My Journey as a First Time Buyer!

Zandoni

Kynthia wrote: »

My mum gave me advice when buying:
1) Negative equity isn't the end of the world if you aren't planning on selling. If it's a possibility then get a long enough mortgage so that you aren't trying to remortgage with no equity.

Negative equity isn't so bad if you have had a house for a few years, but to be a first time buyer in free fall market is a completely different matter. The OP will be paying for it for the rest of his life.

Saver-Rob

Well thanks for all posts but this thread is focusing too much on my relationship and peoples advice about that. Regarding the post about her being a gold digger I'd just like to point out to all that she has alot more money heading her way in time including several nice properties. Perhaps if she had started this thread some people may be calling me the gold digger!

But anyhow, back to the main point, I have been spending time on RightMove and have contacted agents about a couple of properties now. I cannot imagine me buying over the next few months unless something fantastic came along but I'm just getting a feel for it all - learning how estate agents work and the process in general.

Our next steps would be to properly look into what we can and want to borrow and to start to register with estate agents to be contacted when things come up that we might be interested in.

Skyhigh

Hi Rob,

I'm was in pretty much the same situation as you last year, so I'll go on to go over my story - even if it meanders a bit, hopefully it will be of some help. Plus we've got friends in the same boat (and age) currently looking to buy.

I had about £15k saved and earned about the same as you. We had no other debts (credit, loans, etc) - aside from my student loan.

So I had the deposit and she had bought the car (outright, needed for work, finance would have cost more than the mortage rate!) and was providing the money to help furnish the place.

We did consider only putting my name on the deeds as I was paying the deposit and would pay the mortgage, but we put both our names on as were sharing expenses and had been together 6 years, we were secure in our relationship, so it wasn't an issue.

Renting was pointless as rents per month were nearly the same as a mortgage. Seriously, £600pm for a flat? When I can buy a 2 bed house for the same, or even less. [Probably due to all the buy-to-let mortgages in the area!]

Houses in our area are quite cheap, we'd started looking at houses casually while at uni, after about 8 months of viewings and 2 failed attempts to buy other houses (one wouldn't go as low as we wanted, the other took their off the market) we found the house we wanted in March 08.

3 bed, detached, with garage, large garden, cul-de-sac next to some fields as part of a new-ish estate. 4 years old.
Got the price down from £160k to £141k, offer accepted in April 2008. Moved into the house in May.

So this left us with about £127k in mortgage after we'd paid various fee's at a fixed rate of about 5.5%, working out to £800 a month. We're very happy and it's all really good, we're not short of cash, plus recently I've got a good raise in wages meaning we're now saving quite a bit of money.

The house next door, the same as ours it selling for £139k. Although its not up to the same interior standard as ours.
This doesn't bother us at all, it could sell for even less too - but we didn't buy our house as an investment to make money, we bought it so we could live together and have more time together - which we can't really put a price on.

We're not planning on moving after only 1 or 2 years, and on average market prices recover after 3-6 years after a crash and they always go up over 7 year periods.

We could have probably saved a few thousand by waiting nearly another year, but when you've both been to Uni and living together then go back to living with your respective parents......it's not easy. Plus I've saved god knows how much in petrol!

Also, the value of the house may have fallen slightly and interest rates have dropped (and we're on a fixed rate mortgage), but its harder than ever to actually secure a mortgage at a good rate. Plus if you look at the history of interest rates:
http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp you can see that rates on average have been much higher than 5 or 6%.


I expected a crash, I looked at history and the crashes of the 1990's and earlier (by asking my parents). I looked at the years affected and the relative interest rates (where it rocketed).
I considered that they could drop, but were also likely to shoot up (looking at the history of the rate). Considering that on average rates had been above 6% - and so the mortage rates even higher, a fixed rate of 5.5% for three years was good and it protected us against the risk of the rates shooting up during a crash.

Like most people, you're probably not buying to make money, and at the end of the day you only need to make sure that you can afford to live comfortably, can pay the bills and the odd unexpected event (car breaks down, new washer, etc).

