Am I mad not wanting to get a mortgage?

fairyribbon

I’m at that age when all my peers are saving and getting mortgages. Am I mad for not wanting to jump on board? I’m worried that I’m missing out on the chance of gaining a profit in years to come. Part of me wants to just continue to rent and I keep hearing “ it’s dead money” “you won’t own the place” “your paying another person’s mortgages” which are all valid statements but the thoughts of getting into this 25-30 year loan and paying interest and everything else that comes with it seems mad to me especially as the property here seems very overpriced.
I’m also curious- when people do pay off their mortgages do they tend to move and sell at 50-60 years old like they say? I would imagine you would be less likely to move at that age.

Wildly Boaring

Surely the most common plan people have is to have the house paid off before retirement.

Then live in that house rent and mortgage free till carried out in a wooden box?

Need to factor in that house may need bit of money spent on it at say 30 years old.
That worked well for my parents, mortgage pic by say 55, save for a few years, modernise and hopefully that's that.

dubrov

If the alternative is renting in the same place then yes you are mad.

Rents are currently well above mortgages so why would you deliberately want to pay more and end up with no equity at the end.

Only reasons not to buy in this country are if you can't afford it, you are planning on moving soon or you are currently paying very cheap rent below market rates

fairyribbon

dubrov wrote: »

If the alternative is renting in the same place then yes you are mad.

Rents are currently well above mortgages so why would you deliberately want to pay more and end up with no equity at the end.

Only reasons not to buy in this country are if you can't afford it, you are planning on moving soon or you are currently paying very cheap rent below market rates

I should adD- I am planning eventually to live in my parents house rent and mortgage free

dubrov

fairyribbon wrote:

I should adD- I am planning eventually to live in my parents house rent and mortgage free

As long as you are happy with that, then no real reason to buy.

Just be aware, your parents may live into their nineties and if you meet someone you may want a place if your own in future

Wildly Boaring

fairyribbon wrote: »

I should adD- I am planning eventually to live in my parents house rent and mortgage free

Only child?

fairyribbon

Wildly Boaring wrote: »

Only child?

I am not, I think the house will be lest to my sister but I can live in it for as long as I want. So even though I will have a roof over my head , I am feeling pressure to buy an apartment for equity purposes not really necessity. Obviously if I bought a place I would live on it I would not leave it idle.

Tails142

dubrov wrote: »

If the alternative is renting in the same place then yes you are mad.

Rents are currently well above mortgages so why would you deliberately want to pay more and end up with no equity at the end.

Only reasons not to buy in this country are if you can't afford it, you are planning on moving soon or you are currently paying very cheap rent below market rates

Well a few things come to mind - the backside could fall out of the property market and you could go into negative equity, interest rates are at historic lows, these could sky rocket shooting up your mortgage repayments.

I'm saying buying isn't the no brainer move either.

House prices drop, mortgage rates go up, rents fall.

But yeah for the last maybe 10 years buying has made more sense than renting if you can do it. Talk to someone who bought in 2007 though.

Westernyelp

fairyribbon wrote:

I am not, I think the house will be lest to my sister but I can live in it for as long as I want. So even though I will have a roof over my head , I am feeling pressure to buy an apartment for equity purposes not really necessity. Obviously if I bought a place I would live on it I would not leave it idle.

That's a very dodgy assumption to make. Even if you get on wonderfully with all your family

fairyribbon

Westernyelp wrote: »

That's a very dodgy assumption to make. Even if you get on wonderfully with all your family

It’s not an assumption it has been discussed and I have seen the will.

highgiant1985

fairyribbon wrote: »

I should adD- I am planning eventually to live in my parents house rent and mortgage free

you're assuming the house will be available to you in the future. Your plan may work out but if it doesn't what will you do? e.g. what if your parents need the fair deal scheme in the future?https://www.citizensinformation.ie/en/health/health_services/health_services_for_older_people/nursing_homes_support_scheme_1.html or what if your parents fall out with you in later life or decide to give the house to someone else?

The responsible thing to do would be to plan for your own future (be that owning or renting but having a plan for how you would support yourself in retirement for that) and if you do inherit the house from your parents that's a bonus.

