First Time Buyer in need of help and guidance!

lambc_uk

I am a first time buyer and am trying to decide on the best mortgage to get. I don't have enough money for a deposit and was thinking of getting a 100% mortgage. Can anyone please advise me on the suitability of these mortgages or advise me on the best way to get on the ladder in Suffolk! I have been renting for the past year and am getting very frustrated as I could be paying off my own mortgage and not somebody elses! One final question, I am earning £22K pa and expect this to rise to £25k next year, what rate of mortgage should I expect to be offered? I am a complete novice and want as much information about what I am getting myself in for! Do I stick with my bank or go with an independent mortgage advisor? aaaahhhh

Thank you in advance for your help and advice!

Doozergirl

Go with an Independent Mortgage Advisor. I think most on this board will tell you that a 100% mortgage is not a good idea at the moment. You are not likely to see much increase in value in the short term and, obviously, a 100% mortgage provides you with no cushion against any falls and you will be charged a higher rate of interest and higher arrangement fees.

I don't know Suffolk but I doubt that even if they lend you 4 times your salary, I doubt you will get much for your money.

Your money is worth much more saved hard towards a decent deposit.

Rave

lambc_uk wrote:

I have been renting for the past year and am getting very frustrated as I could be paying off my own mortgage and not somebody elses!

Rents in a lot of areas of the country are actually cheaper than the interest on the mortgage necessary to buy the property. You can either rent the house directly, or you can 'rent' some money from the bank to buy the house. Even if I could get a mortgage to buy the flat I currently rent, it would cost more in interest than I pay in rent. As a result, I'm actually better off renting. While the same may not be true for you, you're unikely to be losing out significantly while houses are so expensive.

My advice, as it is to every other potential FTBer in here, is to save up foir a deposit and wait for houses to get cheaper. Even if prices stagnate in absolute terms, inflation means that they will get cheaper in real terms. If you buy a house now with a 100% mortgage you leave yourself open to a very real risk of negative equity- and if you were to lose your job that could lead to bankruptcy. Is it really worth the risk?

illmonkey

some sound advice there Rave.

Im looking for a place to buy/rent, FTB would need close too 100% and i've decided to rent for at least 6 months to save a few £k's for a bigger deposit.

My only problem with that is i want a run down place to do up and call home. Oh well, it will have to wait!

AndrewSmith

Spot on advice there Rave.

You took the words right out of my mouth.

Inflation at the moment is at 2.5%, with the Bank of England target being 2.0%. They are due to announce the result of the latest rate change on the 10th November.

I have many contacts in the city and even the most astute Analysts are reluctant to make any kind of prediction.

There is talk of a pre-christmas rate rase to curb public spending and borrowing and keep inflation in check. (not my view, but the view of a few London Investment Bankers)

Regardless, house prices have now reached a plateau, and what others have said about the risks with 100% mortgages in the current climate is absolutely spot on.

Hope this helps

Andy

Rave

Thanks for the info Andy, good to know:).

tomstickland

I'm in a similar position and decided that saving as much as possible for a future deposit was the way to go, what with a lot of cheapish rental properties around.