Hello all, I'm new on this forum and could really use your collective insights, because my brain is a bit fogged by trying to factor in everything and make a 'good' decision. Help (or face punching if necessary) is very welcome!
This is the situation:
I'm a graduate student right now, renting a cheap government subsidized student complex (in the Netherlands, I'm dutch). I live together with my boyfriend for five years, who has had a job for about a year and a half now. It's a stable job and likes his job and workplace. However, he works at a school in the middle of nowhere (public transportation-wise) and drives 80 km a day to get there. He hates his commute and would love to move closer to work. Because I will graduate beginning 2013, we will be forced to move from campus before June 2014. I have a very temporary job right now, will end by January.
I would love to move closer to his job, but.... I do not have a car (don't want one either), and would thus require a house within a village max. 30 min. biking from a train station. Rents are pricy in that area (think: three times what we are renting for now). This is due to a very small supply of houses, mostly big houses with equivalent big rents. With our current income, we would not be able to apply for such a house.
Other option would be to buy a house. I calculated that living expenses would be less in this case compared to renting (but more than what we pay in rent now). We are both a bit risk averse and fear for a further market decline, leaving us possibly 'under water' on our mortgage. Buying without a mortgage as a 20 something on dutch housing market is only an option for some lucky few (not us unfortunately), because prices are about 6 times (moderate) yearly income. We have never lived in one of the villages we are considering. No clue how it would be to live there, thus further increasing the risk of being 'stuck' with a unsalable house if village life somehow doesn't work out for us.
I have a cash amount of 25K saved up from my student loans (borrowed at 1.39% from government, on a private savingsaccount earning 2.4%), and I would like to invest this in a house to bring down the mortgage. I would rather pay interest to the state than to a bank, cause (bank) mortgage interests are about 5% here in the Netherlands.
My question:
What is wise for us when we are going to move? Rent or buy, what location? Stay here as long as we can or move as fast as possible?
I really hope you guys can help me figure this out :)