Soldato
I'd be interested to know what ways around it you think there are because as far as I'm concerned it's cut and dry.
Mortgage advice - first time buyer
- Thread starter Delvis
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Sometimes you can negotiate to pay for the white goods/furnishings seperately.
So you'd do the 250k mortgage, then pay a lump some of 7k for example if the house was sold for 257k, that way you'd still get the gov bonus. This obviously depends on who you have the mortgage with...also probably not always likely to happen .
Soldato
As a first time buyer you're unlikely to be buying a house with enough contents that it makes a significant difference to the price by doing that. Plus it would mean needing a larger deposit as you'd be paying for the contents from your own cash. So pretty much irrelevant in the circumstances.
If you have debts pay off in this priority order ASAP
Credit Cards
Loans
Student Loans
Obviously getting a mortgage while you have debt is harder but some debts are riskier then others especially when the application gets put through stress testing.
For your wife, 2-3 years books or self assessment tax returns. Its daunting when one or both of you is self employed but don't let it be, as along as your have your paperwork in order it makes things easier.
Using a mortgage broker can smooth out the process.
Look in to the help to buy schemes, lots of new builds around, some stock being hard to shift, you might benefit from Brexit and a slowdown in the market with New Build Developers struggling to shift stock.
Happy to chat any time.
Credit Cards
Loans
Student Loans
Obviously getting a mortgage while you have debt is harder but some debts are riskier then others especially when the application gets put through stress testing.
For your wife, 2-3 years books or self assessment tax returns. Its daunting when one or both of you is self employed but don't let it be, as along as your have your paperwork in order it makes things easier.
Using a mortgage broker can smooth out the process.
Look in to the help to buy schemes, lots of new builds around, some stock being hard to shift, you might benefit from Brexit and a slowdown in the market with New Build Developers struggling to shift stock.
Happy to chat any time.
Just some thoughts from reading all the replies. You've mentioned your combined earnings are about 42k (30/12), sticking these into a mortgage calculator gives you a figure of around 200k.
Minimum deposit is 5%, and as you seem to already be aware, the bigger your deposit the lower the LTV and the lesser the monthly payments are.
On a 200k property with a 10k deposit (5%) would require a mortgage of 190k and give you monthly payments of around £800-880/mth (based on a 30 yr term)
On a 200k property with a 20k deposit (10%) would require a mortgage of 180k and give you monthly payments of around £720-760/mth (based on a 30 yr term)
On a 200k property with a 40k deposit (20%) would require a mortgage of 160k and give you monthly payments of around £580-600/mth (based on a 30 yr term)
The above gives you an example of monthly payments based on the different LTV rates.
Have you had a look around the areas you wish to buy to see what you can afford? This will at least give you an idea of how much of a deposit you need to save.
As for saving for the deposit, you mentioned a HTB ISA, but with 1k in it? is this actually the HTB ISA, or a HTB LISA? It sounds more like the latter? The HTB ISA which was available 2 and a bit years ago allowed you to open the account with a 1k deposit to gain a £250 bonus.
Anyway from what i've read, you mentioned your current deposit savings are practically zero. You mentioned you and your wife also have some debt - Credit card for you, and overdraft for your wife? (When does your wifes free overdraft end? iirc from graduate accounts you normally get a year or 2 before they start applying interest). Either way a mortgage advisor/broker would tell you to clear those debts, as they will eat away at the total a lender will give you - there's a section called monthly commitments and this will include anything like student loan repayments, and any credit commitments, and this can reduce things quite drastically.
I had the mishap last year of running into this, i purchased my missus engagement ring on credit (i had the money in my account to pay instantly, but wanted the credit card protection). Anyway shortly after we found a house we liked and went through the process of putting in a bid, went to get an AIP, and the total amount they'd lend us came out something ridiculous like 30k under what it was with 0 debt. (the ring wasn't 30k!
). Thankfully they hadn't yet taken payment of the ring, so i was able to change the payment and clear the debt from my account.
