, more the developed worlds economies.

It won't be that big, there is reduced supply in an already tight market, very big jump in savings, ecb won't raise interest rates for years after this, continual stimulus is even more likely.

You have an exceptional level of savings for 3 or 4 people in their 30s, not just 1.

mousblaster17

KnowingWind wrote: »

Yeah, no one really knows whats going to happen.

I guess its just my personal opinion that a big reduction may be on the cards. My thoughts arent specifically directed at the Ireland situation, more the developed worlds economies.

But you're in a privileged position!

If we are to believe what you have described... you're in your 30s with €370k saved and approval of €265k or whatever it is and you're saying you might wait for a reduction in property prices. For what? Compare your situation to the cohort of people who are financially screwed now because of this pandemic and you're saying you might wait for a drop in prices with €635k to spend? You can buy a really nice house for €500k, a small mortgage and have lots of change left over.

Have a day off.

Princess Consuela Bananahammock

KnowingWind wrote: »

Yeah, no one really knows whats going to happen.

I guess its just my personal opinion that a big reduction may be on the cards. My thoughts arent specifically directed at the Ireland situation, more the developed worlds economies.

At some point, you have to stop thinking about maximising incomes and just make yourself happy, so the question is: what's going to make you happy?

KnowingWind

mousblaster17 wrote: »

But you're in a privileged position!

If we are to believe what you have described... you're in your 30s with €370k saved and approval of €265k or whatever it is and you're saying you might wait for a reduction in property prices. For what? Compare your situation to the cohort of people who are financially screwed now because of this pandemic and you're saying you might wait for a drop in prices with €635k to spend? You can buy a really nice house for €500k, a small mortgage and have lots of change left over.

Have a day off.

I just dont want to buy a place that falls 20-30 percent in the next year. Could cost me 100k.

Of course no one reads the future.


Im not sure why I should think of anyone elses position when assessing my own.

KaneToad

KnowingWind wrote: »

I just dont want to buy a place that falls 20-30 percent in the next year. Could cost me 100k.

Of course no one reads the future.


Im not sure why I should think of anyone elses position when assessing my own.

Are you looking for an investment or a home? Sounds like it's an investment that you're interested in...

KnowingWind

KaneToad wrote: »

Are you looking for an investment or a home? Sounds like it's an investment that you're interested in...

No, just a home. But I obviously dont want to overpay for it.

Samuel T. Cogley

KnowingWind wrote: »

I just dont want to buy a place that falls 20-30 percent in the next year. Could cost me 100k.

Of course no one reads the future.


Im not sure why I should think of anyone elses position when assessing my own.

As above again :pac:

If it's a home, I wouldn't let a short - medium term loss put me off. You're likely be there 20 years plus if you buy the right place. Property (usually) recovers.

KnowingWind

Samuel T. Cogley wrote: »

As above again :pac:

If it's a home, I wouldn't let a short - medium term loss put me off. You're likely be there 20 years plus if you buy the right place. Property (usually) recovers.

Fair point, but Im looking at it a bit different.
I.E. If I wait a while I could have an extra 100k or more in the bank, to be used elsewhere, maybe to turn into 300k by the time said property recovers value.

Hence, costing 300k.


I know, an extreme scenario full of ifs and buts. But I cant help it.

Oranage2

Could pay out right for something cheap then get a mortgage for a second property. Rent out both while you still live at, you'll be making cash moolah. Though I'd wait, there's no advantage buying now unless you see something you really want. No point taking a risk.

Shelga

No one can tell you whether property prices are going to fall or not, nor by how much. That seems to be what you’re after. We’re all in the same boat. I’d probably wait a few months, but if you’re like me, I can’t tolerate another 2 years of living at home in my 30s, personally.

mousblaster17

KnowingWind wrote: »

No, just a home. But I obviously dont want to overpay for it.

Someone once said to me - "Buying your first place is like deciding to have a baby. It never feels like the right time."

