Our Own house ? ...
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Topic: Our Own house ? ...
Posted By: Bubie
Subject: Our Own house ? ...
Date Posted: 13 March 2010 at 7:17pm
Hi Everyone 
Need some advice please  We got offered a house from my partners parents, this happened awhile ago and we are still deciding about it, but it has now can to the time where we have to decided about it.
We are both 19, got our first baby on the way and are currently renting. We worked out that if we are to own our own home and to pay rates and EVERYTHING else included in our fortnightly budget we only have $64 left (This is with putting no money into savings). I know that once bubs arrives we will get help from Winz and get the weekly payment to help out with the baby but im not too sure how much we will get untill the time comes. If we are to stay in our rental we have $140 a fortnight left also before we get the weekly payments from Winz. So my questions is...what would u do in my situation, would you rather own your own home at 19 and not be able to do the simplest things for at least 5 years, ( for example: maybe going away for a night) or to rent and be able to do quite a lot of things and then own your own home later on down the track..? ------------- http://lilypie.com"> 
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Replies:
Posted By: lizzle
Date Posted: 13 March 2010 at 7:25pm
| own house - if you look at the latest news, they are predicting huge rises in rent. and at the ned of the day - you have a house, as opposed to paying someone elses. |
Posted By: _H_
Date Posted: 13 March 2010 at 7:27pm
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Firstly Im still young only 21-
I think you need to look at the bigger picture. how much will you be getting from WINZ? could you maybe do some parttime work when DP is at home to be with the baby? how much will you actually get to go out with a baby? could you look at getting a smaller, cheaper house (or unit) to make things easier? My parents helped us get into our first home and yes it was hard at first. we have been here now 10months and things are getting easier (money wises) plus I love the fact that we are putting money in our future and not just living day-to-day (and paying the landlords mortgage!) if it was me i would make it work and take the offer of help but you need to look at all your opinions and work out what is right for your family ------------- http://lilypie.com" rel="nofollow"> 
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Posted By: myfullhouse
Date Posted: 13 March 2010 at 7:37pm
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I would prefer to own my own home (and do) rather than rent.
Have a look at the http://www.ird.govt.nz/wff-tax-credits/ - IRD website to estimate what WFF payments you might get. You have to estimate your income for the coming year. Since we have been getting fortnightly payments I add on a couple thousand $$ extra onto DH's salary just incase I get the calcs wrong or he gets a payrise, that way we hopefully won't have to repay anything at the end of the year and instead might get a little extra lump sum since I overestimated ------------- Lindsey 
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Posted By: Bubie
Date Posted: 13 March 2010 at 7:37pm
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-H- , Im not too sure how much we would be getting from Winz, im guessing around $100 a week if not more from them. Also the house we have been offered they currently own as a rental and are also selling their own house, so when they sell their's their rental get's sold aswell, so that's why it's either we take this house or we not take the deal really.
It's a good house compared to what is on the market down here atm, it does need work done to it, but everyone has to start somewhere My partner really wants to take the offer and just make do with the money we do have left but im not too sure, i know i would kinda rather be able to do some things and then settle down in a house maybe at the age of 23 or something around there ------------- http://lilypie.com">
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Posted By: kebakat
Date Posted: 13 March 2010 at 7:55pm
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You need to go through the calculators on the working for family site and figure out exactly what you are entitlted to and what you are going to get. You could also get an accomodation supplement possibily.
Take the house.. how long would you be looking at having a mortgage for.. ie 20years, or 30 etc.. because you are so young you can have a long term mortgage which means the payments would be smaller and you could make it work more easily in the short term and then up the payments in a few years time ya know? House prices will end up going up eventually, interest rates will also do the same. The talk about rentals isnt very encouraging either. I'm almost 25, we have been in this house for nearly 4 years now and before that we had a small little townhouse. Getting our own house was the best decision we ever made. Its a major asset, if we don't like something we can change it, we don't get kicked outta our own house, and its better than paying someone elses mortgage off. |
Posted By: emz
Date Posted: 13 March 2010 at 8:43pm
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Take the house - when will you get another chance to? Definitely not for a while once bubs is here.
