First time buy, excitement and worry.What is your advice or story?

[NutterzUK]

Hi,

This is an exciting time for my partner and I, we have a lot going on, it's slightly stressful and it's certainly going to be a bit of a rollercoaster. I wanted to start a thread to just ask for opinions on things, advice and anything from "no, that's an awful idea" to "yep, sounds good". Generally I just want to speak to people , let me know your experiences too and perhaps there are people in the same situation on here at the moment.

So, my situation is that I am a PhD student studying Computer Science in my first year at the same university I did my undergraduate studies. PhD students receive a stipend, I receive £13,500 with no tax, I also do some extra labs and teaching on top which probably over the year might earn me about £4,000.. of course that is casual work though and so not guaranteed. My partner is in her final year of her Masters course studying Genetics and earns a little on the side doing web work for a company she's been with for 3.5 years, with it being her final year though she has not a huge amount of time for work, so it's next to nothing really at the moment. She finished soon though so will be (hopefully) working.
We have looked

We currently pay £600 a month between us in rent, and so figured out after looking at online mortgage calculators that for a property even up to £80,000 the repayments would be around £350 a month, saving us a fair amount of money and actually going towards something rather than just rent. Of course with that comes a fair amount of risk and there will be maintenance to do, but overall we felt it's time to make a move for it. After speaking to banks etc, the amount they will accept as income is just my £13,500 since nothing else has a contract. This means we can borrow £54,000 with a 10% deposit making £60,000. OR we can wait until my partner has a job and has finished uni. Payments on that are no problem at all since I earn extra income through teaching which can't be counted, and the same with her web work. We saved up some and received some money from parents also for the deposit and found a property we fell in love with (after viewing many).

The issue is, it's a repossessed house. That means there is some chance of putting in an offer, it going to public viewing, paying solicitors fees and surveys and then getting gazumped by someone paying a higher price at the last minute. We however are lucky to have a great relationship with our landlord who has 25 properties in the area. He invites us over, I fix his computer things and he will come around on viewings with us to let us know what he thinks of them (Since he has done maintenance on 25 properties, he knows his stuff!). It got the go-ahead from him, and my parents for the house we fell in love with, but it's a lot of work. The whole thing needs re-plastering pretty much, the electric and gas are turned off so we don't know if they will work or not (no guarantee but who knows). The boiler is old(ish) and the fuse box will need replacing. All the carpets will need to be replaced and of course painting, decorating, fixing squeeky floorboards etc. It seems structurally sound though and our current landlord attests to that, who I really trust.

There is currently an offer at asking from another buyer, a cash buyer actually. We are in a good position too as it's a first time buy there is no chain, but those things don't matter with a repossessed house as it seems it will just go to the highest offer, which is now us. We are budgeting for the things that will all need doing before we can move in to the house, such as plastering as it will make an almighty mess, and think we just about have everything covers (haha,.. at least we think). We would spend the next few years doing it up a little until after my PhD finishes we will probably sell and move on. It's not the best area, not the worst, we could certainly get a better area if we waited and rented again elsewhere before buying, however our contract is up in June on the place we are in and we don't really want to sign another long contract, and we like the place we found. It would mean we can save some money next year to spend on the house, but again knowing that the value won't go up too much. Recently 3 bedroom semis (this is a 2 bed terrace) have been on in the area for around £80,000, so there isn't a huge amount to be gained. Gaining isn't really the plan though it's more just saving on rent and having a home which is ours. I would like to put a whiteboard up and buy a dishwasher, I can't in rented accommodation, and so it's not quite home.

So we put the offer in, we are waiting for the public notice that has to be served for 7 days, we are going to start speaking to solicitors and frankly, that's all new and rather scary for the first time! We are both at uni at the moment so we are rushing around to Uni, town, the estate agents, viewings etc a lot which as you can imagine isn't easy (but I am sure it will be worth it).

Really I started this thread just to tell my story, what I am doing at the moment, and I would love to hear about any other first time buyers, how they are feeling about the excitement and worry about it. Also advice from people who have been through the process is priceless. Do you have any tips, advice? Anything from decorating (Check the electrics before decorating!) to advice on what to offer on a repossessed house is good. Do we go as high as we are happy to before the public notice or do we try to see what we can get away with (but then do we run the risk of being gazumped?).