Without rambling on too much, based on the details you've given so far, unless you've got a family member gifting you a substantial deposit (10k+), then i suspect you'll be spending at least the next 12 months clearing your existing debts, and putting savings aside for a deposit. Personally i think you'd be better switching to a HTB LISA (1k bonus for every 4k saved), so have a read up on those and see if it makes more sense switching. Someone earlier mentioned about the Governments HTB schemes, i think this works by you providing some money as a deposit, and then the government also providing some money as a deposit (as a loan) - say 10k/10k each. The loan value increases/decreases depending on whether the value of the house increases/decreases. So if it increases 10% then you'd now owe 11k on the deposit loan. From memory these are typically 5 year loans as well, so you'd need to ensure you can not only pay your monthly payments, but also save up enough to pay off the governments loan at the end. There was a thread on here a couple of months back with someone in this sort of situation where he'd been paying back the monthly mortgage amount, but wasn't putting enough aside to pay back the loan at the end. I think these schemes can be a little irresponsible as it can open doors to houses (no pun intended) for people that wouldn't necessarily be able to afford it under normal circumstances.
Final point, i think someone's already linked you to the mortgage guide that Martin Lewis has published, that covers pretty much everything you need to know about mortgages.
Minimum deposit is 5%, and as you seem to already be aware, the bigger your deposit the lower the LTV and the lesser the monthly payments are.
On a 200k property with a 10k deposit (5%) would require a mortgage of 190k and give you monthly payments of around £800-880/mth (based on a 30 yr term)
On a 200k property with a 20k deposit (10%) would require a mortgage of 180k and give you monthly payments of around £720-760/mth (based on a 30 yr term)
On a 200k property with a 40k deposit (20%) would require a mortgage of 160k and give you monthly payments of around £580-600/mth (based on a 30 yr term)
The above gives you an example of monthly payments based on the different LTV rates.
Have you had a look around the areas you wish to buy to see what you can afford? This will at least give you an idea of how much of a deposit you need to save.
As for saving for the deposit, you mentioned a HTB ISA, but with 1k in it? is this actually the HTB ISA, or a HTB LISA? It sounds more like the latter? The HTB ISA which was available 2 and a bit years ago allowed you to open the account with a 1k deposit to gain a £250 bonus.
Anyway from what i've read, you mentioned your current deposit savings are practically zero. You mentioned you and your wife also have some debt - Credit card for you, and overdraft for your wife? (When does your wifes free overdraft end? iirc from graduate accounts you normally get a year or 2 before they start applying interest). Either way a mortgage advisor/broker would tell you to clear those debts, as they will eat away at the total a lender will give you - there's a section called monthly commitments and this will include anything like student loan repayments, and any credit commitments, and this can reduce things quite drastically.
I had the mishap last year of running into this, i purchased my missus engagement ring on credit (i had the money in my account to pay instantly, but wanted the credit card protection). Anyway shortly after we found a house we liked and went through the process of putting in a bid, went to get an AIP, and the total amount they'd lend us came out something ridiculous like 30k under what it was with 0 debt. (the ring wasn't 30k!
). Thankfully they hadn't yet taken payment of the ring, so i was able to change the payment and clear the debt from my account.Without rambling on too much, based on the details you've given so far, unless you've got a family member gifting you a substantial deposit (10k+), then i suspect you'll be spending at least the next 12 months clearing your existing debts, and putting savings aside for a deposit. Personally i think you'd be better switching to a HTB LISA (1k bonus for every 4k saved), so have a read up on those and see if it makes more sense switching. Someone earlier mentioned about the Governments HTB schemes, i think this works by you providing some money as a deposit, and then the government also providing some money as a deposit (as a loan) - say 10k/10k each. The loan value increases/decreases depending on whether the value of the house increases/decreases. So if it increases 10% then you'd now owe 11k on the deposit loan. From memory these are typically 5 year loans as well, so you'd need to ensure you can not only pay your monthly payments, but also save up enough to pay off the governments loan at the end. There was a thread on here a couple of months back with someone in this sort of situation where he'd been paying back the monthly mortgage amount, but wasn't putting enough aside to pay back the loan at the end. I think these schemes can be a little irresponsible as it can open doors to houses (no pun intended) for people that wouldn't necessarily be able to afford it under normal circumstances.
Final point, i think someone's already linked you to the mortgage guide that Martin Lewis has published, that covers pretty much everything you need to know about mortgages.
