FTB getting a mortgage

sedg00

Hello All,
Me and my girlfriend are aiming to get a first time mortgage. We know the pitfalls and are aware of the timing and problems that can occur with doing this. Yet, i wondered what advice any of you guys could give us.

Firstly, the bad news. We have no deposit. Not a penny. We just haven't been able to save anything over the past few years.

But. There is good news. I have a good job, with a fairly decent salary. Lets just say between us we earn a yearly amount of over £45-50k.

We have been paying rent, easily of over £600 a month for the past 2 years. So can comfortably afford a decent enough monthly payment.

My parents are willing to act as guarantors on our mortgage as a help to get us off the ground.

We would only be looking for a property somewhere in the region of £120k.

Any advice? I have noticed recently a trend developing where the vendor pays the 5% or 10% deposit in order to get a sale on a house.

What is the panels thoughts on this?

All the best

wymondham

My advice is to save like mad for a deposit and all those extra costs whilst the market goes through this turbulent spell. Pay off any debt's and don't be tempted in with any schemes to 'help you buy the easy way'. when the market picks up you'll be well set as that 120k house will be far less!!

Apart from that, good luck!

Northants_Simon

Haver you looked at the Homebuy schemes? They lend you between 15% to 50% as a desposit, you finance the rest with a mortgage. You can apply if you earn under £60k, but they do give priority to certain grouples of people like keyworkers, first time buyers with a family, those in social housing.

They have various schemes including one where you can buy any house and use any mortgage, one where you buy a newbuild house and one where you use a Co-Op mortgage.

Many lenders don't like gifted deposits and a 5% gifted deposit means you will have a high interest rate. The Homebuy schemes have their problems, but generally you can get a much better interest rate from a bank with the 15% to 50% deposit. This then becomes an equity loan (Homebuy have a charging order for 15% to 50% of the value of your house), you pay a small amount of interest but not any capital. When you sell you pay back the loan, you can also pay it back at any time or at the end of 25 years.

Northants_Simon

Forgot to mention, you still need about £4000 for legal fees and stamp duty. So it's not much good if you don't have any money at all.

sedg00

Thanks for your help Simon. But we wont require any stamp duty i assume as the home will be lower than the threshhold. It's very depressing isn't it?!