Mortgages.scot

This question came in a couple of days ago, it is good to be asking questions about home buying before committing and I fully understand what a big decision it is and how it may cause anyone to have second thoughts.

Hi Lee, been reading a few of your posts and wanted to get your views. I am 25, living in Inverness and saving for a deposit to buy a house. Well, a flat. Nearly there with the deposit, should be good in about 6 months. The more I think about it though I am getting cold feet. Mortgage payments, gas and electricity which are rising to a ridiculous level, council tax and everything else. I just wonder whether renting would be simpler and forgetting about buying. Not sure what I am asking just wanted your views, seem like a nice clued up guy.

Thanks for your comments. The above quote is just part of your note to me, I understand that a change of circumstance is coming along and you have to make a choice, rent or buy. Nothing negative here, just a positive change that has pushed you forward.

My experiences

I completely get where you are and the decisions you are facing. 24 years ago I bought the home I am in right now. I went through all the same thought processes you are right now. I kept myself awake at night before and after committing to buying the home, every emotion. Had I done the right thing? Could I afford it?

Today my mortgage is paid off, the house is mine and it may be easy to reflect back with positivity. The mortgage I took on even at that time was big for my income. What I was taking on was at the higher end of my income (and my wife's). At £54k that might not be seen as much today but between us, we had an income of £22k and 2 children.

The house wasn't our first choice but with an interest rate of 7.95% options were limited.

Add on all the elements you have mentioned, council tax, utilities, insurance plus 2 children it all added up to a very clear, can we really afford all this?

To this day I vividly remember the week before getting the keys, we were out for the day with the kids visiting Loch Lomond. Family friends were with us and they were telling us how they were approaching the end of their mortgage. I was sitting on a bench staring out across the loch thinking to myself "25 years we are going to have to make these large (to me) mortgage payments".

It was a struggle at times, you feel as if all you are doing is working to pay for the home and nothing else. Was it all worth it? Yes, I would say so. Despite the struggles, I like my family friends 24 years ago could finally say "I am approaching the end of the mortgage". It was a good feeling.

Rent or buy?

I get where you are going with your choices. Is it going to be less of a commitment to renting? Will it be easier? Will I feel better than being tied to a mortgage?

That is a decision you are going to have to think through. Sometimes I do feel like a nation of homebuyers it is a requirement rather than a choice to buy a home. That said, unlike other countries, our rental sector is not that great. Whether through a local authority or the private sector there are as many issues vs buying.

It does seem like your biggest fear is the long term cost commitment not just of the mortgage but the associated costs. So let's be clear, there are not really any differences to renting from that perspective.

Whether renting or buying you have two basics costs

• Payments to a landlord
• Payments to a mortgage provider

In the majority of cases, you will find that the mortgage payments are less than rental payments.

Whether you rent or buy the associated costs are always going to be the same

• Gas/Electricity
• Council Tax
• Contents and building Insurance (buildings insurance paid by landlord)

Depending on the situation you may get a furnished flat which takes away the need to spend a lot on those things, but you will still buy some furniture that you want. The cost of maintenance will be higher than renting.

There are of course differences, that is what you need to figure out. I suspect you will find that the overall difference between renting and buying is not as big as you may think.

Questions to ask yourself

I suggest you sit down and really work out the costs along with the advantages and disadvantages of buying. Some things important to me, may not be so important to you. As a suggestion, some questions you need to answer.

• What is the difference in cost between renting and buying?
• Do you want to pay rent for the next 25 years to someone else and have nothing at the end of it?
• If you rent now where are you going to live after your working life? If still renting, how will you fund it?

You are still young, you could certainly rent for a period of time, save more and buy later. You appear to have a good job in a stable industry with prospects. Your income should continue to increase. Whether renting or buying the pain of affordability will be there for a while yet but will get easier as time goes on.

Hope that helps and you make the right decision for yourself.

Stay in touch

I have replied to your email with my contact details, feel free to get in touch with any specific questions you want to talk through further before you choose. Happy to help you in any way I can.