What do you think? How was your first buy? Did you stretch to the most you could afford or did you buy something which was comfortable with your salary? Do you regret that or was that good?

 

[NutterzUK]

Not even got this far yet mate. Plan to go for it next spring when have a bit of money . Paying a huge amount in rent so would be looking to drop that.

My advise to you is to really keep looking around for your mortgage, I was fairly shocked at how different the rates were. Going through Natwest we got 4% with no fees, going through an estate agent the best was 6.5% with £999 fees! Granted on a mostgage of only 54k it doesn't make too much difference on a month by month basis, but if someone came to you tomorrow and offered you £999 + some, you would be a happy man, so it's certainly worth keeping an eye out even if it is a bit of a pain to keep looking.

I doubt it, a £54k repayment mortgage at say 4% over 25 years works out at less than £300/month

This is correct, it's repaying over 25 years and is less than 300 a month for the 54k, I think it was around £280, which when compared to the £600 rent a month is a big reason for the whole thing.

 

[NutterzUK]

We were similar to maccapacca - borrowed £5k as a loan to push our savings to about £12k. At the time I was only earning £17k and my partner about £22k (2002). The house was £93k, we borrowed around £88k which was costing us £500 per month.

Mortgage companies were willing to lend us up to £150k, but we had our sensible heads on and didn't stretch ourselves.

We could afford the house fine but fell into the trap of spending loads on interior decorating and design which meant we struggled for a couple of years.

I guess the borrowing was from friends etc? I was of the understanding that you can't borrow to pay your deposit, if I could.. I have a post-graduate loan I can get from Natwest, but I'm fairly sure that's not allowed?

 

[NutterzUK]

Key points I noticed:
-Your partner will soon be working and thus have a hike in income
-The prospective property needs a lot of work
-Even after a lot of work, you can't add a massive amount of value because it's a 2-bed terrace and 3-bed semis in the same area are only an extra £20k
-You have a great relationship with your current landlord

If it was me, I'd wait until the partner has a job and then buy a 3 bed semi. The only spanner in the works as I see it is that you might need to rent for another year but given you have no issues with the landlord I would consider it. The key benefits of this approach in my mind are:

1) Assuming your partner gets a job later this year, you should have a larger deposit saved by June 2014, meaning you can afford a better property and/or get a better mortgage deal
2) I would recommend against buying a house so close to your partner finishing education and looking for a job because you are then tied down to some extent potentially limiting the job search area (or meaning she has an unpleasant commute). I'm no expert on genetics but I'd imagine it isn't the sort of field where every town has a huge list of propsective employers to choose from
3) You will get a better house at the end of it

Point #2 may seem a little strange but we made the mistake of buying a house while I was looking to move job and then a few months later a decent opportunity came up but sadly not the easiest to commute to. In the end we only stayed a couple of years before selling up and moving somewhere closer to my work. Obviously you shouldn't let work dictate where you live as the chances of staying in one place forever are pretty slim now, but it is best to start off on the right foot I feel (of course assuming all else equal in terms of the quality of the property etc).

This is actually very interesting, you have spotted the exact kind of thing we have been thinking about here. The issue with renting is that unfortunately we made a website for our landlords properties, and it did surprisingly well and so they are all rented out. We can go elsewhere but it would be getting to be a bit late now and we would have to probably take somewhere not very desirable, but that isn't the end of the world. Your #2 point is also very interesting about being tied to one location. That's very true, with me being at University for a further two years she is (kind of) tied to the area anyway. The property is just off a main road near the M1 (not too much traffic noise though ). You are right about Genetics not having lots of available jobs, she also has the decision of if she should go into that field or if she will do web development. She has two opportunities, actually both on the University campus within genetics. One was that she may be a lab technician but that is pending a grant application which has been made, the other is to work for the NHS as part of their cancer research, it just happens to be that the hospital is within the University (Queens Medical Center, Nottingham) and so with either of those she would be ok. There is a big BUT though, neither is guaranteed, she is currently waiting to hear about the NHS placement and would be waiting on a grant to work within the university. Web development can be done remotely or there are many companies within the area which she could apply for. She will get good grades, probably a 1st class but unfortunately she may not want to go in to academic science. If she stays at the University studying a PhD or going on to be a lecturer, the hours are horrendous and there are all sorts of problems (I know this sounds crazy, but 40 hours a week would be a minimum and leaving to have children would be a huge problem if she wanted to).