We bought ours when I was just 20, best decision we ever made. Sure we've lived on bread at times and had to find money from places but I'd rather be keeping an asset than paying someone else money. (Oh and we had less than that for the first 2 years, so it's doable). |
Posted By: bext1
Date Posted: 13 March 2010 at 9:30pm
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I'm with everyone else. Take the opportunity by the horns now. I'm sure that everything will work out for the best! ------------- 
http://lilypie.com"> 
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Posted By: Peanut
Date Posted: 13 March 2010 at 9:47pm
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I do kinda agree just to jump in and do it but you really need to work out what you are entitled too thru WFF etc as $64 for a 2 week period is pretty tight with a NB.
Umm, the other thing is that you could always look at going interest only for a couple of years. I know that you aren't actually paying off any of your mortgage but you still own your own home and have a wee bit more spare. We do this as we tend to make lump sum payments off our mortgage. I agree that its great to get in the market early. I brought my first home at 18 in a okish area for a great price and have worked my way up to a awesome house in a good area. |
Posted By: Bobbie
Date Posted: 13 March 2010 at 9:52pm
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Is the $64 disposable after paying for food etc? If so then you will be fine.
I would be leaning towards getting the house. It's an amazing opportunity. -------------  
 
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Posted By: Bubie
Date Posted: 13 March 2010 at 10:09pm
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Bobbie, the $64 is after paying all the bills,insurance,gas,food, everything apart from putting money away for savings and things like Rego and Doctors and all that ------------- http://lilypie.com">
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Posted By: caitlynsmygirl
Date Posted: 13 March 2010 at 10:40pm
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omg , I would love to be in a position to get our own house.
Even if it meant I had less money , at least you are living in your own home , as others said, look at the bigger picture, look long term, it might be harder for a few years, but put it this way , we were renting a house last year, were only there 7 months and we ended up paying them $25000 in that time . All that money that could have gone on a deposit ,went to someone else . I would totally go with the offer, offers like that don't come along every day ------------- 
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Posted By: caitlynsmygirl
Date Posted: 13 March 2010 at 10:42pm
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oh , and from personal experience, the longer you put off getting into your own home , the harder it is to do .
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Posted By: tishy
Date Posted: 13 March 2010 at 11:18pm
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As long as you are 100% sure that there are no strings attached I'd say go for it.
We got an amazing similar opportunity when we got married, little did I know my Mum wouldn't speak to me for 6 months after a for sale sign went up. 
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Posted By: kiwikid
Date Posted: 14 March 2010 at 3:24am
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As someone who got on the property ladder and then got off again to go overseas I can say from experience that the longer you leave it the harder it is to get on / back on.
The market will change in the next 5yrs and it may mean you just simply wont be able to afford it. Do you have a deposit or is that part of the offer that you dont need one? If you do have a deposit then it might not go as far as you need it to in 5yrs time. With a little extra from WINZ it sounds like you'll have around $100 a fortnight for incidentals, which is actually plenty, if all your costs have been accounted for. You wont be able to have random shopping spree's and fancy holidays but TBH those are nothing compared to the security of owning your own home, hopefully you'll be able to add value to it and in 5yrs or 10yrs sell it and upgrade. As long as there are no strings (would the IL's have an issue if you decided to sell in a few years??) then most definately go for it. Having a little person in your life tends to curb the ability to just go away for a weekend / have a big night out etc so in reality it might not even be that much of a sacrifice and you'll get something great in return!! ------------- 
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Posted By: flakesitchyfeet
Date Posted: 14 March 2010 at 8:03am
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Grab it. I'm 23, have been married 3years, have one child and another on the way, and it's not easy when you can't do all of the WOW! things your mates are doing!
