Living with parents \ Buy or wait

KnowingWind · 26-09-2020 5:16pm #1

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 · 26-09-2020 5:27pm

370K saved :eek:

Fair play.

bobbyy gee · 26-09-2020 5:28pm

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 · 26-09-2020 5:28pm

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 · 26-09-2020 5:31pm

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 · 26-09-2020 5:47pm

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 · 26-09-2020 6:58pm

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 · 26-09-2020 7:12pm

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 · 26-09-2020 7:24pm

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 · 26-09-2020 7:34pm

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 · 26-09-2020 7:46pm

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 · 26-09-2020 7:55pm

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 · 26-09-2020 7:58pm

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

Lundstram · 26-09-2020 8:09pm

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 · 26-09-2020 8:16pm

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 · 26-09-2020 8:20pm

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 · 26-09-2020 8:46pm

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 · 27-09-2020 11:34am

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 · 27-09-2020 11:46am

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 · 27-09-2020 11:49am

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 · 27-09-2020 11:50am

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 · 27-09-2020 11:52am

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 · 27-09-2020 11:55am

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 · 27-09-2020 12:01pm

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 · 27-09-2020 12:28pm

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 · 27-09-2020 12:42pm

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 · 27-09-2020 12:47pm

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 · 27-09-2020 12:57pm

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 · 27-09-2020 1:08pm

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 · 27-09-2020 1:12pm

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 · 27-09-2020 1:16pm

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...

Living with parents \ Buy or wait

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