Questions for single house buyers

kaji

I'm in my early 30s, single and sick of renting and sharing with others. I long for a place of my own. Was looking at houses online recently, these are just a few ideas really, I'm not set on these houses, but I am using them to get the ball rolling so I can make my mind up-

Option 1- A nice bungalow about 4km outside of a town where I live, for €200,000 that I could see myself living in.

Option 2- saw a nice townhouse in the centre of the town on a nice street for €235,000.

I have €40,000 saved up for a deposit and my parents said they can give me €15,000 maximum. I earn about €40,000 gross per year, so I could borrow up to €140,000. Should I keep renting/sharing and try to save more money? Or should I just go for it? A mortgage seems daunting to me, mainly because I'm single. I feel like I would be uncomfortable getting a large mortgage in case anything happens, like losing my job or healthwise.

Another option would be to go for something much cheaper (say 100-130), if they exist in your locality. You would have the benefit of your own place, and a mortgage that you could pay off in a few years. After that you might find that your vision of future housing might have changed and you will have cash and flexibility to take the next move.
Shackling yourself to a big mortgage, that you wont be able to make a dent on for the next 20/30 years isn't a good idea in my opinion.

Ursus Horribilis

Don't forget that buying a house will set you back around €5k between solicitors fees, stamp duty and surveys.

I'm a single house buyer and I've two pieces of advice for you.
Firstly, don't overstretch yourself financially. As well as paying full whack for the electricity, heating, broadband etc, you'll be paying property tax, house insurance and generally maintaining the property. Also, even if you don't go mad buying furniture and things for the house you're still going to find yourself spending more money than you think. Also, don't spend every last penny you have on the house. Leave some as a rainy day fund for unexpected expenses. What if you need dental work done or something breaks in the car?

Secondly, buy something you'll be happy to live in and what you feel you can sell should your circumstances change. Make out a list of things you'd like in a house and see how many tick boxes for you. You'll probably have to compromise anyway.

SarahMollie

I'm also a single house buyer - but I have an OH who lives with me and pays me a nominal rent. However, I never would have bought a place that I couldnt afford single handed.

Would you consider getting someone in under the rent a room scheme, maybe even for year one until you get comfortable? It might allow you to build up a small buffer of savings that could make you feel more comfortable with the mortgage debt.

Ursus Horribilis

I'm puzzled. With the figures you're outlining here, I'm not seeing how you could afford the townhouse. Am I missing something?

johnnyskeleton

Ursus Horribilis wrote: »

I'm puzzled. With the figures you're outlining here, I'm not seeing how you could afford the townhouse. Am I missing something?

Presumably with a budget of 195k, he/she could bid 190k on the 200k asking

quickbeam

^^ Agree with this. €140K borrowed + €40K saved + €15K from parents, means the most you can spend on a house is €195K, right? That doesn't even take in to account what you'd need for fees and furnishings. I'd keep saving for a while yet.

Once you do get a mortgage then at your salary you shouldn't have much trouble paying it off. I borrowed about the same 10+ years ago, went for a 30 year mortgage, and had no problems making repayments and even paid a little extra off if I had it.

Ursus Horribilis

johnnyskeleton wrote: »

Presumably with a budget of 195k, he/she could bid 190k on the 200k asking

I meant the townhouse that's selling for €235k.

kaji

Ursus Horribilis wrote: »

I meant the townhouse that's selling for €235k.

OP here. Sorry, I just meant- should I keep saving for a while more and then go for a townhouse that costs a bit more, or should I settle now and buy a bungalow a bit further out from the town- something I could afford now.

kaji

OP here- I suppose I didn't factor in all the extra costs involved with buying. I think I will save for 1 more year and then try to buy something. Sharing a house with others is kind of soul destroying for me at the moment.

o1s1n

Being single and living in a bungalow 4km out of a town might get a bit lonely, have you lived on your own for lengths of time before?