But a house is security, it's an asset. We've owned for coming up to a year now and we don't have to pay someone elses mortgage anymore. Rent, when you have an opportunity like the one you have right now, is throwing money down a drain. Only you know your relationship though, and how much strain a tight budget would put on the family. Good Luck, either way!  -------------  http://lilypie.com"> |
Posted By: minik8e
Date Posted: 14 March 2010 at 9:01am
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Take the offer, provided that you can get the finance you need to buy it! The first 5 years may be tough, but at the end of the day you have something to show for it.
I'm 26 and we bought our first house 2 years ago, so I was 24 then, and we are on high interest rates (9.3%) so things are tight, but we manage. Sure we don't have flash things, and I can't buy clothes I see just cos I want them, we haven't been away at all, not cos we can't afford it but cos it's not practical at the moment. I can't wait for next February when our fixed rate is up and we should be around $100 a week better off. I work part-time when grandparents and DH can watch the girls. If you go to the WFF calculator, definitely calculate how much money you will get, because you will need to know this in your mortgage application. |
Posted By: Blankney94
Date Posted: 14 March 2010 at 1:57pm
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Firstly, congrats on the expected arrival of your baby boy! I'm from In'gill so will be watching the birth column for a 'Riley'. I would like to say house ownership would be a good idea - BUT: * Would you be paying the house off to your parents in law or would you get a bank mortgage? The reason I ask is your parents in law may be prepared to cut you some slack if things got difficult financially. Some banks are not as understanding however. * Is the house you are being offered actually a good deal? * Could you get a house that is cheaper and then make your payments more affordable? * Have you got any way of increasing your income? OK you are very soon expecting your baby, but once things settle down maybe there is something you could do from home? Just some thoughts. ------------- http://lilypie.com"> 
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Posted By: RinTinTin
Date Posted: 14 March 2010 at 2:17pm
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Personally, I'd wait a bit longer. DP is a property investor and has been mentored but NZ's one and only property anaylist, Keiran Trass and the predictions are (based on the past trends of the property cycle) that house prices are going to drop even further. They have to so they balance with average wages. Some rule of thumb they use. ANYWAYS... If they're going to buy you a house that'd be awesome, but house prices and interest rates are going to drop eve further. Hold out for as long as you can, then go for it. If they can buy a mortgagee property then that'll b even better. Waaaaaaaaay cheaper! ------------- http://lilypie.com"> 
http://lilypie.com"> 
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Posted By: Bubie
Date Posted: 14 March 2010 at 5:15pm
SarahMM , The house is a really good offer compared to what is around in Gore atm at the same price, also is fenced and everything we need for a little boy to keep safe 
My partners parents are wanting us to get the morgage from the bank under our name and then they will leave $25000 in it as their deposit on it for us as we dont have any money for one yet, but then later on down the track when we go to sell then we give them that back and keep the rest for us to move on with
Since im new to this whole buying a house thing it is taking me awhile to get my head around everything ------------- http://lilypie.com">
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Posted By: kebakat
Date Posted: 14 March 2010 at 5:46pm
| That sounds like a pretty fair and reasonable offer but make sure if you go through with it get the agreement with his parents down in writing that way everyone will always know where they stand and there will be no fighting over misunderstanding. |
Posted By: yermasyada
Date Posted: 14 March 2010 at 6:38pm
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Hi there,
What an exciting time for you