Same here. It'll never feel right unless prices fall. What if prices start to go up? You'll have missed the boat. There are a plethora of people thinking the same thing right now - wait until next year, prices will drop. So how can they drop if those same people are sitting in the long grass waiting to buy?

It seems glaringly obvious to me that you havent viewed any properties yet. You need to start doing that because then you might find that place that you feel is meant for you, in which case you'll want to buy it no matter what.

Otherwise, continue saving and forget about buying a home.

KnowingWind

mousblaster17 wrote: »

It seems glaringly obvious to me that you havent viewed any properties yet. You need to start doing that because then you might find that place that you feel is meant for you, in which case you'll want to buy it no matter what.

I viewed several places over the last year.


Even those I liked seemed vastly over priced to me and I couldnt pull the trigger.

I did get involved in a bidding war on one property but pulled out.

IngazZagni

KnowingWind wrote: »

I meant with Country in beginning of recession maybe it would be sensible to hold a few months or 1 year.

A very different recession than the last one though.

I bought 3 years ago and had many people in my ear telling me to wait as the market was inevitably going to burst soon. I decided to go with my gut though and buy. 3 years later and property prices having gone up even further I am delighted with my decision. Even more so now that my salary has been slashed due to covid cuts, there is no way I’d get the same mortgage approved now. You never know what’s around the corner. If you get that “home” feeling in the place you’re trying to buy I’d go for it.

Chris_5339762

I'm in a not-too-dissimilar situation and one thing that you should take into account - how healthy is your mother? You haven't mentioned father and I'm not going to ask there, but just bear in mind that she may need care into the future. So if she's in her mid 70s, say, and is getting to the point that care might be needed, just consider that when it comes to moving out and not being in the same property as her anymore. You may need to move back, or move in with you.

Also bear in mind that if you live with her as your principal private residence for three years before any inheritance (if she dies) and then live there for six years after, then you don't have to pay inheritance tax.

Edit: It is extraordinarily difficult to balance the upcoming needs of aging parents with your own needs. I've left it too long and I'm now in the situation where my parents are going to start needing some form of help/care soon and they are desperately trying to convince me not to leave.

riclad

Lets say we have a recession, price might fall in rural area,s .
if you want to buy in a city, you may as well buy now.
if you are single buy a 2 or 3bed house in an area you want to live in.
near bus ,luas etc
i,d prefer to buy a house in an area i like in mediocre condition
than buy a house thats in perfect condition with a long commute .
if house is old ,more than 30 years old get a full structural survey.
even if prices fall in dublin i dont think it ,ll be a large fall,.
maybe 10per cent.
right now we need 30 k housing units built every year.
last year there were about 19k .
may be get a mortgage of 30-40k if you need it to buy the house you like.
go to daft.ie, myhome.ie ,put in 350k, see what is avaidable for that price .
i think 2 or 3 bed house,s might go up in value,as more people work from home .
look for a house with a parking space , back garden or even a small yard.

mousblaster17

KnowingWind wrote: »

I viewed several places over the last year.


Even those I liked seemed vastly over priced to me and I couldnt pull the trigger.

I did get involved in a bidding war on one property but pulled out.

Dublin? I felt exactly the same when I viewed my first place, at least in Dublin. Shock to the system. You'll desensitise to it if you actually really do want to buy.

It is what is unfortunately.

If it's Dublin you're looking in and you want a decent area, you'll have to cough up for it.

Supply and demand and all that...

Taylor365

KnowingWind wrote: »

I have mortgage approval for 265k and a deposit of 370k saved.

Inheritance? Small windfall? To say its saved is a bit misleading. On a salary of 65-70k it would take maybe 10-13 years? And you couldn't have started on that salary! :pac:

If i were in your shoes, no kids, I'd mortgage a simple 2-3 bed (300k+) and get a small 1/2 bed apartment in south of Spain/Portugal/canaries.

If you wait and wait, time will soon be up.

