To rent house for 12 month and then buy it?

MarinaLatvia

Hi All,

As far as I understand rent -to -buy schemes are no longer available, but I've heard that some has asked the seller to rent the house they liked (that is on for sale) for like 6-12 months prior to buying it, so for this period they can save up for the deposit and arrange the mortgage that can sometime take a few months.
We are really bad at saving, and are having difficulty saving up for a deposit, it would be much easier for us to borrow the amount and pay off as we would always meet our obligations. We understand that the lender will not take borrowed money as a deposit.

Any advise much appreciated

Thank you
Marina

Eldarion

I can't grasp your reasoning behind how you'll be able to save more because you're renting the house you intend to buy over simply savings while you're renting where you currently are.

If like you say you're really bad at saving I can see it being really difficult for you to secure a mortgage...

This is the main problem you need to address regardless of where you're renting for 12 months prior to a purchase.

gemini_girl

There are advertisements on uk tv channels at the moment called help to buy, they say its for people who can afford to pay mortgage but cant save a big deposit thats required. Would be a great idea if it was introduced here. Its very hard to save 20+ k when you are already paying 800/1100 a month on rent with kids etc

Ritchi

If you're finding it hard to save a deposit while renting, you'll find it hard to pay a mortgage when you buy, especially if interest rates were to go up.

If you can't save a deposit, I'd suggest you can't afford to buy and should continue renting until you can.

MarinaLatvia

Thanks for all your replies,

We were able to save €15k in 10 month for our wedding last year, that is on top of the rent we are paying of €950pm, so our repayment capacity is circa €2450 pm, but you see we had set the date and we new that we need the money so we were saving like crazy. I think there used to be savings accounts with PTSB whereby you save for 12 month set amount and then PTSB provides a mortgage, something like that would suit us best.

Thanks a mill

D3PO

MarinaLatvia wrote: »

,we new that we need the money so we were saving like crazy.

and you know that you need the money for a deposit so save like crazy again.

if your that bad with your money then you shouldnt own a house. House buying isnt for the financially irresponsible.

djimi

MarinaLatvia wrote: »

We were able to save €15k in 10 month for our wedding last year, that is on top of the rent we are paying of €950pm, so our repayment capacity is circa €2450 pm, but you see we had set the date and we new that we need the money so we were saving like crazy.

If you can do it once then you can do it again (assuming your circumstances havent significantly changed). If you can save that much while renting then my advice would be to continue doing so; the bigger the deposit you can get the smaller the mortgage that you need. If you can save for 3 years and put together €50k then youll be in a great position.

Eldarion

MarinaLatvia wrote: »

I think there used to be savings accounts with PTSB whereby you save for 12 month set amount and then PTSB provides a mortgage, something like that would suit us best.

Thanks a mill

Don't see why PTSB wouldn't still provide such a service. Don't really see how this would be different from you saving on your own as it's pretty much the same thing in the end. I suppose it gives you a target that you have to meet that comes out of your current account each month but you could really just set that up yourself.

No harm in asking for a meeting with your bank and discussing it with them though. They probably won't take the mortgage application into serious consideration until the 12 months are done though.

MarinaLatvia

if your that bad with your money then you shouldnt own a house. House buying isnt for the financially irresponsible.[/QUOTE]

That's kinda harsh and uncalled for....I wasn't asking for someones opinion whether we should or not own a house.


Anyway, you spent time reading and posting to my tread and I got some good ideas from the posts so I'm very grateful. I guess I was looking for an easy way, buy we just gonna have to say goodbye to holidays, and keep on saving for the next couple years, as we've been renting for the past 12 years, time to get our own home;-)

Cheers!

D3PO

MarinaLatvia wrote: »

That's kinda harsh and uncalled for....I wasn't asking for someones opinion whether we should or not own a house.


I guess I was looking for an easy way.

Its not harsh. The truth is the truth you were looking for an easy way. There is and should not be anything easy about buying a house, theres no point in mollycoddling you you needed a dose of reality and I provided it.

If you dont want to hear the truth then dont ask the question. If you have been renting for 12 years and dont have a deposit together then your either

a) financially irresponsible
b) unable to afford to buy

it appears you are the former based on your ability to save for a wedding but not able to save anything since or in a regular way before or since that event.

If you want to own a house then save a deposit like everybody else learn not to live month to month on your money, and learn to put money away every month.

Even if you are able to save now a deposit you have to get used to saving once you get the house. Interest rates rise, maintenace that is unexpected crops up its no use being able to save 50k in a few years and then go back to a routine of spending all your money and finding your up sh1t creek when something goes wrong after you buy the house.

You may not like the term or agree with it but you are not responsible enough from a money management perspective. Sorry to burst your bubble you may see it as harsh I see it as an honest direct assesment based on your opening post.

Im not trying to offend just trying to make you see the wood form the trees.

_Kaiser_

D3PO wrote: »

Its not harsh. The truth is the truth you were looking for an easy way. There is and should not be anything easy about buying a house, theres no point in mollycoddling you you needed a dose of reality and I provided it.

