Rent or Buy?

[sooz07]

This would be my first time moving into a place of my own. I earn about �15,000 a year before tax. Many people have told me that I should buy and others have said that I should rent first since its my first place. Does anyone have advice about if I should rent or buy my first place?

[jake-the-peg]

What part of the country are you in?

What sort of deposit do you have?

With the average price of property now unless you have a large deposit you'll probably find it almost impossible to borrow enough

[bednobs]

i dont know where you live, but even if you could get, say, 5 times your salary as a mortgage, thats still only �75 000. Could you get somewhere where you live for that much? Perhaps the best thing to do would be to see a mortgage advisor to find out 1) how much you could borrow and 2) how much could afford in repayments. Mortgage advice is usually "free"

[sooz07]

I have been told by an advisor that some lender would be able to give me �54,000 but that's just one lender. I don't have a deposit but I have been told that many first time buyers don't have a deposit so some lenders are able to give people 100% mortgages. I want to find a place in Falkirk doesn't have to be a house it could be a flat. I have been looking for places that are selling at Fixed prices only.

[Twenty20]

There are properties in Falkirk that fall within your budget, if you can get a 100% mortgage. What you need to do is look at the repayments and see if you can afford them on your salary.

Whether it's better to rent first depends on the rental market and how much rent you'd be looking at paying. The main benefit of renting first is it may enable you to save some money to get a deposit together. It may also possibly buy you some time to see which way the property market is going in your area - it wouldn't be a wise move to jump in and buy now if it looks like house prices will fall in the coming year or two in your area.

Generally I'd say buy rather than rent as, usually, it's a better investment but you'd need to be careful at the moment.

[jake-the-peg]

OK you want to be very careful right now about 100% mortgages.

I don't for a moment think that there will be a crash but there could well be a drop in value in some areas especially if interest rates go up further.

If this happens where you are you'll be in the situation of owing more than the place is worth (negative equity) which means that you'd probably be stuck with the property as you couldn't sell it for enough to pay off your lender.

If there's a rise in interest rates or a change in your circumstances and you can't keep up with the mortgage you'll be stuffed.

Remember it's not just the mortgage, there's council tax, heating, electricity, water rates insurance.

At an introductory 6% that's only �270 a month but that's �360 at 8% and if it were to hit 12% that'd be �540.

Personally I'd rent for a while and save a bit for a deposit, if you find it hard to save you'll find it hard to afford a mortgage

[tiggerwoo]

Yes but rents are so extortionate and mostly more than what you would be paying with a mortgage.If you are not desperate I would sit tight for a while as house prices might come down a bit more yet and you might get a bargain...and in the meantime save as much as you can for a deposit.Personally I think renting is a rip off alth'o i appreciate that some people have no choice for whatever reason and there are alot(not all) of really awful landlords and letting agents out there.So just do your homework and I wish you well.I would say buy...everytime...if you possibly can.....

[PAUL55]

Its always better to buy if you can afford it, but getting on the ladder is the hardest part. I don't think you will find a house for that amount, but you may find a flat and providing the area is ok, then go for it. Its a buyers market at the moment and even if prices drop a little after you make your purchace, History tells us that in time things will pick up again. Bricks and mortar will always be the best investment but sometimes you nead to sit on your investment for a while, and if youv'e got the time you can't go wrong. I only started buying 20 years ago and I now have 6 properties and no mortgages or loans on any.

[PAUL55]

Me again - If you start off by renting you will find it hard to be able to save enouph to buy as rent is sometimes as expensive as a mortage. You are better buying NOW because even if prices drop slightly, the drop in the value of your property would be out weighed buy the rent you would have wasted by waiting for a bargain, unless you can live with mum & dad cheap of course.