To buy or not to buy?

G

geordub

Guest
Myself (26) and my partner (28) are both working full time PAYE workers.
I earn 35k p/a and he earns 26k p/a.
We are currently renting (1000 per month) and trying to save for a deposit for a house. 2500 currently in shares in Credit union. We have 1 small personal loan each for 150 per month.
2 years ago we were in the process of buying a house and the sale fell through the seller pulled out. We know the process involved with solicitors, estate agents etc.
We feel that renting is dead money and are trying to think of ways to save more money for our mortgage deposit. Hoping to buy a house for around 200k. Any suggestions would be greatly apprecaited.
thx
 
You dont appear to have adequate savings to cover the deposit!

Start eating into the personal loan and get it paid off!

Have you decided on an area you would like to live in and are the prices within your budget.

Could you move back to parents for a few months to enable you to save the "dead money"?
 
Renting is not dead money. You get the use of the apartment for the rent.

You could equally argue that paying mortgage interest is dead money. You get the use of the money for the interest.

You illustrate this perfectly well yourselves. If you had bought the house 2 years ago as planned, you might have saved yourself €24k "dead money", but your apartment would be worth €200k less now. So you have got a great return on your "dead money".

You can start saving immediately, by using the shares in the Credit Union to pay off your loans. You are probably paying a very high interest rate on the loans and getting little, or possibly, even nothing, on your shares.
 
I'd say to look at morgage amortisation before you decide. You will pay interest on every euro you borrow and that is very costly. Morgage capital repayments are no dead money but its less clear for interest.
It may make more financial sense to rent and save, especially if house prices are not going up. A good deposit saves you a lot of interest. It can get you a better rate of interest.

Could you find a cheaper rental property?
Could you move home for a while?
Are you claiming rent tax relief?

Put in your details here and see the amount of interest you pay on the loan.
 
The question of whether or not to buy isn't an issue for you at the moment because you have borrowings and no savings. You should instead look at the money makeover section and maybe post your circumstance there. Keep a spending diary also, this focuses your mind on where your money is going and you will be able to identify how much you can realistically save. Once you have saved you can then decide whether buying a house is a good move in teh circumstances that exist at that time.
 
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