First time buyers

I'm so near completion on my new house I can taste it now, which is damn near awesome!!! Can't wait to move soon!

Anyway, when buying a house you are looking at two major factors:

Deposit & Income.

Deposit will determine the rates you are going to get. At the moment, 10% seems the lowest so 10k for a 100k house. This however, won't give you good rates which effectivley determine how much you have to pay back overall to the bank every month. The rates get better as you put down 20%,30%, 50%,etc.

Essentially it means you are putting down more on the house, requesting less help from the bank by borrowing smaller amounts of money and therefore get better deals as it's a "safer bet" for the bank.

Your income essentially determines your affordability and if the bank think that you can ever pay them back. For example, you might want £1,000,000 home and have a 10% deposit of 100k. However, you have a combined salary of 30k P.A. The bank will work out that there is no way on gods earth you are going to be able to pay them back in your lifetime for that house.

They say that mortgage payments (to be comfortable in life) should be around 1/3 of your total monthly income give or take. The rest being for life and enjoying yourself. Therefore it's safe to say that the bank will lend you ~3 times your joint income towards buying a house.

Just my two cents on a very broad and indepth topic!

Good luck!
 
FishThrower said:
I think he means that HSBC post some great adverts with great rates.. then you read the small print... and you need to have 60% LTV (40% deposit) which about 1% of the population can actually afford.
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Almost. They were quoting a two year fixed 2.49% rate a few months ago and it was the big headliner on all their advertising. The fact was this rate was only available if you put a set amount down and the property was value was £325K. Everybody else got 4.2% but you weren't told about that. I can't remember the exact figure but it was close to that and it was one I applied for. I think that's pretty sneaky.

Halifax were advertising low 4% which you saw when you got an AIP but when you applied it amazingly went up and their charges were ridiculous at £1899.
 
richard1032 said:
Ill second this but with the scheme im on I don't pay any rent on the 30% share not owned to me I simply give back 30% of the profit when i sell or buy out the 30% at a later date in 1 lump sum.
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You lucky *******! :D Have you got the option to buy that off them then?
 
Rotty said:
think you need kids to get working tax credits
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AdviceGuide.org.uk said:
You can get Working Tax Credit if you or your partner are working enough hours a week and your income is low enough. You don't need to have children to qualify. It doesn't matter whether you are working for someone- else or self-employed.
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jamief said:
Maybe it differs in England, but in Scotland the first point would be addressed by a Surveyor and the second point by your Solicitor.
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he's correct, don't take an architect around ffs and besides, the building will be surveyed by the mortgage leander aswell but on first impressions, look for the obvious; damp or dry rot (check the timbers in the cellar if it has one) floor levels or any sign of subsidance, any cracks in the walls internal or external, services installations (pipes and wires - do they look proffessionally installed?) etc

if you do go for a flat, find out how much lease is left on it. you'll need a minimum of 99 years to get a mortgage loan, if iit's any less,., you will have to pay the fee to put it to 99 yrs and it can be expensive
 
Speak to a Mortgage advisor, preferably an independent one and not one from your high street bank. An indy should look at the whole market and find you the best deal but don't leave it all up to them as there are some deals which you can only get direct, so look yourself.

If you want security go for a fix but pay a higher rate but if you want relatively cheap mortgage for the time being then go for the variable but if you can only just afford a variable now, you will be struggling if the rates were to rise.

There are government scheme like the key worker deal that help you get on the ladder.

As others have mentioned, a deal might seem cheap until you look at the fees, so you will have to do your maths which is why an advisor helps.
 
Myself and the wife are buying a new house 'off plan' at the moment - this will be our 'second home' in that the one we're living in right now was our first-time buy and we're part-ex'ing with the developer to trade up.

Times are easing, for us it's more complicated as when we secured our mortgage we got a 10-year fixed rate with break-out after 5 - we're not quite there yet, but it's easier to port our current mortgage than to breakout for the time being. but it was fairly easy for us to get the 85% mortgage that we needed to trade-up.

The best advice I can offer is go and see an indy financial advisor, we didn't get charged by ours as he was working on a commission basis. That said it saved us quite a bit and after some discussion we realised that we could get a larger mortgage than we originally thought.
Ok this was 24 months ago when the market was very strong, but we got the house for a knock-down price, so it's all balanced out.


Depening on what you go for, don't overlook Stamp Duty - currently 1% of the price over £175k, also you're probably aware of the living costs, so don't forget to factor these in. Insurances could be slightly different - buildings and contents / life /ill-health etc. Also legal fees- our purchase will probably cost about £700 or thereabouts with out sale costing about the same, shop around, some will charge over the odds just because they can!

All homes in England now fall under a HIP (Home Information Pack) This should include some searches and a lot of information about the house you're trying to purchase, including an energy rating. I think it also includes a surveyors report (we had one visit us as part of the report creation on the house that we're selling).

Be prepared for a mountain of paperwork!
That's all I can think of for now - so good luck!
 
in the process of buying my first home now, I have a 35000 deposit and got a mortgage for £75,000 with Nationwide - Variable rate fixed for 2 years, its going to cost me £360 a month. There's also the buildings and contents insurance which is about £30.

I have been using the mortgage advisor in a local estate agents, it's worth talking to them, they've so far arranged everything I need, solicitors, insurances etc.
 
DirtyRaver said:
in the process of buying my first home now, I have a 35000 deposit and got a mortgage for £75,000 with Nationwide - Variable rate fixed for 2 years, its going to cost me £360 a month. There's also the buildings and contents insurance which is about £30.

I have been using the mortgage advisor in a local estate agents, it's worth talking to them, they've so far arranged everything I need, solicitors, insurances etc.
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Advice, ditch the insurance via the mortgage provider, £30/month is a joke (and is exactly what my lender quoted).

Not sure what you mean by variable fixed for 2 years? :D
 
Yup check out www.moneysupermarket.com or www.gocompare.com to see the best deal for home and contents insurance. Also DirtyRaven, considering you have such a high deposit it looks as if your rate is very bad!

Edit: ah the Mortgage is for 75k not the property value, still not the cheapest unless your fee free..
 
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A point raised in the OP. You mentioned a flat. This will be leasehold in 99.9% of the cases, and if it is freehold, it will normally be leased from a management company that you (and other occupants) own.

For a relatively low value purchase, I would not suggest seeing an IFA. Infact, given that good IFAs are fee based, I'd be surprised if one wanted to see you at a price you'd find acceptable for a house purchase.
 
Thanks for the tips people, I think iam goin to have roughly 10k deposit and for fees, so probably around 8k for a deposit as I can hopefully borrow a few gran off my parents.

Will probably be a flat of some sort my max will probably be around 70k ish.

Will try and see if I can get any help from the council/goverment.
 
jamief said:
Oh do shut up.
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You have no idea, this QE is creating another bubble, in the housing market you can call it an institutional bubble. While 1000s of people are losing there jobs others are rushing back in buying properties while others are all max out on debt, you'll see another one worse than what we have seen since aug 2007.
 
leicrao1 said:
there is a quick questionnaire to find out if you qualify on the direct.gov website

http://www.hmrc.gov.uk/taxcredits/start/who-qualifies/overview/quick-questionnaire.htm

takes two minutes

kids, disability and being over 50 make tax credits more generous but you can get them on very low incomes without any of these
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Last question is...

'Was your total income more than £13,100 between 6 April 2008 and 5 April 2009?'

Is this after you take away tax from your income?
 
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