Mortgage advice - first time buyer

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Delvis

Delvis

Delvis

Caporegime
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Buckinghamshire
Hi all,

So, me and the wife need to start thinking about purchasing a house, which brings up mortgages.

I haven't the foggiest about them, so obviously ANY advice here or help is appreciated.

Naturally I know the basics, a high deposit helps matters, not to have too much debt, but beyond that, not a clue.

I've started reading money saving expert but it'd be nice to have some really world advice. A friend has given me some contact details for a mortgage advisor, so I'll be contacting them soon.

In short, no idea, don't have a big deposit atm, I changed jobs just before Xmas,wife is self employed and doesnt earn a lot atm.

TL;Dr: need mortgage advice for a n00b

P.S: have a H2B ISA setup
 
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Mortgage brokers might be useful, more useful if you've got some circumstances that make things difficult with some providers - like being self employed etc.. If you're in a salaried position then you can just as easily make use of comparison sites.

Also, regardless of what the mortgage broker advises - check a comparison site too and check HSBC, at the time I was looking HSBC rates beat most other deals and didn't work with brokers.
 
Kind of depends on lots of stuff TBH!

Are both you and your misses going to be on the mortgage? What are your salaries (ballpark) and where are you looking to buy? Will you be getting any help from family/parents? What do you have saved already?
 
BongoHunter said:
Kind of depends on lots of stuff TBH!

Are both you and your misses going to be on the mortgage? What are your salaries (ballpark) and where are you looking to buy? Will you be getting any help from family/parents? What do you have saved already?
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Of course, loads of variables :) I guess I'm asking how people went about it, where to start etc

Hopefully both be on the mortgage, but we may need to do it just as me. I'm on 30k, she's below or not far above tax threshold. Buying in Buckinghamshire, near Milton Keynes/Buckingham/Bicester. Not sure on help, her parents will downsize and we may get something from the sale. Assume nothing is saved, think my H2B ISA only has 1k in it.
 
The main thing I think most people overlook is when your deal ends and u make a new deal, your property value will have changed so your loan-to-value will be different, so you can potentially get a better rate. For me, that meant when my 2 year deal ended, my new deal was about 300/month cheaper.
 
Delvis said:
Not sure on help, her parents will downsize and we may get something from the sale. Assume nothing is saved, think my H2B ISA only has 1k in it.
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You might need a bigger deposit!!!

Some developers offer a deposit contribution so that could help, though if you're waiting for some unspecified amount of money that may or may not be coming from a house sale then you're perhaps better off holding off taking to banks etc.. at the moment. Agreements in principle, mortgage offers etc.. are generally time limited to say 3 months or there about.
 
I was able to find a better deal in ten minutes than a mortgage advisor could find.

Things to consider.

Clean your bank account up, get rid of daft direct debits and make sure you're out of overdraft.

Look at early redemption costs.

They will want evidence of everything
 
Delvis said:
Of course, loads of variables :) I guess I'm asking how people went about it, where to start etc

Hopefully both be on the mortgage, but we may need to do it just as me. I'm on 30k, she's below or not far above tax threshold. Buying in Buckinghamshire, near Milton Keynes/Buckingham/Bicester. Not sure on help, her parents will downsize and we may get something from the sale. Assume nothing is saved, think my H2B ISA only has 1k in it.
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Ok, worth bearing in mind that most mortgages are around 4.5 to 5 times earnings of the aplicants - though differernt lenders have different rules though. So even if she only earns 10k then this will mean you can potentially borrow 45k more - which will make a big difference in the area you are looking to buy.

So if you pick a house that's 300k - and borrow the max (assuming you find a lender that can do 5 times earnings) you will need a deposit of:

300k - ((10k + 30k) * 5) = 100k

Obviously this is a gross simplification - but kind of gives a ballpark of the figures that matter the most
 
dowie said:
You might need a bigger deposit!!!

Some developers offer a deposit contribution so that could help, though if you're waiting for some unspecified amount of money that may or may not be coming from a house sale then you're perhaps better off holding off taking to banks etc.. at the moment. Agreements in principle, mortgage offers etc.. are generally time limited to say 3 months or there about.
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I know that :)

I have a new job, all extra money I earn from that is now going towards the deposit, so it should start shooting up a tad quicker now.
 
Maccapacca said:
I was able to find a better deal in ten minutes than a mortgage advisor could find.

Things to consider.

Clean your bank account up, get rid of daft direct debits and make sure you're out of overdraft.

Look at early redemption costs.

They will want evidence of everything
Click to expand...

Thanks for the reply.

Bank is never overdrawn for me as I get charged, wife however still has her student account and is pretty much always overdrawn (but not charged), yes I know that's ****.

Daft direct debits?

Yeah I've read about them wanting everything, so I'll make sure we do before properly looking.

BongoHunter said:
Ok, worth bearing in mind that most mortgages are around 4.5 to 5 times earnings of the aplicants - though differernt lenders have different rules though. So even if she only earns 10k then this will mean you can potentially borrow 45k more - which will make a big difference in the area you are looking to buy.

So if you pick a house that's 300k - and borrow the max (assuming you find a lender that can do 5 times earnings) you will need a deposit of:

300k - ((10k + 30k) * 5) = 100k

Obviously this is a gross simplification - but kind of gives a ballpark of the figures that matter the most
Click to expand...

So basically, not getting a house :D a garage perhaps haha
 
billysielu said:
The main thing I think most people overlook is when your deal ends and u make a new deal, your property value will have changed so your loan-to-value will be different, so you can potentially get a better rate. For me, that meant when my 2 year deal ended, my new deal was about 300/month cheaper.
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Or keep your payments the same, take advantage of the better LTV and thus interest rate and shorten the term.

That’s the approach I took, payments went up by £50~ but my term is almost 10 years shorter now than when I bought the house 3 years ago.
 
Also if you have any unused credit cards with zero balances then look at cancelling them and only keep 1 or 2. I'm looking to buy (first time) and had over £50k of available credit available. I was advised by my broker that lenders can be scared by this, so cancel the ones you don't need.
 
Before buying make sure that you dont stretch your budget to the absolute limit, make sure you have some spare cash every month in case the house needs maintenance.
For 90-95% LTV HSBC seems to provide one of the best rates and their online process is very simple. You can try making an application online just to get an agreement in principle, hsbc doesnt carry out a hard check on your credit history for this (or nationwide, these are the two I tried less than 6 months ago).
The only advantage of going with a mortgage broker is if you are self employed and they sometimes offer a cashback with their lenders but definitely not worth paying them for, as you can pretty much apply to most banks directly. If you are buying through an estate agent they might try and persuade you to use their advisors.
 
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