Grumpypants

Not mad there are loads of benefits to renting. Lower upkeep costs, you can always just up sticks and move if you need to move for work. A house does trap you to a certain extent.

But at current rent prices you would be spending less on a mortgage and building equity.

For me I just can't see how anyone could afford to rent post retirement. If the pension is 800 a month and rent is 1500-2000. You would need to have serious cash deposit and a private pension just to stay in a house.

Westernyelp

fairyribbon wrote:

It’s not an assumption it has been discussed and I have seen the will.

I don't doubt you. I'm just saying things can change for a million different reasons. In your life and for others involved.

kippy

fairyribbon wrote: »

I’m at that age when all my peers are saving and getting mortgages. Am I mad for not wanting to jump on board? I’m worried that I’m missing out on the chance of gaining a profit in years to come. Part of me wants to just continue to rent and I keep hearing “ it’s dead money” “you won’t own the place” “your paying another person’s mortgages” which are all valid statements but the thoughts of getting into this 25-30 year loan and paying interest and everything else that comes with it seems mad to me especially as the property here seems very overpriced.
I’m also curious- when people do pay off their mortgages do they tend to move and sell at 50-60 years old like they say? I would imagine you would be less likely to move at that age.

Most individuals aren't getting a mortgage to "gain a profit".
They are doing it to gain stability (generally) and are looking at the longer term.
Rentals are fine - you are paying for a service, just like any other service. It has it's positives and it's negatives - the same as owning a property.

In Ireland (generally) people have tended not to downsize in their later years or move location for a few reasons one would think.

Don't go into getting a mortgage to "gain a profit" - that's not the primary reason an individual should be using to buy a property.

beerguts

You should approach your parents regarding their will. If it is indeed left to your sister you should ensure that a provision is made that you have right of residence until your death.
It is best to hash this out now as your post infers that you are assuming this is how it will play out. Don't be naive regards an asset

highgiant1985

fairyribbon wrote: »

It’s not an assumption it has been discussed and I have seen the will.

it is an assumption... the will can be changed or per my previous post other things can happen that could impact on what you might be able to inherit.

fairyribbon

highgiant1985 wrote: »

you're assuming the house will be available to you in the future. Your plan may work out but if it doesn't what will you do? e.g. what if your parents need the fair deal scheme in the future?https://www.citizensinformation.ie/en/health/health_services/health_services_for_older_people/nursing_homes_support_scheme_1.html

or what if you're parents fall out with you in later life or decide to give the house to someone else?

The responsible thing to do would be to plan for your own future (be that owning or renting but having a plan for how you would support yourself in retirement for that) and if you do inherit the house from your parents that's a bonus.

If they don’t I will continue to rent or get a mortgage if needed.Obviously things can change, we could get into a fight , they leave the house to someone else - anything could happen. But I am just talking about the situation in the here and now.my parents have set aside enough money for if they need to go to a nursing home so I don’t have to worry about that

Antares35

highgiant1985 wrote: »

it is an assumption... the will can be changed.

Also be interested to know what the will actually states. E.g is it a right to reside, a life interest. Does OP know about tax implications etc.

punisher5112

If you can buy.... Do it....
Rent out a room or two and be quite comfortable.


It's a pity I wasn't given this advice or kick s9oner

blackbox

fairyribbon wrote: »

I am not, I think the house will be lest to my sister but I can live in it for as long as I want. So even though I will have a roof over my head , I am feeling pressure to buy an apartment for equity purposes not really necessity. Obviously if I bought a place I would live on it I would not leave it idle.

What if something happens to your sister or someone in her family and she decides to sell the house because she needs the money?

I'm not saying you need a mortgage, but you really ought to provide for yourself rather than hope to get something handed to you.

fairyribbon

beerguts wrote: »

You should approach your parents regarding their will. If it is indeed left to your sister you should ensure that a provision is made that you have right of residence until your death.
It is best to hash this out now as your post infers that you are assuming this is how it will play out. Don't be naive regards an asset

Yeah I have a right of resistance I know that as a gaurantee as of now

Bicyclette

fairyribbon wrote: »

I should adD- I am planning eventually to live in my parents house rent and mortgage free

All grand. But what happens if one or both of your parents need to go into a nursing home. And what happens if they have to stay there for years?