If you dont want to hear the truth then dont ask the question. If you have been renting for 12 years and dont have a deposit together then your either

a) financially irresponsible
b) unable to afford to buy

it appears you are the former based on your ability to save for a wedding but not able to save anything since or in a regular way before or since that event.

If you want to own a house then save a deposit like everybody else learn not to live month to month on your money, and learn to put money away every month.

Even if you are able to save now a deposit you have to get used to saving once you get the house. Interest rates rise, maintenace that is unexpected crops up its no use being able to save 50k in a few years and then go back to a routine of spending all your money and finidng your up sh1t creek when something goes wrong after you buy the house.

YOu may not like the term or agree with it but you are not responsible enough form a money management perspective. Sorry to burst your bubble you may see it as harsh I see it as an honest direct assesment based on your opening post.

Im not trying to offend jsut trying to make you see the wood form the trees.

Hang on now...

While I actually agree with you, let's not forget that MANY people who bought in the last 15 years were ONLY able to do so as a result of:

- fudging the figures (declaring they were making more than they earned etc)
- 100%+ mortages and other cheap credit
- financial gifts from parents etc

So to be fair, it's a bit much to be chastising the OP when there are many others who were just as irresponsible but who jumped on the "ladder" anyway and are now struggling or just not paying their mortgages at all!
The difference is that government policy and the Irish obsession with owning property means that the majority of these will never actually lose "their" home regardless. It's those of us who didn't go mad who'll pick up the tab instead!

Ireland is THE place to be for reckless, irresponsible behaviour - from average Joe to the "leaders" of our country and industry, and reading some of the threads here in the last few months it's abundantly clear that most people haven't learned a thing!

D3PO

Kaiser2000 wrote: »

Hang on now...

While I actually agree with you, let's not forget that MANY people who bought in the last 15 years were ONLY able to do so as a result of:

- fudging the figures (declaring they were making more than they earned etc)
- 100%+ mortages and other cheap credit
- financial gifts from parents etc

So to be fair, it's a bit much to be chastising the OP when there are many others who were just as irresponsible but who jumped on the "ladder" anyway and are now struggling or just not paying their mortgages at all!

Hang on what.

You seem to think that I think what these people did was ok and not just as irresponsible as the OP. I DONT nor do I have any sympathy for any of these people who are now in difficulty as they are a significant contributor in their own downfall.


However just to add to your point the things you point out should actually act as a lesson to the OP and others about actually doing things right and not looking for shortcuts.

It beggars belief that people have failed to learn from the mess of the past decade.

_Kaiser_

D3PO wrote: »

Hang on what.

You seem to think that I think what these people did was ok and not just as irresponsible as the OP. I DONT nor do I have any sympathy for any of these people who are now in difficulty as they are a significant contributor in their own downfall.


However just to add to your point the things you point out should actually act as a lesson to the OP and others about actually doing things right and not looking for shortcuts.

It beggars belief that people have failed to learn from the mess of the past decade.

Why should they though? I haven't seen any mass evictions of those who can't/won't pay, have you? The rental market at the moment is ridiculous and still seen as a stepping stone/last resort by all concerned

It's clear that the government, media, and other interests are doing their very best to start the whole bubble again! Even our so-called leaders haven't learned anything! Property ownership and the buying and selling of overpriced poorly-built shoeboxes is the cornerstone of our entire economy.

Won't surprise me in the slightest when the phone calls offering me "free money" start again in another year or two.

D3PO

So two wrongs make a right now ?

Explain to me how the government are trying to start another bubble ?

Would it be them proposing taxes on land banks zoned for bulding to ease the supply issue ....
Would it be the fact they abolised all incentives for FTBs ....
Would it be the fact the introdeced a property tax making the cost of ownership higher .......
Would it be the lack of pressure the government as the key stakeholder of some of the Irish banks are making to having said banks reduce variable rates on mortgaged .....

etc etc etc

And of course then theres the banks.

Would the fact that mortgage lending is down quarter on quarter be a contributor to this ....
Would the fact that significantly more stringent lending policies are in place be a contributor ......

How exactly are these players contributing to creating a new bubble ....

djimi

Kaiser2000 wrote: »

Why should they though? It's clear that the government, media, and other interests are doing their very best to start the whole bubble again! Even our so-called leaders haven't learned anything! Property ownership and the buying and selling of overpriced poorly-built shoeboxes is the cornerstone of our entire economy.

Won't surprise me in the slightest when the phone calls offering me "free money" start again in another year or two.

And at some point that bubble will burst. Im lucky enough that I was a bit too young to buy during the 2000s when money was being handed out like free candy, but while I might like to be in a position to now start thinking about owning a house, I am very glad that I am not stuck in a negative equity situation in a house that does not suit my needs and that I cannot get rid of. Having seen what happened over the last decade or so, I would have thought that anyone who managed to avoid the mess the last time around would be very wise to it now, and would take any step possible to ensure that they dont get trapped in it when it inevitably happens again. By this I mean either holding out to buy a house that actually suits your long term needs (as opposed to a "starter house" that is too small to house a family or too far away from where you actually want to live), or saving enough of a deposit to ensure that your mortgage is sufficiently small so as to not trap you in the property should you need to sell and house prices end up falling.