First Time Buyer

MissRR

Hi, I was wondering if anyone could give me a little advice...

Me & Boyfriend are looking to buy a house after xmas, we are both young (20/21) so only have a annual salary of £12,500 ruffly... at the moment we are looking to get a morgage for £70-90K with a £6/8K deposit obviously with the market not being too great at the moment do you think we would get turned away, if not could you please maybe advise best type of mortgage, we are thinking of a Fixed rate but unsure of all the pro's/cons


Any advice would be appreciated

Thanks in advance ...

Rachel

~Beanie~

You will need a mortgage of at least 10% so for a 90K mortgage, you will need £9K - plus money for solicitors fees etc.

That would leave you wanting a mortgage for £81,000.

Do you have a salary of £12,500 each or between you? If each, that would be £25,000 combined which should be enough to get you a mortgage of £81K.

If the £12,500 is between you then you are going to have to save a lot more I'm afraid!

_Andy_

The bare minimum deposit you'll need is going to be 5% -if you can save 10% or more then you'll get lower interest rates.

Incisor

Whatever you do Rachel, avoid 'Shared ownership" and "No deposit" deals.

thejoose

Rachel,

It's only really possible to give professional advice if all of your circumstances are known by the individual giving advice.

Your first goal should be to secure yourself a minimum of 10% of the purchase price in the form of a deposit. Any smaller deposit and you can expect to pay what's called a Higher Lending Charge, and let me tell you, you seriously do not want that (even if you can add it to the loan).

I'm assuming that you meant that you are earning 12,500 each so 25,000 in total. If so then you may well be in a position to borrow in the region of £70-90k but it will depend on a number of factors so please bear in mind it will only be possible to tell with any real certainty once an adviser has completed a full fact find with you.

In terms of mortgage type it would be understandable that someone in your circumstances would elect to fix their rate in order to have certainty over monthly payments. The main adavantage being you will know that for the period of the fixed rate your payments will be the same every month and so you know where you stand. The downside is that you will probably pay a little bit more in order to have that security. That said, if rates were to rise significantly, you will be better off than those on variable rates. The downside, of course is that if rates were to fall significantly you will be paying the same monthly amount whilst those on variable rate products see their payments fall.

Keep firing any questions over as there are lots of people here who can share with you both their professional advice and their own experiences. I remember being very stressed and confused back when I took my first mortgage. If only I knew then what I know now!