Should we buy while we can still get a mortgage?

Hi All,

I’ve never posted a topic but I think I’ve come to the point where I need some advice.

We’ve been looking to buy a house in North Dublin (Santry, Glasnevin, Whitehall etc) and after about 5 months of looking have found a house we like enough to buy. I know prices will still drop but the quality of properties that are coming onto the market are obviously not great and need too much work for what you would end up paying for them. We have been approved for a mortgage but I’m worried that if we wait another 6-12 months to buy we won’t get approval.

Do you think we should wait and take the risk of not getting mortgage approval (or of not getting enough to buy within the area we want)?
I noticed on another post someone recommended waiting until early 2010- would this be a good compromise??

Early 2010 as a compromise!!! That’s about 4 months away. I’m trying not to sound rude as I don’t know your situation but it sounds like the money is burning a hole in your pocket. If you personal circumstances will change in such a short time maybe you should ask yourself should you be getting a mortgage for your envisaged amount. I do understand that rates for new customers could go up while those for existing customers may lag but I could also see prices come down to meet this affordability.
The country is in a shocking state. The next two budgets are going to shatter confidence so much even Austin Hughes won’t be able to spin it.
Rent,save and enjoy life. As I mentioned I don’t know all your personal circumstances but that’s the way I would be looking at it.

If you can’t get the mortgage, then why would the people you would be competing against to purchase the property?

Exactly what grumpy said. If because of the economic situation the banks will refuse to lend you as much, they will also refuse to lend your competitors for a property as much. So you remain even relative to them.

However you’d then end up paying less for the actual property, so it’s a good thing for you if mortgage lending gets even tighter.

People will still have to sell, banks will still loan, even if it’s much less.
If they banks completely stop lending, then either a foreign bank will lend once property prices in ireland are sane, or if there’s no foreign banks able to lend, how f*cked would the world economy have to be, and why would you want a mortgage in such a situation?

Do you have small children?
Are either of you at serious risk of losing a job? Why would you not get approval in 6 months time?
Do you need both incomes combined to afford the mortgage?

If you bought and got a large mortgage, then you lost a job, you’d be a lot worse off than someone renting who’d lost a job. The emotional pressure and lack of options would weigh very heavy on you. Even if you are still renting when you have a child, the fact that you haven’t bought yet gives you great flexibility regarding choosing schools etc when that time comes.

You say you have found a house you ‘like enough to buy’. Doesn’t sound like you love it. Sounds like you are just fed up looking and it will ‘do’.
At least when renting you can live in a house in an area that you like. 5 months looking is not long enough to be looking in my view. I’ve been househunting nearly 2.5 yrs. Do you watch the irishpropertywatch website for price drops? Do you have Property Bee add on for Daft installed so you can view the history of price drops on certain properties?

Quite simply, why would you buy in a falling market unless you have family pressures to own your own home? Even 1200 a month rent for a year is only 14k a year (and I think any house you choose next year, will you could get at least 14k off the price so your annual rent is being covered by the savings you are making in a falling market).

December/January is the slowest time for property sales. I would do nothing now until February or March next year, when we will have had the budget decisions. Also the New Year may bring more choice.

Thank you for you comment, I really appreciate it.

I think you are right, reading back it does sound like the money is burning a hole in our pockets.

Our circumstances (touch wood) don’t look like they will change and we are definitely not borrowing more than we can afford. We can get, and have gotten, the mortgage now but will this always be the case? And also, as you say rates will go up for new customers.
My main worry is that the price of houses in our desired areas and the mortgage we will get won’t correspond in 12months time. We both have the fear of ending up living in Meath like everyone else we know!

This is exactly what I was concerned about. You and grumpy have made a very good point- thank you so much.

2.5 yrs- God bless you stamina! Do use the irishpropertywatch website.
We have no family pressures. My partner has less job security than I but my income could cover the repayments. And you’re right we are fed up looking.

I am also a bit sick of not knowing what exactly to do. I am going to take your advice and wait until Feb/ March at least. Thank you.

I wont tell what you should do but I will tell what we did to get the most out of the changing market. We advertised for a house to rent as a reliable couple, it took a few weeks to weed through the calls but we hooked a super house in a great location for a great rate and cut out the middle man. The yield is currently 2%. The ads cost but it was well worth it. Our savings are piling up nicely and our lifestyle haven’t changed much, it’s actually improved greatly in our new rental.

Over the years we have collected our own furniture so anytime we move it’s not as big change each time. Another bonus with this approach is that we found letters who had no problem with us painting rooms whatever way we wanted or changing fittings, they even paid for the paint. Plus having vetted our landlord we know that they are not overextended and so unlikely to want to suddenly sell, they share the pinster view of the market and are only concerned with keeping the place occupied without trouble.

We’re keeping our options open, emigration is a real option so when that time comes we can just pack our home into a container and move. As others have mentioned what’s coming down the line isn’t pretty and so it’s a another plus to allow yourself the freedom to adapt to the changing economy.

Just remember, a house is not a home. Our home is been built on memories and all we share.

Catbear where did you advertise ?

I’m Kilkenny based so the local rag did the trick, I don’t know if there is a local equivalent in Dublin but I’d imagine a box ad in the Herald could do the trick. Just specify which areas you’re interested in. Make sure it’s a box ad!!! The one time we put in the small ads wanted section we didn’t get any calls.
We had a few callers trying to sell us houses, I said to one guy “if you were in ours shoes what would you do?”, he didn’t reply but said if you change your mind to give him a call. Even though we stated not to ring until after 6pm, they started calling at lunch time. We actually had to turn the phone off at 8pm. There’s a lot crap out there but there are a few gems with realistic LLs.