#3, we will get a better house at the end of it, that's very true and something worth thinking about. If we go that route, we don't need to move twice and we will be more comfortable. However we lose a years rent (which isn't too much in the grand scheme of things, but I suppose if it is £600 a month that is £7,200 a year minus interest on the mortgage which is about £200 a month and fees so around ~£4,500 which doesn't sound much but as a percentage of the house value is close to 10%.). We would have a large amount of our income tied into a nicer house though which would make it harder to find the money to do things such as holidays, spending money on the house, or anything else. There is a good possibility it's only for a few years, so we aren't sure how much we would settle in, if it was for longer then waiting would be the way to go, but at this stage there is some uncertainty there.

I think we need to know when we are looking and keep it in the back of our heads that we can rent, and it's better to rent than buy somewhere we are not certain about. So far there have only been two properties we have fallen in love with, one was taken off the market just after our offer and the other one is the repossessed one we have an offer in on at the moment. The houses near to us at the moment are a lot smaller and are around £110,000-£120,000, but are in a nicer area and closer to the University. If we saved for a year, it would be one of these that we aim for.

 

[NutterzUK]

I just spent a quarter mil on my first house, on my own.

.. you think you've got worries lol

Good luck! When is the move date?

 

[NutterzUK]

Bought my first place just over three months ago.
I'm currently having a break from stripping wallpaper to watch the rugby and football.

I'm in a slightly different position from the OP in that I live in one of the more expensive areas of the country (average price around here is > £400K) so it's taken 10 years of working and saving to be financially secure enough to get a decent place.
It's nice having somewhere to call my own - it still feels a little weird when doing the redecorating as I've not been able to do anything to the places when renting.

I bet it will feel weird at first but certainly you have to feel a sense of achievement!

I was wondering perhaps if someone can give me advise on one thing about buying a repossessed house. If we put in an offer than then it goes to the public notice, then after the public notice someone puts in a higher offer before we have exchanged contracts. Can we be sure that they will contact us to let us know our offer has been beaten and give us a chance to increase it before allowing the other person to exchange? Is it possible someone does that in one day and so we have no chance?

Thanks,

 

[NutterzUK]

Have you actually got an agreement in principle, in writing, from your lender?

Yes, we have one from Natwest, we needed it in writing to put an offer in on the property. It's not actually technically a "mortgage in principal" since they no longer actually do those. They have looked at my current balances, my deposit and my income and said that we can borrow the amount we need but we still need to apply for it. So we are waiting for our offer to be accepted first then we can go to the bank and get that moving on a little further, and call the solicitors.

 

[NutterzUK]

Moved into my first home just under a year ago, some advice for you if you go for it:

1) Women love pillows / cushions and other pointless things, you'll be dragged around buying ****.
2) Decorate one room at a time, finish one room and move onto the next. There's nothing worse that having every room half done and no rooms finished. Makes it seem like it's a bigger task than it is aswell.
3) If you need a new bathroom / kitchen do it before you move in. It took me 3 weeks to fit a new bathroom and we moved in the day after it was finished, it just made everything so much simpler without having to worry about people needing a shower.
4) Plan your budget then add 20% to cover any unexpected issues.

Other than that enjoy it, it's stressful but I can remember getting the keys to our house and sitting in the living room on the floor with no furniture just amazed that I own a house

I like this advice, that's handy. We added on 50% of what we think as we want to be on the really super safe side. I couldn't think of anything worse than running out of money and having problems paying for jobs that need doing. We would be lucky with the dates as we would be able to buy the house a couple of months before we need to move. The place has a bathroom which looks ok ( even though it's not exactly how we would like it ). One big problem we expect is that when the water, gas and electric get turned back on (it is a repo so it's turned off as it probably wasn't paid), then we don't know if the boiler and electrics work. We took into our estimations we may well need a new boiler, and maybe electric works (Certainly a new fusebox, as it's old).

