METRO - Reader mortgage Q&A

You are in a great position as you can comfortably afford to either buy or rent. Personally, I would buy sooner rather than later but be sure to negotiate hard on the purchase price to protect you from potential falls in property values in the year ahead. A 10% discount off asking price would not be unreasonable for Luton, like most of the country right now. Markets expect political uncertainty to get much better over the next year and for inflation to drop, too, which will ease the pressure on household finances. Mortgage rates look set to hover around 5% for a long time and the days of ultra-cheap borrowing are now firmly behind us. If you buy well, namely a property near to amenities, good schools, transport and green spaces, I’m sure it will make a good asset delivering capital growth in the long term so my advice would be to take the jump and buy ASAP.

Remember everything is relative. Though mortgage interest rates may be higher than they were six months ago, so are rents and they are continuing to rise. Also, each rent payment you make is not an investment in your life, future and goals, but that of your landlord. In general terms, there is no bad time to buy, so long as you take appropriate advice around what to buy and how to finance it and if you keep the property for a significant period of time you will not be at a disadvantage to renting. Your savings are significant and will enable you to secure a much more attractive loan to value product, and it will also make you an attractive purchaser to any potential vendor. And of course the other advantage to looking to buy now is that there is less competition for any properties you may be interested in. Everyone's situation is different, of course, so my advice is to seek out a suitably qualified and experienced mortgage adviser who will be able to discuss your immediate plans and those for your future and steer you effectively to the best and most appropriate solution for you.

Sarah, I specialise in mortgages for people doing their PhD. If you would like to speak more in depth about a situation that thousands of potential first time buyers find themselves in, are told they can’t get a mortgage using their PhD stipend/bursary/scholarship by 99% of lenders and mortgage brokers, when they absolutely can, please get in touch. My PhD Mortgage guide: https://jtmortgages.co.uk/stipend-mortgage/ An entire brand I set up to help PhD candidates get mortgages: https://stipendmortgage.co.uk/ Please look at the story I published via Newspage for even more information: https://app.newspage.co.uk/jamie-thompson-mortgages/news-story/phd-candidates-waste-quarter-of-a-billion-pounds-in-rent “Kevin & Kelly find themselves in a situation that tens of thousands of people are in, and in reality, everyone who has ever bought a house has wondered if this is the right time. I tell all my first time buyers that they need to pass three criteria before knowing if now is a good time to buy. These are; Do you have a stable and reliable income? It sounds like with a fully funded PhD and full time employment you’re in as good a position as anyone else, especially if you approach a lender who will accept your PhD stipend funding as income, though most will not. Can you commit to one location for several years? With the PhD lasting at 3 – 4 years at least I’d say that is the case. And, when buying with somebody, can you commit to that person for a long period of time? I doubt you’d be asking the question in the first place if this was not the case. If you pass all of the above, I’d say it’s a good time to consider buying a house, for you. Emphasis on the for you part. Another year of rent is another year of paying somebody else’s mortgage. You may be able to pick up a bargain as people need to sell quickly when they realise they can’t remortgage for anything like what they did 2 years ago, and as chain free first time buyers you are an excellent buyer for a vendor in this situation. You can get yourselves into a great position to buy, but only if the right place comes up. By getting everything in a row you aren’t committing to anything. You still have a lot of flexibility if things change in the near future. And finally, if you delay and wait until everything in the world seem perfect again, (which it never has) you may end up buying at a time when property prices start creeping up again, but I think it is unlikely interest rates will ever be as low as we saw over much of the last 5 years. Given that most lenders will let you switch to a lower interest rate before you complete, even after they have offered a mortgage, if rates fall much more, you can still benefit from this as you won’t be in a position to complete for a while. The answer to ss now a good time to buy is different for different people and you should focus on the things you know, not those that are out of everyone’s control. If you are buying a property to sell in 2 years and make a profit now probably isn’t the best time to buy. If you a buying property to make your home and live your life in, I can’t think of anyone at anytime that has lived to regret it.

I always tell my clients, there is never a wrong time to buy a home. The most important thing is to make sure the monthly payment of the mortgage and household bills is affordable. If they are, then you should be looking at buying. The problem with waiting for inflation or mortgage rates to drop to where we have been used to seeing them, may not do you any favours. While house prices seem to be reducing in certain areas, it would make more sense to purchase a home during this time and benefit from the equity when house prices eventually increase as they have always done. Wait to buy next year and rates may even be higher depending on where we are as an economy and other factors, and house prices may be on the rise again. Remember, staying in rental accommodation means you are paying your landlords mortgage and you are probably paying the equivalent of 6-7%, if not more. I pose the question, why not own your own home at a rate of 5%? You have enough funds for a deposit for a property in Luton, plus other associated costs, so we just need to make sure there is enough disposable income to cover bills and mortgage payments. It's always best to get advice from a mortgage broker, regardless if you proceed or not, we are here to help everyone we can, in any way we can. It is also important to highlight, with uncertainty with many businesses and redundancies, it's worth assessing the situation with your current employers, although sometimes you may never be able to tell.

I would say the first thing to do is get an idea of your maximum budget by speaking to an adviser and then take a look at the kind of properties available for that budget. If you find the monthly payments are manageable from the cheapest lender, then the benefit to going ahead with a mortgage now as opposed to waiting is that you are on the property ladder and are coming closer to owning the property each month with payments that are affordable. You could always do a shorter term fix if you want to retain flexibility and in the 8-12 weeks before you move in, if lenders reduce rates you could switch to a cheaper product with the same lender.