I'm afraid I'm going to go against the grain here and lean more towards the rental option. Firstly, until you pay off your mortgage, you don't own the house, the bank does. When you rent, that money goes to your land lord. When you have a mortgage, you pay money in terms of interest to the bank. Can you afford the mortgage repayments if interest rates go into double figures? If you conservatively work out what you're repayments would be at 10% interest, then you've got less to worry about for the future. Interest rates will rise! I'm of the firm belief that house prices will fall by at least another 10-15%. Current prices are just not sustainable against our average kiwi wage. I'd agree that getting on the property ladder as soon as possible is the best plan...BUT... you have to be able to afford it in the first place. There's no point landing yourself with years of debt, just for the sake of owning a home. If interest rates increase (or for what ever reason) you find you can't meet your mortgage payments and are forced to sell, you could quite easily find yourself in negative equity and you could be paying back the bank $$$$ for a house that you were forced to sell at a lesser value than what the bank valued it at when you took out your mortgage. Sorry if I sound like the voice of doom and gloom, I don't mean to be. It's just a HUGE financial decision and personally I don't think $64 a fortnight is enough to fall back on when it comes to doctors, dentists, house repairs etc etc What ever you decide, I wish you all the good fortune in the world
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Posted By: minik8e
Date Posted: 15 March 2010 at 7:50am
I would stay well away from a mortgagee sale if I was a first home buyer. The pitfalls and dangers with them, compared to a "normal" house sale, are extremely high, and you have pretty much no protection. If the vendor doesn't want to move out, it can be a costly legal battle to get them out, and they are also entitled to remove all chattels from the house (and it's not uncommon). This includes ovens, carpet if not tacked down, heating etc. The reason for this is that the bank does not have security over the chattels, therefore there is nothing that can be done if they are removed - you just have to replace them. It's fine if you are more experienced with house purchases, however not something I would recommend for a first home buyer. As for house prices...they're currently rising again. In Taranaki they have gone up 7.9%, compared to the national trend of 5.5%, for property prices in the previous year. In Invercargill they have risen 4.3%. They are also predicting that interest rates will rise in the short term... http://www.interest.co.nz - Interest.co.nz is a good website to find out what is going on with interest rates at the moment and see predictions. At the end of the day, it is your choice, however do make sure you can afford it! Definitely find out about what you will be getting from WINZ. If it's around $100 a week, then that increases your "leftover" money per fortnight to over $250 after bills etc. have been paid - which is perfectly fine! |
Mum2Mac wrote:Posted By: Peanut
Date Posted: 15 March 2010 at 8:02am
Well said, Kate! I was stewing on this last night and was coming back into post something but you have said it sooo well. We do both investment and developing (and have done for at the last 7 years) and there is no way we would touch a mortgagee sale. I work in RE as well and some of the houses I have seen at the end have been striped of everything and literally been trashed...personally not worth the risk in my opinion. |
Posted By: minik8e
Date Posted: 15 March 2010 at 8:07am
| Thanks Peanut...I was trying to word it right!! I would go for a (well chosen) mortgagee sale, personally, but I'm well aware of the pitfalls and dangers (my background is in commercial and property law and insurance)!! It's not a great option for those new to the property market, or those who are unfamiliar with property law. |
Posted By: Peanut
Date Posted: 15 March 2010 at 8:11am
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or those that are too lazy to do too much work to the houses before selling them quickly
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Posted By: clover
Date Posted: 15 March 2010 at 9:04am
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Firstly, congratulations on the baby.
A couple of points, have you got confirmed finance from a bank? Most of the lenders have tightened up their criteria, especially around deposits and proof of savings. Having a deposit gifted from a relative won't satisfy their proof of savings criteria. Although, you may be entitled to a Welcome Home Loan? That may have different criteria but we don't deal with that at all. Personally, I think I'd wait. I know that even after spending hours pouring over our budget we spend a lot more on our house than I ever thought we would, if we had less than $65 a week for incidentals (I'm assuming that this money has to cover clothing, unexpected bills, and of course all those 'little' things that go wrong when you own a house) I would be too concerned that we would struggle. JMO but I'm not convinced that house prices are going to drop across the board, they certainly may in some areas but I don't think it will be a country-wide trend. |
Posted By: Hunnybunny
Date Posted: 15 March 2010 at 10:26am
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Bubie- you sound quite similar to us. We had the opportunity to buy a house off my IL's in Invercargill. The house is worth $240- we had to purchase at this valued price otherwise IRD throws up a stink about it being a "gift" or something. Because we couldn't buy the house outright, they have left some money in it for us.