KnowingWind

Taylor365 wrote: »

Inheritance? Small windfall? To say its saved is a bit misleading. On a salary of 65-70k it would take maybe 10-13 years? And you couldn't have started on that salary! :pac:

If i were in your shoes, no kids, I'd mortgage a simple 2-3 bed (300k+) and get a small 1/2 bed apartment in south of Spain/Portugal/canaries.

If you wait and wait, time will soon be up.

No windfall.

KnowingWind

mousblaster17 wrote: »

Dublin? I felt exactly the same when I viewed my first place, at least in Dublin. Shock to the system. You'll desensitise to it if you actually really do want to buy.

It is what is unfortunately.

If it's Dublin you're looking in and you want a decent area, you'll have to cough up for it.

Supply and demand and all that...

Yes Dublin, but Im now considering going outside Dublin.
My job is suitable for wfh at least half the week and cant see that changing.

jrosen

I would buy and take out a small mortgage, leaving me with some cash. At the moment your cash is doing nothing for you anyway. Its just sitting there.

Choose a location you want to buy in.
How long do you want to live in the new place for? 3-5 years or longer? That would influence the property type a little.

Do you want to invest some of the money you have?

Property prices go up and down, its never really that relevant unless your selling. So if your planning to stay longer term you can absorb a little more fluctuation with prices.

As a side note, moving out would give your mum her house back and you some independence. Its a win win

zeebre12

KnowingWind wrote: »

No windfall.

Did you get left money? What do you work at? 370k is a huge amount of money to have saved.

ChewBerecca

if the right place pops up in your budget, don't hesitate.

We bought over a year ago, and nothing in our budget has appeared on daft since that interests me.

A house is a longterm investment, and to be honest I don't see a crash in prices happening. There's too much demand compared to supply so even with all those impacted by lockdown, there's plenty who weren't who are still mortgage approved.

So OP, if something comes up that interests you, go for it.

uli84

Unless your parents really want you to stay I’d buy either with cash or small mortgage and move out. I think it’s high time since you can afford it.

Divisadero

zeebre12 wrote: »

Did you get left money? What do you work at? 370k is a huge amount of money to have saved.

How is that relevant? The op has the cash I would have though how he/she got it is their own business.

OP if you decide to hold off I wouldn't wait any longer than a year or you might never move. Set a time limit and stick to it. I would buy cash only unless your job is very secure e.g. public service.

bobbyy gee

Wait covid will kill the market

Danzy

bobbyy gee wrote: »

Wait covid will kill the market

Doesn't look like that is happening.

Geuze

Princess Consuela Bananahammock wrote: »

If there's no recession, the value (hopefully!) grows and you can sell and upscale if the oppertunity arises.

If???

The recession started in March 2020.

It was very sharp. Many jobs lost.

It should be over by now, we will know for sure when the Q3 data is released.

We are in the recovery phase now.


Overall, the 2020 recession is very bad:

https://www.gov.ie/en/press-release/4b5e5-minister-donohoe-publishes-economic-forecasts-that-will-underpin-budget-2021/


The Department of Finance’s Budget 2021 forecasts show that both Covid-19 and a disorderly end to the ‘transition period’ will have a significant impact on the Irish economy;

Modified domestic demand – proxy for domestic economy to fall by -6.5 per cent this year;

GDP is projected to fall by -2.5 per cent in 2020 and to grow by only 1.4 per cent in 2021;

Impact of Covid-19 on GDP is less than previously expected, mainly due to the resilience of Multi-National Company (MNC)-dominated exports, however the hit to the domestic economy has been severe;

Employment set to fall by 13.8 per cent this year this with an annual average unemployment rate of just under 16 per cent this year, and 10.7 per cent in 2021;

Economic forecasts have been endorsed by the Irish Fiscal Advisory Council.





So although the fall in GDP will be less than expected, to see the effect on the domestic economy look at the employment figures, very bad.

Lux23

Can you find a place you're happy to live in for the next few years with your savings? If you can, then buy somewhere but on the understanding that you might lose some value in the medium term. Or save another few quid and start looking again the Spring?