I really hated sharing a house with others and do really enjoy my own company, but the brief period I lived on my own in a three bedroom house outside of town did get a bit lonely at times.

Brego888

kaji wrote: »

OP here. Sorry, I just meant- should I keep saving for a while more and then go for a townhouse that costs a bit more, or should I settle now and buy a bungalow a bit further out from the town- something I could afford now.

You'll be saving for a long long time to get the extra €40,000 for the town house when your gross income is €40,000. Rule the town house out.

Carlos Orange

First things first, where do you want to live?
Presumably this is in town or you wouldn't need to post (but maybe not).

Then consider how much better (in whatever way matters to you) your life can be with the money you save from the cheaper mortgage. Dropping some figures into a mortgage calculator it seems to be about €50K difference over the lifetime of the mortgage.

Then remember asking prices are not sales prices. Depending on the market you may end up paying more than the asking price , possibly a good bit more.

DoozerT6

OP remember also that prices are climbing again - that townhouse that costs €235k now might be €255k or more in a year/18 months time if there's any demand in your locality for housing. Honestly, I would look for somewhere cheaper that you could maybe stay in for five years or so. As Ursus posted above, remember that every single bill and cost associated with buying and running a house will be down to you alone unless you get tenants in, which I presume you won't want to do.

If you're single, unless you're VERY active socially and/or very motivated to become so, I would avoid the house outside the town. You could find yourself becoming quite lonely without even a neighbours lights to see on a dark night. Also someone living alone in a more rural location could be a target for burglaries. Are there more affordable options for you in the town itself that you would be happy with?

riclad

prices are going up, you save 20k, that house is now gone up 30k in value.
It,s like running at 20mph after a car that moves at 30mph , you may never catch up.

See is there anything you can buy now,
see daft.ie houses under 185k .

mel123

One thing i have learned from the crash....buy the house you see yourself living in for life, because you never know whats around the corner and you could be stuck in it. So if that means renting/saving longer, then do so.

I have friends who bought during the boom, thinking ah ill stay for a year or two. Or friends who bought apartments with the intention of only using them as a stepping stone. Said friends are now stuck with negative equity properties that they more than likely are in for life and some of them absolutely loathe the area they live in. Think of all possibilities before you buy.

Wesser

kaji wrote: »

I'm in my early 30s, single and sick of renting and sharing with others. I long for a place of my own. Was looking at houses online recently, these are just a few ideas really, I'm not set on these houses, but I am using them to get the ball rolling so I can make my mind up-

Option 1- A nice bungalow about 4km outside of a town where I live, for €200,000 that I could see myself living in.

Option 2- saw a nice townhouse in the centre of the town on a nice street for €235,000.

I have €40,000 saved up for a deposit and my parents said they can give me €15,000 maximum. I earn about €40,000 gross per year, so I could borrow up to €140,000. Should I keep renting/sharing and try to save more money? Or should I just go for it? A mortgage seems daunting to me, mainly because I'm single. I feel like I would be uncomfortable getting a large mortgage in case anything happens, like losing my job or healthwise.

Hello kaji and thank you for your message. I
Yes it is stressful getting a mortgage by yourself but sometimes in life we have to take risks. Your risk will be lessened by the fact that you will have to take out mortgage protection and income protection sp if you get seriously sick you will be supported to a point and threrefore some if the risk is mitigated.

Also you will only be able to borrow a certain amount so you will be limited in how much you have. This also brings down your risk.

I know how you feel and I am in
The middle of doing the same myself. I went through that stage too where I was thinking about what could go wrong etc but in a way I have kind of gotten over that hump now and have decided to go for it. In life we have to take ( small ) risks sometimes otherwise life will never move forward.

First thing is budget
Second in location.

So you now have a specific budget and then looking in and around a certain
Location. That will control your options. Best of luck.