To do this, we had to set up a trust. Basically its to protect both us and the IL's. So we have a IOU written up with the lawyers, and the house is owned by a trust, under DH's name, with DH and the IL's in the trust (so all 3 need to agree on something before anything can be done with the house-eg selling it!) Setting up the trust, doing wills, and buying the house through the lawyers cost about $10k. You might need to talk to your IL's to see if they have looked into doing a trust, as its a big thing $$ wise but good to protect you all. I say go for the house, its do-able on a tight budget, you just gotta be concious of it! |
Posted By: xLUCKYx
Date Posted: 15 March 2010 at 10:27am
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HI Bubie this is all very exciting and it is good you are paying a lot of thought rather than jumping into it.
My partner and I bought our house when I was pregnant with my first baby. We did miss out on things - the budget was very tight especially in the beginning and we had my partners brother come and board with us for some extre $$. It's been 3 years now and things are getting waaay easier - we have now (just this weekend) said bye to our latest 'flatty' and now we have our house to ourselves. If you think of it in a different way.... how much money would you save if you rented?? When you own a house you do have wayyyy more expenses but you are getting something back at the end of the day. It is like savings in a strange way. However you should make sure you can defiinitly afford it and you will need think about having some spare money for unexpected bills or maintenance, for clothes, for heating in winter, doctors visits etc. etc and all the unexpecteds. You will need to have more money than just enough to cover the mortgage and bills. |
Posted By: flakesitchyfeet
Date Posted: 15 March 2010 at 10:59am
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Definately remember to check what you can get on WINZ etc, wff is a massive help, but don't forget rates. Most councils allow you to do it on an easypay system so you can pay fortnightly, instead of being lumped with a bill.
I'm a cross between hunnybunny and you I guess. We have our own home, but have 'borrowed' the land from our inlaws, as it was sitting their as spare essentially. So our mortgage is on the house, and when we sell we pay back the value of the land to the inlaws. Its essentially an interest free loan. HB is right though, the trust protects everyone. It's a pretty sweet deal, and it puts us ahead. I can't help but think that rent in throwing money away and why do that if you don't need to? Banks sure have tightened up in their lending criteria, but if you can't get a mortgage with the bank that the inlaws/people willing to help you out are with, especially if you can see their manager directly, it'll make it a heck of alot easier. I'm under the understand rent/mortgage prices down south are pretty similar anyway? If you continue to rent, how hard will you really be on yourself about saving for that deposit if you'll be doing other bits and peices with your free cash? I don't envy you, thinking through this stuff isn't easy! ------------- http://lilypie.com"> |
Posted By: Booski
Date Posted: 15 March 2010 at 11:24am
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I'd take the opportunity to get into your own home. Not an opportunity that comes along often, and $64 per week of disposable income excluding anything you may get from WFF seems quite ample.
To be honest with a new baby things like a night away are things that just don't tend to happen much anyway, so why not make that 'sacrifice' now while those things may not be practical. ------------- 
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Posted By: Bubie
Date Posted: 15 March 2010 at 1:38pm
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Yeah i do recon that owning our own home would get us better off in the future then the renting side of things, i do admit that if we continued to rent then i would find it very hard to save for a deposit
It makes it a little harder for me as it is my partners parents and at times they are very hard to get on with, his mothers pushes for things to be her way and to what suits her best, so ive got to a little pushing to get it our way, not hers, so i think that my trusting them also has a part to play in my thoughts as i do find her hard to get on with. Thats also why im finding i sway both ways at times and keep changing my mind about things  ------------- http://lilypie.com">
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Posted By: kebakat
Date Posted: 15 March 2010 at 1:40pm
| If you have a formal agreement in writing about the money side of things then she can't just have her way and she can't change her mind on things. I still think its an awesome offer from them, but protect yourself with a formal agreement even if it costs a few hundred to get a lawyer to help with it. |
Posted By: Bubie
Date Posted: 15 March 2010 at 1:46pm
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Yeah i agree with you too on that I want to be safe rather then sorry ------------- http://lilypie.com">
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