Danzy

https://www.businessworld.ie/financial-news/Irish-savings-hit-another-record-high-in-July--574400.html

Jaw dropping savings accumulating this year.

19bn since March. Just under 4.5bn alone in July.

That's enough to buy every house built this year for 450k.(19bn)

Nevermind that house builds have slowed down while demand has not.

There is not one thing to suggest a steep house price fall.

KnowingWind

Danzy wrote: »

https://www.businessworld.ie/financial-news/Irish-savings-hit-another-record-high-in-July--574400.html

Jaw dropping savings accumulating this year.

19bn since March. Just under 4.5bn alone in July.

That's enough to buy every house built this year for 450k.(19bn)

Nevermind that house builds have slowed down while demand has not.

There is not one thing to suggest a steep house price fall.

The real question is how concentrated these savings are.

Danzy

KnowingWind wrote: »

The real question is how concentrated these savings are.

It would be interesting, we do know that 90% will have nothing close to your impressive savings. You have a level of security and resources that very few people applying for a first mortgage have and savings that mist will never have after a long life of hard work.

I think your bigger problem is the way you look at things, that's the biggest threat to you, more than any house price drop. No comparison in fact.

Are you an anxious person?

I'm not being judgemental here, I've had a breakdown once, there is a psychological block here, maybe its fear, guilt of leaving home.

It's more than just money.

Casati

With a recession started, cities becoming less popular globally, practically no travel, huge government debt that will have to be paid back, massive rates of employment etc, almost all of us are going feel a lot of financial pain for a long time.

I moved into a new house a year ago but if I had my time back I’d hold tight and wait for the arse to fall out of the property market. Remember those with a vested interest talked up the market the last time, yet it fell up to 70%. Many of those with a vested interest will be talking it up again

Fair play to having such massive savings in your mid 30’s, that’s a lot of cash that I’m sure was hard earned so you need to look after it and not risk it on property

Danzy

Casati wrote: »

With a recession started, cities becoming less popular globally, practically no travel, huge government debt that will have to be paid back, massive rates of employment etc, almost all of us are going feel a lot of financial pain for a long time.

I moved into a new house a year ago but if I had my time back I’d hold tight and wait for the arse to fall out of the property market. Remember those with a vested interest talked up the market the last time, yet it fell up to 70%. Many of those with a vested interest will be talking it up again

Fair play to having such massive savings in your mid 30’s, that’s a lot of cash that I’m sure was hard earned so you need to look after it and not risk it on property

There are many ways to skin a cat. He could buy a place for 400, 250 down 150 borrowed, still have 125 in cash, his phenomenal saving ability will not change.

Setting forth on his own and living life to his best chance is the concern now.

KnowingWind

Casati wrote: »

With a recession started, cities becoming less popular globally, practically no travel, huge government debt that will have to be paid back, massive rates of employment etc, almost all of us are going feel a lot of financial pain for a long time.

I moved into a new house a year ago but if I had my time back I’d hold tight and wait for the arse to fall out of the property market. Remember those with a vested interest talked up the market the last time, yet it fell up to 70%. Many of those with a vested interest will be talking it up again

Fair play to having such massive savings in your mid 30’s, that’s a lot of cash that I’m sure was hard earned so you need to look after it and not risk it on property

Yes, this is big concern.


My goal is to be as debt free as possible, I dont like having debt around my neck.
So, if I can hold and get a house I really want for much cheaper debt free it obviously be ideal.


I dont think there is much risk of prices rising. But as other have said, eager to get my own place all the same.

KnowingWind

Danzy wrote: »

It would be interesting, we do know that 90% will have nothing close to your impressive savings. You have a level of security and resources that very few people applying for a first mortgage have and savings that mist will never have after a long life of hard work.

I think your bigger problem is the way you look at things, that's the biggest threat to you, more than any house price drop. No comparison in fact.

Are you an anxious person?

I'm not being judgemental here, I've had a breakdown once, there is a psychological block here, maybe its fear, guilt of leaving home.

It's more than just money.

Not at all, I have lived abroad and way family home for majority of adult life.