Caporegime
- Joined
- 21 Jun 2006
- Posts
- 38,367
what is wrong with new builds? they usually come with the latest and greatest of everything. the only issue i can see is if you can't afford a decent one so you end up with a crap one. or the relatively small gardens and driveways but that isn't a huge deal tbh.
wiring will be up to the latest standard. insulation up to the latest standard. boiler and everything else will be latest and energy efficient, etc. same with a lot of the appliances (dishwasher, oven, etc).
my advice to OP is nationwide are a really good lender that also offers cashback, etc at times.
also you need to find out your LTV and if it's close to a band then increase it to meet the next band. e.g. on a 200K house lets say you have a 19K deposit. which is 1K less than 10% so you fall into the 5% LTV bracket which isn't that good. by having that extra £1K you would fall into the 10% bracket and have a much better interest rate as a result. so you need to do your own figures and see what works for you. it's always best to have a multiple of 5% as your deposit. so 5%, 10%, 15% 20%, 25%, etc. if you have 13% then try and get that extra 2% if you can if you have 11% then obviously that extra 4% will be hard to get/save at short notice.
have you found a place or area you are interested in? make sure you view as many homes as you can including ones you don't like that much to cross off things you definitely don't want. view homes in the price bracket lower and higher so you can see the difference in what you get for your money.
i initially was looking at spending as little as possible on my first home. i then upgraded to next bracket and then the bracket after that after i saw them. so i went from a 2-3 bed flat to looking at small 3 bed detached to large 3 bed detached with large driveway and attached garage, etc.
i was looking for around 2 years before i bought. i'm glad i spent all that time researching and i ended up making the best choice. the home i have now could do me for life or the next 10 years. whereas before they would have been stop gaps.
pictures can be deceiving and i even looked at semi-detached to rule them out. the bedrooms were far too small. i looked at old houses and ones less than 20 years old. i wouldn't cross off a new build but generally speaking IMO it depends on the area. I know in my area new builds are overpriced. in an area 5 mins away they are a good price and will 100% go up in value with time. in my area they won't due to them being overpriced in the first place.
wiring will be up to the latest standard. insulation up to the latest standard. boiler and everything else will be latest and energy efficient, etc. same with a lot of the appliances (dishwasher, oven, etc).
my advice to OP is nationwide are a really good lender that also offers cashback, etc at times.
also you need to find out your LTV and if it's close to a band then increase it to meet the next band. e.g. on a 200K house lets say you have a 19K deposit. which is 1K less than 10% so you fall into the 5% LTV bracket which isn't that good. by having that extra £1K you would fall into the 10% bracket and have a much better interest rate as a result. so you need to do your own figures and see what works for you. it's always best to have a multiple of 5% as your deposit. so 5%, 10%, 15% 20%, 25%, etc. if you have 13% then try and get that extra 2% if you can if you have 11% then obviously that extra 4% will be hard to get/save at short notice.
have you found a place or area you are interested in? make sure you view as many homes as you can including ones you don't like that much to cross off things you definitely don't want. view homes in the price bracket lower and higher so you can see the difference in what you get for your money.
i initially was looking at spending as little as possible on my first home. i then upgraded to next bracket and then the bracket after that after i saw them. so i went from a 2-3 bed flat to looking at small 3 bed detached to large 3 bed detached with large driveway and attached garage, etc.
i was looking for around 2 years before i bought. i'm glad i spent all that time researching and i ended up making the best choice. the home i have now could do me for life or the next 10 years. whereas before they would have been stop gaps.
pictures can be deceiving and i even looked at semi-detached to rule them out. the bedrooms were far too small. i looked at old houses and ones less than 20 years old. i wouldn't cross off a new build but generally speaking IMO it depends on the area. I know in my area new builds are overpriced. in an area 5 mins away they are a good price and will 100% go up in value with time. in my area they won't due to them being overpriced in the first place.
Did it all online via nationwide. Had to drop in proofs at a branch but doing it all online by myself was a breeze. Intact Buying my flat was very easy and stress free. I’ve rcerntly remortgaged and that was super easy well.
I was a FTB, with no chain which made it easy I suppose. However, don’t assume it’ll be a headache/difficult!
I was a FTB, with no chain which made it easy I suppose. However, don’t assume it’ll be a headache/difficult!
