First Time Buyer 100% Mortgage

Honeysuckle4278

Hi everyone! I have a bit of a dilemma which I need some advice on - I'll try to be brief!

Firstly a little bit of background...
I have been living in a rented flat for the last 4 years and do not have any savings. I got in a bit of a pickle with a big overdraft and credit card bill but I am getting in control of budgeting and my overdraft should be gone after next pay day and my credit card bill is £4500 but is now on a 0% interest card and I am hoping to have that all paid off within the next 9 months or so.

Anyway, the owner of the flat I'm in told me he's thinking of selling it in the next few months and he wants to know if I want to buy it. I was going to start thinking of investigating buying my own place later in the year but this has come out of the blue. So I need to find out if it's possible for me to actually get a mortgage now or not.

If I can get a mortgage I'll need a 100% one as I have no deposit saved - do banks still do these at all?

If I can't get a mortgage I think I'll move somewhere smaller and cheaper to allow me to save as much money as possible for a deposit for buying somewhere in the next year or so.

Any advice appreciated!

Wutang_2

If you can ask a parent nicely then there are a couple of 100% guarantor mortgages - other than that there are no ways to do this..

Its not the best mortgage in the world though and I would recommend saving up instead

happybroker

Love to be able to more positive but I can't think of a 100% deal out there at the moment. Bristol & West were the last ones really where you would have a parent or other close relative as a guarantor but they want a 5% deposit now I'm afraid.

Start saving now as your landlord may take quite some time to sell the flat and you may get a deposit saved before he sells to some one else.

Good Luck

Wutang_2

Bank of Ireland still do it - 3 year fixed 7.19% but not a good idea

Bargain_Rzl

Just because you've been offered the chance to buy your current home doesn't make it a good idea to do so.

Have you done the sums and worked out whether you might just be better off moving to another rented flat? It's cheaper in most areas to rent than to buy, and property prices are on their way down (you surely wouldn't want to be in negative equity straight away, even if somebody - i.e. a mortgage lender - was willing to let you?)

I really do understand the desire to remain in a home you've been in for a while, and to have the security of tenure afforded by ownership, but really, do you honestly think it's the best option?

oneandonlyboy

hi, also alot of lenders will take into account your debt and will work out whether you can afford it or not.

Best pay of your debt and start saving in a years time the market would of dropped more, giving you a better choice.

ziknik

Punch a mortgage quote into the BBC mortgage calculator. Use 7.19% as interest (suggested by Wutang).

How much extra will it cost you to stay in the same flat? Is it worth it?

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

Compare the interest only figure against your rent.

Griptool

Honeysuckle4278 wrote: »

Hi everyone! I have a bit of a dilemma which I need some advice on - I'll try to be brief!

Firstly a little bit of background...
I have been living in a rented flat for the last 4 years and do not have any savings. I got in a bit of a pickle with a big overdraft and credit card bill but I am getting in control of budgeting and my overdraft should be gone after next pay day and my credit card bill is £4500 but is now on a 0% interest card and I am hoping to have that all paid off within the next 9 months or so.

Anyway, the owner of the flat I'm in told me he's thinking of selling it in the next few months and he wants to know if I want to buy it. I was going to start thinking of investigating buying my own place later in the year but this has come out of the blue. So I need to find out if it's possible for me to actually get a mortgage now or not.

If I can get a mortgage I'll need a 100% one as I have no deposit saved - do banks still do these at all?

If I can't get a mortgage I think I'll move somewhere smaller and cheaper to allow me to save as much money as possible for a deposit for buying somewhere in the next year or so.

Any advice appreciated!

You've been able to repay your debts with careful budgeting so carry on being frugal and build up a nice deposit. Don't buy now, its the wrong time, you will be able to buy a flat/house for less money in a year or two (have a good read of the nationwide house price data to be released tomorrow?) it will tell you prices have been falling MoM since Nov07 and will continue to fall in the medium term.

Bear in mind if you were successful in getting a 100% loan you would be in negative equity within weeks.

My advice fwiw would be twofold
1 Save hard and be patient
2 Take any advice from a mortgage broker (the moneylenders attack dogs) with a large pinch of salt;).

lisyloo

Compare the interest only figure against your rent.

Also include building insurance, repairs and maintenance as these are normally included in rent.

There are more costs to owning a house than renting.

phlash

My gosh, I'm simply more amazed everyday at the financial risks people are willing to take!

A 100% leveraged purchase, in the current climate. Either you know something, or know very little. It's like putting your life savings on number 32 in roulette.

As much as others may be willing to 'do the polite thing' and say ways to make your proposed plan feasible, I'm not so prepared to do so (Am not implying this is the case in this thread, just has been in others). I do not think it's in the spirit of money saving expert. A money saving expert (imo) would not be thinking what you're contemplating.

The market is highly unstable, data just released shows a 64% reduction in mortgage approvals for May 2008 compared to May 2007. THIS IS HUGE NEWS AND IT'S FACT. It's not based on opinion, its cold raw data.

Buying a house is the biggest financial decision most people make in their lifetime, if you were to produce a GCSE graded piece of coursework on the 'current state of the housing market' you would be able to answer your own question competently and confidently.

May I suggest, a few hours research (started from a neutral standing) into the (probably) biggest financial decision of your life. Please.

All in the spirit of MSE.

The last thing I want to see is someone trying to get hold of a 100% mortgage for a flat in the Spring of 2008. It could knock you over for six for a decade.

minimike2

Wutang wrote: »

Bank of Ireland still do it - 3 year fixed 7.19% but not a good idea

I dont think they do...

Where have you got that information from?

BoI withdrew and relaunched everything last week, including removal of First Start.