We were thinking we would have a go doing most of the house before moving in, however this could result in what you describe, having no room complete. Hopefully by the time we move in we can have the bedroom and kitchen done (bathroom is ok), but we will certainly need to prioritise to make sure we can do that.

Women love cushions... haha, lucky for me she loves online shopping and has her own computer

 

[NutterzUK]

M
Other than that enjoy it, it's stressful but I can remember getting the keys to our house and sitting in the living room on the floor with no furniture just amazed that I own a house

I look forwards to this feeling some day!

 

[NutterzUK]

That a mistake a lot of people make.

I'll take this one on board. So now the question is.. which room first? I think the bedroom wants to be the first, if you can relax and go to sleep happily, everything is good in the world

What a day today has been! Our offer got accepted, so we've called the bank to book a meeting to apply and instructed our solicitors to start the searches.

How long should these things take? The public notice will start soon for the property as it is repossessed, the notice is 7 days. Ideally, we want to exchange as soon after that as possible. We did tell the bank and the solicitors exactly that but I would imagine it's going to take longer than 7 days.

 

[NutterzUK]

Go for the rooms that are the biggest pain in the backside, if the bathroom is ok, go for the kitchen next, then bedroom / living room.

Congratulations on the offer being accepted, one step closer!

I think we will probably end up doing *some* work on the bathroom but hopefully not much. Our very very first priority has to be to reconnect water, gas and electric. Once that it done, I think you are correct with the bathroom and it doesn't need much work. There are some pipes I would like to move and I have always really wanted a power shower but I think that will depend on a few things. The floor will want re doing.

The kitchen also isn't *too* bad, but it's not the best. Another thing I've wanted for years is a dishwasher.

I don't want to really go putting up links to the property, but here are a couple of pics of the bathroom and kitchen.

Annoyingly, the bath and shower are infront of the window, and the pipe to the shower actually comes out of the wall just under it and goes up the wall - you can't see this in the pic. They took the toilet roll holder and other things which were on the wall too.

 

[NutterzUK]

Wow, congrats though on building your first house, that is impressive, some day I would love to do that but of course i'm in no position to do that at the moment.

The last few days have been busy. We put in our offer, it was accepted, we went to Natwest on Wednesday and applied for the mortgage. We paid the solicitors on Wednesday and asked them to start searches. Today (Thursday), the valuation has happened but we don't yet know the result, and searches have begun (We had to fill in a huge number of forms). We are aiming for an exchange date of a week tomorrow having asked everyone to communicate via email rather than post where possible and making sure we give everyone everything they need.

We also have a plasterer booked to view on Saturday with us to try to get quotes on how much it will cost to re-plaster a lot of the house.

I'll let you know how it goes!

 

[NutterzUK]

We bought it and exchanged within 10 days of our offer being accepted! Wow it's been busy! We get the keys (complete) on the 28th, so not long to go now. We got it at £56,500, it sold in 2007 for £85,000 and was on a couple of months ago at £65,000 (By the bank as a repo), before they reduced to £55,000 but there was another person interested. I think if it was done up nicely it might fetch around £65,000 but it's a home rather than an investment (it's just good to know we shouldn't lose money on it).

The link has actually been removed from Zoopla and Rightmove now, but I do have an old archived link of when they tried to rent it (Jan). Here is the property:
http://www.zoopla.co.uk/property-history/47-bells-lane/nottingham/ng8-6ex/16142581

What do you think the first thing you would do would be?

 

[NutterzUK]

Hi, I'm on my phone so please excuse any typos in this post.

Both the gas and electricity are on key metres which works out well for us because we can use those until we finally move into the property when we will transfer our existing contract to it. With it being a repossession we don't really know what works and what doesn't. As they tried to rent it out we expect things should be ok but we don't want to assume. When we connect the electricity, I would expect the first thing that will happen will be the house alarm will go off. We have no reset key etc so that will be problem #1. Then, before we connect the gas I will check where the cooker was removed to make sure it was not a gas cooker or that it's been left open. Is there anything else I should be doing before connecting the gas and electricity?

I have the model of the alarm so I will search around to see if I can find a way to reset it, I'm not sure how much success I will have, what do people usually do?

Thanks,