Soldato
I would also recomend first direct, we got AIP online (was easy) and did the rest over the phone. We got a great deal and five year fixed term and can make unlimited over payments with no penalty. They beat almost every other provider on the rate by a bit as well which was handy
Soldato
Getting on the electoral role is good for your credit score.
Other than standard advice paying off your credit cards etc (make sure all minimum payments are met even if it's 0%).
Looks like you have a long way to go if youve got very little in savings (a couple years for deposit?) , but good luck!
Other than standard advice paying off your credit cards etc (make sure all minimum payments are met even if it's 0%).
Looks like you have a long way to go if youve got very little in savings (a couple years for deposit?) , but good luck!
Also Lloyds bank today launched a 100% £0 deposit mortgage, fixed for 3 years at 2.99%.
It requires family to put up a 10% deposit that is locked in a savings account for the same period, but it does pay 2.5% interest.
Actually a very attractive offering if you have family who can help. It is also low risk to them.
It requires family to put up a 10% deposit that is locked in a savings account for the same period, but it does pay 2.5% interest.
Actually a very attractive offering if you have family who can help. It is also low risk to them.
Hiya
Cool, I was intending on clearing the credit card asap, it's not massive (sub 2k), just I've not been in a position to clear it yet.
Wife has her books, so that should be sufficient if hope.
As said, have a H2B ISA, was a virgin one setup through MSE.com, just again not been in a position to plow money into it
And thank you for the reply and offer
Just some thoughts from reading all the replies. You've mentioned your combined earnings are about 42k (30/12), sticking these into a mortgage calculator gives you a figure of around 200k.
Minimum deposit is 5%, and as you seem to already be aware, the bigger your deposit the lower the LTV and the lesser the monthly payments are.
On a 200k property with a 10k deposit (5%) would require a mortgage of 190k and give you monthly payments of around £800-880/mth (based on a 30 yr term)
On a 200k property with a 20k deposit (10%) would require a mortgage of 180k and give you monthly payments of around £720-760/mth (based on a 30 yr term)
On a 200k property with a 40k deposit (20%) would require a mortgage of 160k and give you monthly payments of around £580-600/mth (based on a 30 yr term)
The above gives you an example of monthly payments based on the different LTV rates.
Have you had a look around the areas you wish to buy to see what you can afford? This will at least give you an idea of how much of a deposit you need to save.
As for saving for the deposit, you mentioned a HTB ISA, but with 1k in it? is this actually the HTB ISA, or a HTB LISA? It sounds more like the latter? The HTB ISA which was available 2 and a bit years ago allowed you to open the account with a 1k deposit to gain a £250 bonus.
Anyway from what i've read, you mentioned your current deposit savings are practically zero. You mentioned you and your wife also have some debt - Credit card for you, and overdraft for your wife? (When does your wifes free overdraft end? iirc from graduate accounts you normally get a year or 2 before they start applying interest). Either way a mortgage advisor/broker would tell you to clear those debts, as they will eat away at the total a lender will give you - there's a section called monthly commitments and this will include anything like student loan repayments, and any credit commitments, and this can reduce things quite drastically.
I had the mishap last year of running into this, i purchased my missus engagement ring on credit (i had the money in my account to pay instantly, but wanted the credit card protection). Anyway shortly after we found a house we liked and went through the process of putting in a bid, went to get an AIP, and the total amount they'd lend us came out something ridiculous like 30k under what it was with 0 debt. (the ring wasn't 30k!
Without rambling on too much, based on the details you've given so far, unless you've got a family member gifting you a substantial deposit (10k+), then i suspect you'll be spending at least the next 12 months clearing your existing debts, and putting savings aside for a deposit. Personally i think you'd be better switching to a HTB LISA (1k bonus for every 4k saved), so have a read up on those and see if it makes more sense switching. Someone earlier mentioned about the Governments HTB schemes, i think this works by you providing some money as a deposit, and then the government also providing some money as a deposit (as a loan) - say 10k/10k each. The loan value increases/decreases depending on whether the value of the house increases/decreases. So if it increases 10% then you'd now owe 11k on the deposit loan. From memory these are typically 5 year loans as well, so you'd need to ensure you can not only pay your monthly payments, but also save up enough to pay off the governments loan at the end. There was a thread on here a couple of months back with someone in this sort of situation where he'd been paying back the monthly mortgage amount, but wasn't putting enough aside to pay back the loan at the end. I think these schemes can be a little irresponsible as it can open doors to houses (no pun intended) for people that wouldn't necessarily be able to afford it under normal circumstances.
