Are we mad to buy at our age (50yo couple renting at present, expecting inheritance)?

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I would appreciate any advice please.

Husband and I will be 50 next year and would love to buy our own house instead of renting.

Sounds terrible but we do have an inheritance of circa €200,00 coming over the next few years. We have been advised to take out interest only mortgage for three years but unfortunatly are about 12,000 short on the deposit. We do not want to borrow anymore but both have combined salaries of €85,000.

Should we hang on and save a bit more by which time we are reducing the term we can borrow?

Are there any other options where we can borrow 95%?

Oh by the way its a new house.

Thanks for taking the time to read this.
 
Re: Are we mad to buy at our age?

It may help if you can also tell us...

> Is the 200k in a lump sum or in drips and drabs?
> Is the 200k after you've paid all taxes due on it
> Is the 200k an absolutely certainty that you could prove to a lender?
> What is the value of the house you are considering buying?
> You say you are 12k short on deposit, but yet don't tell us what the req. deposit is

Personally I think that you both could probably comfortably work for 15 more years, have a good income and will have 200k to help make the purchase. Given these facts, then if the banks will approve, I think you are definitely in a position to buy a house. On your salary and with your age, you could probably borrow around 200k; which added to your lump sum gives the potential to buy a house of up to around 400k in value.
 
Re: Are we mad to buy at our age?

Thanks for the quick reply. The inheritance will come in a lump sum and could be within the next five to ten years. House is being sold for 280 reduced from 330, We have been quoted an interest only mortgage fixed for two years and can only get a 92% loan.
 
Re: Are we mad to buy at our age (50yo couple renting at present, expecting inheritan

Over what term is the mortgage offered? is it planned that you will significantly reduce term upon receipt of inheritance? Is the lender aware of this?

Assuming it's a 15yr mortgage (to finish when yee hit 65)... then interest only repayments would be 1250-1300 or so whilst interest & cap repayments would be in the order of 2200 per month. Thats €26k per annum, or approximately 30% of your gross salary. Obviously you may be entitled to interest relief and I don't know your after tax income... but i'd safely assume that after all is factored in, the repayment would equate to somewhere between 40%-60% of your net income...

Now thats assuming a 15yr span... the question is - do you think you could cope with a very large % of your earnings going to meet the mortgage until such time as you recieve the inheritance? And what would happen if the inheritance never materialised? Indeed, what happens if in interest rates start to climb in a few years, or if one of you faces a reduction in earnings?

I don't mean to be negative, but you are considering taking out a mortgage that you may not be able to afford based solely on the receipt of a lump sum at an uncertain date in the future. Perhaps you have been offered a longer term - if so, thats great and this might work - but if it's a 15yr term, then you have to think very hard.

These are only my opinions, i'm sure other members can provide far more detailed answers.
 
Re: Are we mad to buy at our age (50yo couple renting at present, expecting inheritan

Thanks so much, the term is 20years. The inheritence would be paid off the mortgage straight away although we cannot confirm date. We want to move but I really don't know what to do at the moment, maybe I should go with my instincts and wait till we can save a bit more of a deposit but by then we will be 50plus and houses will probably be back on the up then.
 
Re: Are we mad to buy at our age (50yo couple renting at present, expecting inheritan

Do you have children ?? If Not and your combined incomes are 85k you should be able to save a bit more unless you have crazy living expenses.
 
Re: Are we mad to buy at our age (50yo couple renting at present, expecting inheritan

Wait 6 months to a year and houses prices will be much cheaper.

Very little point of rushing into anything at the moment
 
Re: Are we mad to buy at our age?

Advice said:
Thanks for the quick reply. The inheritance will come in a lump sum and could be within the next five to ten years. House is being sold for 280 reduced from 330, We have been quoted an interest only mortgage fixed for two years and can only get a 92% loan.
Click to expand...

As previous poster said why rush, the fact that the bank only wants to give you 92% should tell you something ie if they thought it was a great buy they'd be willing to lend you more.
 
Re: Are we mad to buy at our age (50yo couple renting at present, expecting inheritan

Thomas22 said:
Wait 6 months to a year and houses prices will be much cheaper.

Very little point of rushing into anything at the moment
Click to expand...

Thomas is right, if you have the patience to wait you'll get a better house in a better area for the same price in 6 months to year - prices are only going to come down in the next 12 months. And if/when you do go for it, drive a hard bargain, go in well under the asking (like 50K) even if it has already been reduced and sit and wait, let them call you, make sure they know you are not in any rush. Enjoy the house hunting, you're in a great position!
 
Re: Are we mad to buy at our age (50yo couple renting at present, expecting inheritan

Thanks so much to everyone for all your help its a brilliant website, thanks to you all!

All the very best to you for your kind advice.
 
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