First time buyer

speaktohughesy

Looking for some advice if possible. me and my partner are first time buyers with a £5000 deposit and the time have now come were we need a new place to live.

We earned around £22k a year and have found an apartment for £99k which seems perfect. I have only really looked in to mortgages this week and enquried at if.com and was pre-approved for an 89k mortagage (just short of what is needed)

Anyone got an advice on possible places to go and enquiry about mortgages etc? i know the main problem is the low deposit but i still feel that buying is the far better option then renting something if possible.

Thanks in advance

Adam

meanmachine_2

You can probably get more from the Alliance and Leceister/Northern Rock - depends on your other loan commitments.

But the question is whether you can afford to borrow more.

Never a great idea to go from one lender to the next, as each credit search affects your rating.

sarah_elton

Are either of you graduates? HSBC will lend more to graduates and seem to be pretty relaxed about how much they will lend in general. Their fixed rate is currently 4.99% - you can find cheaper but if you find what you need to borrow is slightly more than what other lenders will do, they should certainly be cheaper than Northern Rock (who will lend to virtually anyone but tend to have high rates). Have a look on their website where you can put in income, and it'll say how much you can borrow - gives the same answers as asking in branch. (https://www.hsbc.co.uk) You can also on there do the repayment calculation to see how much it will be and then you can decide if its affordable.

meanmachine is right about the credit checks - but HSBC for instance only do that at point of formal application, not the initial discussion and mortgage in principal which says how much you can borrow. When you speak to a bank, check what they're doing, ask them to say what you can borrow without going through formal checks.

happyhunter

If you decide to go with HSBC, try to haggle to avoid the product fee (£395??). My sister had a quote from them, then told them A & L 's fixed rate is better and would save more compared to HSBC. The financial planning manager then dropped the product fee to £200.... a few days later my sister still insisted A & L would save her more and guess what, they reduced it down to £100 ... few more days later... no arrangement fee!!!

Thefunkygibbons

Are you likely to see increasing income over the next few years?

If so, make sure that you can make capital repayments, this will help you build up equity that then will help when you get the second place

Be careful before agreement to payment protection policies, read Martin's advice on the board