My grandmother, an incredible woman, went into a nursing home when she was 84. She lived until she was 98.

I understand the financial implications of a mortgage. And I think now is the wrong time to buy. The market appears to be on a surge at the moment.

But if you do buy and have a mortgage, you will be paying off equity in the house. So that even if you do sell it when you move back to your parents, you will get something out of it.

Two different scenarios:

Alf and Bert. Living in a hypothetical bubble where there is no inflation.

Alf rents a house for 1,000 a month for 12 years . He pays €144,000 in rent plus a deposit of €1,000. He leaves the house at the end of year 12 to go back to his parents. He gets his deposit of €1,000 back.

Bert buys a house for 100,000. He pays €1,000 mortgage a month for 9 years He pays €107,151 plus a deposit of €10,000. He leaves the house at the end of year 12 to go back to his parents. He gets 100,000 plus his deposit back plus the money he saved in the 3 years he wasn't paying a mortgage. Technically a further €36,000 making a sum total of €146,000

Now clearly this is a hypothetical situation and interest and inflation go up and down. But in a vaccuum, this is what would happen. And if you did move back to your parents, that €146,000 would come in nice and handy.

fairyribbon

blackbox wrote: »

What if something happens to your sister or someone in her family and she decides to sell the house because she needs the money?

I'm not saying you need a mortgage, but you really ought to provide for yourself rather than hope to get something handed to you.

Yeah that could happen.

Sheep Shagger

Is this a wind up?

Why would anyone who is going to get given a house or supposably be allowed to live in one rent free bother getting a mortgage?

kippy

Sheep Shagger wrote: »

Is this a wind up?

Why would anyone who is going to get given a house or supposably be allowed to live in one rent free bother getting a mortgage?

In case the whole thing fell through for one reason or another.
Also, the status of the poster wasn't obvious from the initial post.

fairyribbon

Antares35 wrote: »

Also be interested to know what the will actually states. E.g is it a right to reside, a life interest. Does OP know about tax implications etc.

I am aware of tax implications. A will has been made, we have a accountant and tax advisor.I have a right of residence for my life. I can live in the house for as long as needed- all my life if I want.

fairyribbon

Sheep Shagger wrote: »

Is this a wind up?

Why would anyone who is going to get given a house or supposably be allowed to live in one rent free bother getting a mortgage?

For equity reason. I won’t own the house, I just have rights of residence. The house will not be in my name.

punisher5112

fairyribbon wrote: »

For equity reason. I won’t own the house, I just have rights of residence. The house will not be in my name.

So do it, then save your a#s off and buy outright down the line

Louis Friend

To answer the OP’s question, yes, I think your mad.

Whilst rent isn’t “dead money” per se, on the basis that you’re getting accomodation in exchange for money, it kind of is when you compare the two main option.

Rents are typically higher than monthly mortgage payments. When you factor-in the 10/20% deposit, they’re probably similar.

But with one, after 20-30 years, you have nothing.

Whereas with the other, after 20-30 years, you have an asset worth hundreds of thousands of Euro and free-ish accomodation in retirement.

Yes, values can fall, but over decades they shouldn’t.

History Queen

fairyribbon wrote: »

For equity reason. I won’t own the house, I just have rights of residence. The house will not be in my name.

But are you sure it will be rent free? I'm just wondering as I've never come across this before but the rights of residence don't stop your sister charging you rent do they? Just putting myself in her shoes, if I owned a house and had the expense of maintenance I don't think I'd be happy for my sibling to live in it rent free. I wouldn't charge market rate rent but I would expect some sort of contribution towards costs.

Bicyclette

fairyribbon wrote: »

I am not, I think the house will be lest to my sister but I can live in it for as long as I want. So even though I will have a roof over my head , I am feeling pressure to buy an apartment for equity purposes not really necessity. Obviously if I bought a place I would live on it I would not leave it idle.

Just saw this.

Why would you be given a right to stay indefinitely in the house if it is being left to your sister? Do you have a disabling condition or some other reason why your sister should have to allow you stay in the house?

This is a recipe for disaster. Truthfully. Your parents would be better off leaving the house to the pair of you jointly and making sure that one of you bought the other out.

If you are in a position to rent independently, you are in a position to buy independently.