1st time buyers, 100% mortgage or not?

Would appreciate some advice. (well, any advice actually!) :-/

Firstly, can anyone recommend a good IFA and/or mortgage advisor in the Leeds area who will offer free advice and consultation?

Secondly, here’s why I need the above! Any advice welcome:

I earn £24k, my partner earns £20k. I repay £260 a month in loans (graduate and student) and my partner repays £150 a month.

We are both graduates in good, secure jobs……and we’re fed up with renting! We’re very careful with our money (hey, I wouldn’t be on this site if we weren’t ::) ) and we certainly don’t lead a frivolous lifestyle…..if only!

But here’s the problem….we have NO SAVINGS, thus no deposit, money for fees, furniture etc. (And no nice relatives likely to offer a hand-out!)

By next July (which is when our tenancy runs out) we would’ve liked to have bought somewhere. By that time we think we can save £3k.

So, we guess we’d be looking at 100% mortgage? We are used to paying out £650 a month in rent so we think we could meet repayments ok. (We have just got a bargain house for rental which is why we can afford to save £3k by next year)

What’s our best way forward? Should we continue renting and try and save more money – ie enough money for a deposit. Or should we bite the bullet and try and buy somewhere next summer…..and is there a mortgage that would suit us?

A few people have told me I should get an interest only mortgage for a couple of years and then I can afford to buy furniture etc. I’m not sure about this.

Now you can see why I’m asking if anyone knows a good IFA!!! :o

Thanks,
Chop
:)

Replies

  • Robert_Sterling_3Robert_Sterling_3 Forumite
    7.1K Posts
    ✭✭✭✭
    Firstly, can anyone recommend a good IFA and/or mortgage advisor in the Leeds area who will offer free advice and consultation?

    Why not use a free surveyor, a free solicitor and an interest free loan too? ;)

    More sympathetic replies will follow I am sure.

    With love from "Simon Callow".
    ...............................I have put my clock back....... Kcolc ym
  • EMcGEMcG Forumite
    158 Posts
    Part of the Furniture Combo Breaker
    Dear Chop,

    I was in a similar situation to you in Feb.2002.  I found HSBC very helpful - they give special deals to graduates up to 5 years after graduation.

    This enabled to the wife and I to get a 100% mortgage.  They also have a Homestart Mortgage which means you pay interest only for the first 3 years - which helps at a time when money is usually tight.

    It can't hurt to give HSBC a call and see what they'd offer you.

    Good luck and let us know how you get on.

    Hope this helps.
  • ChopChop Forumite
    50 Posts

    Why not use a free surveyor, a free solicitor and an interest free loan too? ;)

    More sympathetic replies will follow I am sure.

    With love from "Simon Callow".

    ::) Yeah, thanks for that. I'm not adverse to paying for services.....just not for advice..... ;D
  • Hi Chop

    My girlfriend and I were in a similar situation to you 2 years ago, we basically had nothing in savings and lots owing in loans/credit cards.

    We went to see a financial adviser (sorry not in Leeds) and explained our situation, we wanted a flat but had no deposit and wanted to borrow more to clear our debts. He recommended a mortgage from Northern Rock called 'Together' which basically allowed us to borrow 115%, our joint income allowed us to borrow £71500 for the flat we wanted plus £12000 to clears our debts, pay the solicitors fees, surveys, and £2000 left over to buy essential furniture.

    On the day we picked the keys up for our flat we had not spent 1 penny from our pockets, ok we immediately owed £83500 for a £71500 flat but we recently remortgaged and the flat is now £115000 so we have £31500 equity, not bad for what basically equates to nothing (we were paying the same rent monthly as our mortgage payment).

    Why not try the northern rocks website they have a good calculator on there and it saves a trip to a financial adviser, hope this helps.
  • On one point mentioned earlier. Advice is service and a bloody good one, from the regular contributors (including our Simon Callow!)

    However, you guys tend to come on to this site for advice from like-minded people and from generous and kind professionals like us!?!

    I understand the mention of Northern Rock, althoug hwith regulation now, it is noyt possible for us to specifically highlight individual lenders and products, for fear of being construed as giving advice without having gone through a full and thorough fact find!!!!

    There is another lender out there that does offer a similar scheme, (although Northern Rock have had this Together mortgage for years now!)

    I am not based in Leeds, but if you wanted to send me a PM or email, then I would be happy to find out more from you and then give you various options. For free!!!
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • ChopChop Forumite
    50 Posts
    On one point mentioned earlier.  Advice is service and a bloody good one, from the regular contributors (including our Simon Callow!)

    However, you guys tend to come on to this site for advice from like-minded people and from generous and kind professionals like us!?!

    I'm really sorry if I've offended anyone by asking for free advice and implying that good advice is not a service. :-[

    This site really is a god-send for people like me who are 'starting out' and are terrified of the whole mortgage thing. I've learnt so much from just reading past posts and articles on this site.

    So yes, I am depending on 'generous and kind people' to point me in the right direction.....as such, I've Pm'd you Fairdo!!

    Thanks to everyone for their replies, it's very reassuring to know other people have been in a similar situation and come through the other side!

    Chop :)
  • Not a problem Chop.

    I think some of those contributors (maybe me included) sometimes have a rather dry sense of humour. This is probably a pre-requisite for working in the industry nowadays!

    I do have another personal note to make at this point. That is that the HBOS Homestart mortgage does concern me somewhat, but like many options, is the right thing for a considered few who know what they are getting into.

    Interest Only on a short term basis is quite a specialist answer and not to be taken lightly. I am not the biggest fan of this scheme, because it seems to be open to many and not necessarily given all the Caveats that it should. Mainly because many who would take this option are probably too busy getting their first home and worrying about getting the Mortgage agreed to think of the consequences of affordability once the Interest Only mortgage reverts to Repayment.

    Perhaps I am being a bit unfair, as it can get people onto the property ladder in the first place and graduates can often have accelerated earnings in the early years, but I would say be very careful to anyone considering this type of option.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • ChopChop Forumite
    50 Posts
    Thanks for all the advice Fairdo.

    I am wary of interest only mortgages and similarly of anything that is over 100%....I'm worried enough about 100% mortgages!!

    However, the property market in Yorkshire still seems to be doing well - although I'm no expert - so that surely would go in our favour in terms of it being 'less' of a risk.

    I'm just so tired of throwing more money down the drain on renting, and I really want to 'do' things to a home without the worry of a landlord keeping your bond for hammering a nail into a wall!
  • ChopChop Forumite
    50 Posts
    The more I look into it, the more it seems like not having a deposit seriously disadvantages you.

    Would it make more sense therefore to continue renting and saving money for a deposit or is it better to just get on the ladder rather than wasting more money on rent?

    Just can't work out to do for the best, especially with today's news that house prices (and interest rates) are possibly set to fall.

    :-[
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