Final point, i think someone's already linked you to the mortgage guide that Martin Lewis has published, that covers pretty much everything you need to know about mortgages.
Thanks
haha, nice long replyYep, it's a help to buy ISA, I've only been able to put the minimum in over the last year, hence why it's not gone up a lot
Going by what you're saying, we can't get much unless we get a significant fund from somewhere, pretty much everyone we knoe only managed to get their houses and deposits due to a grandparent t passing away basically....
As for prices, they'll be around 240k more than likely, we may need to move further out into let nice areas annoyingly, or do shared ownership :/
Cheers
Yeah we want to stay local to where we are now, mainly because our works are here.
Appreciate the advice, I need to view all this on my computer as replying properly is a pain on my phone!
Good to know and appreciate the response
Cool,shall look into them as well
Sadly I don't think we have a couple of years, so will no doubt have to rent.
Great eh? Yet some people are able to get houses given to them because they're jobless and up the duff
Aye sounds good, just no one is available to give that kind of money sadly
Unless more business comes in, no.
New business, well, been going for a couple of years but she's been self employed doing other work for about 4/5 now I believe.
I have suggest trying to find at least a three day a week job, to get some extra, but most of those dont pay much sadly
Soldato
Are you currently at parents/in laws and rent free? Just try save as much as possible/earn as much as possible.
I don't think others living in naff council housing is something either to aspire to or relevant
. Bit of a daily mail comment
Are you currently at parents/in laws and rent free? Just try save as much as possible/earn as much as possible.
I don't think others living in naff council housing is something either to aspire to or relevant
. Bit of a daily mail comment
Yeah, just the rage kicking in
At the in-laws, not rent free but cheaper than renting properly
Any family member willing / able to take out a loan and put the funds in said savings account? You could have an agreement where you cover the interest portion of any loan they get so that they benefit and you guys still get a big boost to getting on the property ladder?
Thanks
Yep, it's a help to buy ISA, I've only been able to put the minimum in over the last year, hence why it's not gone up a lot
Make sure you check out the LISA, you've not got a great deal in the HTB ISA for the bonus to be worthwhile. If you're going to be saving for the next 12+ months, then you can get a 2k bonus from depositing 8k. Depending on how much you can both save each month, you can open one each and double the bonus - again assuming neither of you have owned a property before.
Yeah i don't want to put a downer on it
, but first thing is being realistic about what's affordable to you both - have a read of some of the horror stories in this sub-forum, or even over on MSE where people find they have unaffordable mortgages. If you're looking at 240k, then that's quite a bit of a deposit you'll both need to save.
Caporegime
- Joined
- 21 Jun 2006
- Posts
- 38,367
regardless of how much they pay - more money is more money.
when i was saving for a deposit. i worked a second job where they pay ranged from minimum wage to £15 an hour depending on the role assigned. also shifts could be as little as 3 hours to as much as 12 hours.
with it being a second job it was all taxed with no deductions as my main job got all those. so sometimes you were walking away with peanuts.
your combined income is around the 45K mark i believe so that means you can get a mortgage for around 180K which means you need a deposit of around 80K if you are looking to buy a place worth 240K. because 20K of that deposit will be eaten up by solicitors fees, stamp duty, furniture, other costs, etc. remember you will have to fully furnish the place which means beds, dining tables, tv's, couches, coffee tables, washing machines, etc. all of this stuff costs money then add in stuff like cooking appliances, kettles, irons, carpets and anything which needs doing.
also how are you planning on splitting the bills with you earning more than double your partner? what happens if it doesn't work out? have you looked at how expensive council tax is on a £240K property?
the reality is you are going to be paying more to enjoy the same stuff so she is essentially getting a lot more for her money. this isn't an issue for high earners but at the lower end it can cause friction. especially since her wage is below minimum wage full time employment.
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