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  1. #1

    Help Please! Buy now, or next year?

    I'm stuck in a dilemma of what to do best, and hoping to get your advice on the best option.

    Myself and my wife are looking to buy our first house. We are currently renting paying ~10k/year. The houses we are looking at are in the region of 280-300k. We currently have around 20k in savings (10k in H2B ISA and 10k regular savings account).

    My options:

    Buy now and forfeit the H2B bonus as the house will be over the 250k threshold. I will only have enough for a 5% deposit so the mortgage rates will be higher.

    Or...

    Buy in June 2018. Transfer H2B savings into a Cash LISA to get the 25% bonus. By that time myself and my wife will have 24k saved so will get a 6k bonus. There will be enough to put a 10% deposit and get a better mortgage rate.

  2. #2
    My dilemma is that I don't know if house prices will rise next year to outweigh the cost of renting another year (10k), losing the LISA bonus (6k) and getting a worse mortgage rate.

    What would you do? I've heard conflicting opinions, but the majority tell me to just get on the property ladder ASAP.

  3. #3
    Nobody has a crystal ball - but yes, getting on the property ladder early is generally a good idea.

    However, a 10% deposit not only comes at a better interest rate but it's also a safer bet. You don't want to find yourself in negative equity - what if you buy and need to sell quick, for whatever reason (life throws lemons...).

    On the other hand, at the moment the market has cooled down and interest rates are low - what if property prices go up again post Brexit and/or interest rates go up? (they could also go down )

    Do you have cash for stamp duty and legal fees to buy? That's another 7-10K you need to come up with.

    If I were you I'd wait until 6 months have passed, after election...

  4. #4
    Currently me and OH have 5k each in our H2B ISA. If we transfer this into a LISA and pay in the remaining 3k of the 2017/18 allowance we will have 8k come April 2018. We would then put in 4k in May 2018 so come June 2018 when the account has been opened for a year we would have 12k each (24k combined), meaning the bonus would be 6k.

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