What many people making comments like "just wait a few months....a year...a few years" is that......they most likely already have a house and they're not living at home, hence they're not in the same boat as you.
If you're OK to carry on living at home for another 6 months or year, then maybe thats the route for you, and you could save some money, it depends on circumstances really.

In saying that, don't jump at the first house you see and use the current market to your advantage. Have a really really good look around and consider all the aspects of the house, compare houses.

So in summary....all you need to do is make sure you can afford to live and that you'll be happy.


-- Sky

Note:
We got a bargain on the house in the first place, so we've not "lost" much compared to next door, although we may have done if we'd have paid the asking price.

Skyhigh

Oh, also if you're looking for a house one of the best sites we found was OnOneMap.com, although this has recently been bought out by these guys, so it's all here:

http://www.dothomes.co.uk

Has a very nice interactive map so you can see where the houses are and click on them for more details.

Example search: http://www.dothomes.co.uk/buy?q=dn7

hethmar

Rob, you sound very mature for your age - Im assuming your girlfriend matches your maturity. We can all wait for ever for the right house, right time, right person - but thats wasting your life, you have to do what you feel is right at the time.

Wishing you both the very best of luck. (I married at 19 and we are still together after erm, decades )

geoffky

Kynthia wrote: »

Hi

Good luck with your purchasing dream.

If you find a property that is right for you, at a price that you can afford then don't worry too much about the falling market. No-one can know when prices will rise and fall. Five years ago when I started to think about buying there was talk that a crash was due. I'm sure some people waited to buy and had to pay more for their property as prices went up!(QUOTE)



rob WHAT THESE BLOODY FOOLS WHO COME ON HERE SAYING THIS RUBBISH FORGET TO REALIZE IS IT DOES AFFECT YOUR LOAN TO RATIO A BIG DEAL..SO IF THE MARKET FALLS 30% SO DOES YOUR LTR....THAT'S WHY A LOT OF THEM ARE UP TO THEIR EYES IN DEBT BECAUSE THE DON'T HAVE A CLUE ABOUT MONEY AND DEBT.

Saver-Rob

hethmar wrote: »

Rob, you sound very mature for your age - Im assuming your girlfriend matches your maturity. We can all wait for ever for the right house, right time, right person - but thats wasting your life, you have to do what you feel is right at the time.

Wishing you both the very best of luck. (I married at 19 and we are still together after erm, decades )

Thanks. Some people say I'm old for my age but it isnt always a bad thing!




Thanks again all, especially Skyhigh - thats a big post! Glad to see it all worked out for you.

Perhaps I have started this thread a little early and some people are under the impression I am soon to buy. I'm not. I am however starting to look, observe and learn. That said, as previously stated, if something that I considered a good deal came along perhaps I would go in a bit earlier than planned. I am not buying as an investment though of course if and when the value did rise that would be a benefit. I & we are buying because thats the next step in our lives and is something we have both always aimed for.

As always comments are appreciated and I shall update the thread when appropriate.

sarastark86

1) I'm jealous - I wish I had that kind of money! Maybe if I'd worked instead of spending the last six years in education I'd have a couple more 0's on my bank balance :-(
2) I know you said not to go on too much about your relationship but I'd just like to say, I met my boyfriend in Aug 2006, then went abroad for a YEAR (he stayed in UK), then came back to UK and went to Newcastle to finish my degree (he lived in Essex). After 2 years of only having odd weekends spent together I then moved in with him permanently when I finished uni. We went from one extreme to the other. And it's been great! And we're hoping to buy this year or next. So that's for all the scaremongers above.
3) have a look at http://www.sharetobuy.com/information/house-buying-process.php for some useful info for FTBs.

Saver-Rob

Thanks for that link. And thanks for the support!

sarastark86

Also you could look at Merryn Somerset Webb's advice on moving in together and housebuying in her book 'Love is not enough: the smart girl's guide to money' (maybe buy it for your girlfriend?! excellent moneysaving tips!) - there is some useful advice on how to divide up and organise joint income so that it is fair to both partners, with a view to getting everything laid out so that the woman is not disadvantaged come maternity time etc - obviously the latter part not immediately relevant but all good practical info nonetheless.