What would you do?

Discussion in 'Army Pay, Claims & JPA' started by cat695, Apr 20, 2010.

?
  1. Keep saving

    8.7%
  2. Buy

    91.3%

Welcome to the Army Rumour Service, ARRSE

The UK's largest and busiest UNofficial military website.

The heart of the site is the forum area, including:

  1. Guys A question and would like your feedback....bit of background for you first.

    I'm a single staffy living in and on highband (level 4 as of may) and I have no debts/loans other than CSA of 300 quid a month (for the next 5 years).

    I was due to finish my 22 in June 2013 but now have taken VENG so have till June 2018 (and this is on my JPA)..possiblity of reaching WO1.

    I have about 23k saved up and stashed away.

    I save about 800 quid a month (min of 500 quid ever month without fail)

    I have seen a house I fancy (nothing special) and quite fancy having it. one to get out the mess and just have a life outside the wire..would only need a 100k mortgage which is around 550 a month.

    The question

    Would you stay put in the mess and continue to save until you got out

    or

    Buy the house? to live in (then rent out when you get posted in a couple of years...I could get 600pcm rent)


    I'm asking because I can't make up my damn mind and its doing my head in!! Hence why I'm posting in here at 11 o clock at night.
     
  2. Wordsmith

    Wordsmith LE Book Reviewer

    You need to do a spreadsheet showing the cumlative costs/benefits of hte different courses of action until you get out in 2018.

    Option 1 is not to buy, live in army accommodation and save
    Option 2 is buy and live in the house
    Option 3 is to buy and rent out the house

    You'll need to factor in things like how the equity in the house will be affected by house price inflation, etc.

    The best option for you is the one that leaves you worth the most in 2018.

    On a personal level, I've found that collecting the information and setting out the calculations often clarifies my mind on the best course of action to take.

    Wordsmith.
     
  3. I can see why you're getting frantic. The mortgage repayment exceeds your minimum saving, though you could cover it with your flush months. But then there's the Council Tax, the electric, gas, insurance, furnishings, repairs, phone bill, water bill, etc.

    On the other hand, interest rates are so low that it's not worth saving until you retire, by which time houses could well be less affordable.

    Have a closer look at your finances. If you come close to struggling, rethink the idea of buying a house before you actually buy one. Underestimate your ability to pay the bills and you could end up in a world of financial hurt.
     
  4. Buy the house..............or blow 23k on something totally pointless and unnecessary!

    (I can't sleep, which is why I'm posting on here at half one in the morning!)
     
  5. Get on the property ladder now.
    Getting a mortgage when you are stacking shelves at Asda will be much more difficult than the situation you find yourself in now.
    I waited until I was 18 years in before I bought and regret not buying sooner.
    As long as you buy wise and soon you should see a growth in your investment after this lot of fcuking clowns are kicked out.
    Oh and don't use all your savings as a deposit.
     
  6. Had a similar situation with 4 years to go for 22.

    Took the plunge and bought a property, 2 bed flat. The biggest worry is down time if you are renting it out,ie: no tenants for long periods.
    You need to do serious research locally into ,type to buy, good letting agents, tenants( hospital staff/ uni lecturers etc are good)

    As some one has said financially you have to under estimate your situation, factor in for instance that over a 5 year period you might have 12 months with no tenant.

    It worked out ok for us, but got hairy at times, only you can decide, but if you buy clever you can increase your nest egg. It's an investment not a home.
     
  7. Location location location. What area is it in? Is it desireable. Will the property increase in value more than your savings will (I think it probably will with the % rate at the moment)

    Normally you can't go wrong with bricks and mortar.
     
  8. My advice would be to buy now. House prices are on the up - we have hit a very big trough, and you only know you've been in one of them when you're on the way up, if you catch my meaning.

    Ultimately, you will always gain with a house - even if the prices crash, they will always go up again, and then some. Far more in fact, than your savings on 0.5% interest.

    Consider people that purchased in 1975 - despite however many recessions, Black Wednesday etc - what cost them £5K back then is probably now worth £250K (in Reading for example).

    And when you get out - you can always use a large portion of your gratuity to drastically reduce the balance of your mortgage and better still, if you are able to afford to maintain a similar payment after reducing the balance, your mortgage term will drastically decrease from 25 years, to maybe 15 or even 10.

    Good luck.

    Just reading that back - I said 'large portion' <snigger>
     
  9. No brainer - buy property now! You can afford it and property prices will only rise into the future and they have started already slowly. Even if you bought it and rented straight away, you are on the property ladder. If you leave it until you leave the colours, the chances are you won't be able to afford what you want and you will be reliant on a reasonably high paid job to pay the mortgage and live a reasonable life. Its a big step, but unless you want to rent or live in a concil house for the rest of your days, BUY NOW. Good luck :D
     
  10. Buy the house - simples! It's gonna make more gelt for you in the long run.
     
  11. Sorry, forgot to add - bricks and mortar will always give you a better return on your hard earned than any savings scheme (in the long term) which is typically 3.0% if you lock in for 3 years+. :D
     
  12. Buy now stating that you will be living in it for the Banks data.

    then rent it out and live in the mess . Rwent will pay for the morg and you still save the cash to pay off a huge wedge when you retire.
     
  13. I think it was Thomas Jefferson (though if it wasn't who cares) who said "Buy land-they don't make it any more"
     
  14. All this advice to look to your finances and figure out if you will be better off if the value of the house rises etc etc is all well and good but forgets the human factor.

    Are you buying the house with an eye to making a profit or a home?

    The house prices here are very stagnant, we don't have the huge population growth as in the UK but the fact that my house is only worth a couple of % more than when I bought it doesn't worry me as I have no plans to sell.

    If you just want to be financially secure then you could save all your money in a high interst account and live in a tent.
     
  15. Buy now. If you rent it out without permission from your lender however, your insurance may be invalid, and you will be in breach of your mortgage terms.

    I have a flat that I let and it would be a bit squeaky when there is no-one in there, however, by furnishing it really well and being a good landlord (ie-sorting things within 24hours, offering to stay in for contractors etc) I have had one day unoccupied in 24months and that was for the change over of tenants.

    If you live in it, you will never want to live in again!!