# Medium-term renting for long term goal of small to no mortgage



## Pocket (28 Apr 2010)

Age: 28
Spouse’s/Partner's age: 30

Annual gross income from employment or profession: 50,000 + ~20% bonus per annum
Annual gross income of spouse: 50,000 per annum 
Take home pay after tax and pensions ~5300 pm between us

Type of employment: e.g. Civil Servant, self-employed 
Semi-state (him) and private (me) sector, permanent.

In general are you:
(a) spending more than you earn, or
(b) saving?
Saving ~ 1,600 a month between us + my bonus + 150 a month on company share scheme

Expenses 
Rent 1250pm (reduced by 100 euros since last year)
General day to day living (food, car, bills etc) 1,100pm


Other borrowings – car loans/personal loans etc
None

Do you pay off your full credit card balance each month? yes
If not, what is the balance on your credit card? 

Savings and investments:
~40,000 + 6,000 in company shares + 50,000 gift from parents for deposit for buying a home

Do you have a pension scheme? 
Both of us do through work 

Do you own any investment or other property? 
No and we are potential first time buyers
Ages of children: 
None

Life insurance: 
Yes, through work

Question: I have posted here last autumn with a question about long term saving. At the time we were planning to buy a house and start a family (not necessarily in that order). We are going ahead with the latter but we are reassessing our plan to buy a house (ironically now that we can afford a house we are questioning if we want to). We both work in Dublin but are originally from the country and we would like to move back there in the next 5 to 7 years. The idea would be that we could continue to save and potentially buy with a very small mortgage or non at all. I would like to look at the option of renting until then as logically as I can. Of course there is other more emotional feelings like the drive to own your own home, the worry of having to move more then once with a young family but I can overcome if we have a longer term goal to work towards. Just to note that we are happy in the house that we are currently renting and would consider it suitable for our needs for the next 3 years +

Here are the Pros and cons to our plan as I see them:


Pros:

Not loosing first time buyers allowance (which might = 2years worth of rent)
Flexibility: renting always freedom to move quickly if there is a job offer in the region that we want to move to.
We can potentially save more effectively while renting (our rent is definitely lower then having a mortgage for the same house and any wear and tear/problems with the house comes out of the landlords pocket)
Eventually having a very small to no mortgage in the 10 years
Ability to reduce renting costs if necessary (i.e. one of us looses a job/parental leave)

Cons:

Not getting a mortgage until we are in our mid to late thirties – what if we decide to stay in Dublin?
Rents could going up (I know we cant speculate but just factoring it in a possibility)
House prices could going up (I know we cant speculate but just factoring it in a possibility)
Not being able to save as much with childcare costs, maternity leave breaks in pay. It might be easier to be committed to paying a mortgage then saving when things are tighter. 
Present from parents sit in their bank account and I’m guessing we don’t get any interest on it (that would be cheeky)/can we count on this money in 5 years time?
Would love people’s opinions or input. Poke as many holes in our plan as you can! I want to look at it from all angles.


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## BoscoTalking (29 Apr 2010)

with people living longer don't expect your folks to give you anything as it may be sitting in their account for their retirement. 
Also are your jobs transferable? 
There may be issues with getting a mortgage when age and children are factored into it.  
Where do you see your children growing up? going to college?


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## Pocket (29 Apr 2010)

_Pennypitstop, I've answered your questions below in italics._

with people living longer don't expect your folks to give you anything as it may be sitting in their account for their retirement. 
_They are already retired with a relatively large pension, savings and investments (we wouldnt feel comfortable accepting it otherwise) and they have reassured us by saying that they keep it in a seperate savings account for when we are ready to use it. But who know in 5 years what could happen - family rows etc._

Also are your jobs transferable? 
_My husbands, yes but we would need to be a bit flexible about location. Mine, not so much but I would probably have the option to work from home remotely for the company I work with at the minute._

There may be issues with getting a mortgage when age and children are factored into it. 
_The idea would be that we would have a mortgage or we would have a small one (maybe 75K max). But it does concern me that if we changed our minds, and wanted to remain in Dublin would we get a mortgage large enough to buy a house even if we had a 50% deposit?_


Where do you see your children growing up? going to college? 
_Its a major factor for us. We would both like our childern to grow up (at least from school going age) in the counrtyside and hopefully nearer there extended family. I'm not sure if college comes into the decision as we'll probably kick them out when they finished secondary school ;o)_


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## Brendan Burgess (30 Apr 2010)

I think you have set out your ideas very clearly and very well.  

There is no logical or financial reason for you to buy a house at the moment. 

The only "reason" is the emotional feeling of owning your own home. I think you should allow the logic and finance to overcome this. 

When you know where you both want to live, you will be in a very good position to buy a house.  You will be cash rich. You won't have the hassle of trying to sell your old house. 

It's very straigtforward. Stay where you are. 

Brendan


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## dmos87 (1 May 2010)

I have to agree with Brendan on this. You both seem so structured and planned, it would be a shame to loose your first time buyers simply because you want to set down roots. The pro's to staying where you are now outweigh the cons. If I were in your position I would wait until both of you are clear on where you want to be in 3-5 years time. But I think you both know this already


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