Ursus Horribilis

Whatever you choose to do, don't try to talk yourself into buying something you're not 100% happy with. I can relate to how you feel about house sharing in your 30s (been there, was sick of it by the end) but also understand where you're coming from as a single person buying. There is always that worry that you're not going to see something you like in your price range. Not to mention the fear that if you don't buy now, you've missed the boat and you'll be stuck renting. Don't go for something just because you can afford it. You'll have plenty of time to regret your decision afterwards. Oh, and be careful who you choose to come house hunting with you. You don't need a yes person - you need somebody who'll not be afraid to give you their honest opinion.

Mrs OBumble

Do you have a partner - can you see yourself setting donw with kids? Is yes, then I can see why you'd be looking at 4-brm houses. But in that case, what about your partner's income? If you don't have the partner yet, then how can you know what is a suitable location to buy a house in?

If not, then what on earth will you be doing with 4brms? Especially when there's limited housing supply, it doesn't seem right that you would be leaving 2 of them free (assuming you use one for a study).

riclad

See whats avaidable in the market, buy at least a 2 bed house,apartment ,see the program rte tv .get me a home.
if house is advertised for 220 ,it may go for 240k plus.
See property price register ,what are house,s selling for in your area .
you,ll be competing with couples with twice your income if you are buying in dublin.
many people bought in the boom , 1 bed units and now they cant sell,
Due to negative equity.

caviardreams

What about an apartment OP? You could possibly get one in the location of your preference, rather than compromising on location for something bigger.

One_Of_Shanks

The key thing here is that you'll get advice about buying under your current circumstances. And that's fine, that's the question you asked.

BUT what happens when/if things change? For instance do you see yourself meeting someone and starting a family? Or are you quite sure that you'll be single long term?
They're big questions but they're important ones.

Quick example... I was going out with a girl where I wanted to settle down and do the family thing but she didnt.
So after asking her several times to get a house together she wouldn't commit so I bought a 2 bed apartment for 260k and we went our separate ways.
Two years later we were back together and now she's on the same page as me so we decide to buy a house and start a family.
The amount of money we wasted between all that is massive.
Solicitors fees x 2, loss of first time buyers rights, estate agent fees, moving costs, furnishings x 2, etc, etc.

Moving house and selling to buy again is incredibly expensive when you factor in things that wouldn't even occur to you initially.
We wasted tens of thousands.

All I'm saying is don't just think about your current situation. Try to think about where you might be at in 3 or 4 years time.

If you're unsure, stay renting until you're sure.

Good luck.

riclad

You might not be able to afford to buy a house in central dublin.
IF you wait til you meet someone ,you might never be able to afford to buy one.house prices in dublin go up every year.
i know loads of people who never had children .
Its like most people buy a basic car, they don,t wait til they can afford to buy a new bmw ,it might never happen.

amtc

I can't understand this being lonely thing. I bought my house on my own 15 years ago. I love it. Boyfriend laughs at me because after two nights he knows time to go home. He lives on own too. My best friend is one of seven, can't understand it. Suggested rent a room for company. I'm perfectly fine on my own. I travel a lot for work. I work from home a lot so need peace to write. My home is my refuge. For op though I'd stretch yourself for location.

riclad

Waiting 4 years is not a good idea ,you save 20k, house prices could go up by 30k per year.Most single people cant afford to buy a 3bed house
just in case they meet someone and have kids .

davindub

Good thinking. If you can stick sharing for a while longer, buy the best house within your price range that you can easily rent out rooms in.

By paying the mortgage you are building up your own capital for if / when you sell the house, also you keep pace with the house price market. So any gains you make are CGT free (once you are living there)

Also you can rent out rooms up to a max of 12k this year and 14k next year tax free (= equiv 28k salary increase) so throw that into your mortgage repayments as well. Your cost of finance will be approx 4.5 - 5.5 k per year for the first few years so it makes sense to pay off the mortgage as much as possible in the first few years.

Obviously there is some risk, but the rental market bounces back quickly and house prices only increase in the long term.