First time buyer with no deposit!!

catgirl_emi

Hello,
I'm looking for some much needed advice. First quick question - are there any current 100% mortgages available on the market at the moment?
I'm a key worker - with no deposit and am really keen to get on the property ladder. I was looking into a scheme where i'd have got a 25% mortgage and the other 75% on a rental basis, what i then found out was that i still needed a deposit on the other 25% as technically it was 100% of the amount i needed - so a deposit was still required. So i felt really disappointed by that.
I'm also looking into the FTBI - first time buyers initiative, i know this scheme is offered by the government but also other large housing companies offer it e.g. barretts, crest etc. What this scheme seems to be to me is you get a mortgage for say 50% and the other is a shared equity loan - so you pay that back starting 3 yrs into it for example. However its not clear to me whether you still need a deposit for these schemes? As on their advertising it says "no mortgage deposit required" . I can put aside money for legal fees etc. but not enough for a deposit.
I have also looked into renting - which i'm not keen on and aside the initial fees of setting up to buy a house / flat it seems to be more expensive on a monthly basis!
So really i'm looking for anybody's experience / advice as to what to do! I currently live with my parents, but i'm not willing to stay here for the next 5 years to get a decent deposit together!
Many thanks!!!

[Deleted User]

A bit harsh there Zaphod but somewhat true.

Buying without a deposit now is just not possible and rightly so, the 25% deposit the banks are now requesting is to cover the 25% drop is value after you buy.

I would steer clear of shared ownership schemes etc and simply suggest that you put your money aside into savings and wait for prices to fall.

Lavendyr

Crumbs, what happened to "plz be nice to all moneysavers"?!

Welcome to the forums catgirl and please don't be upset or put off by the second post above. Unfortunately however rude the previous post was, it is fairly accurate I'm afraid. There are no 100% mortgages available at the moment - the banks are unwilling to lend.

I would recommend you rent for a while and save a deposit. In the long run you are likely to be better off this way. I am sure someone will be along shortly with some helpful advice, but I didn't want to run without welcoming you to the forums & apologising for the attitude of the second poster which is totally uncalled for.

indianropetrick

catgirl_emi wrote: »

Hello,
I'm looking for some much needed advice. First quick question - are there any current 100% mortgages available on the market at the moment?
I'm a key worker - with no deposit and am really keen to get on the property ladder. I was looking into a scheme where i'd have got a 25% mortgage and the other 75% on a rental basis, what i then found out was that i still needed a deposit on the other 25% as technically it was 100% of the amount i needed - so a deposit was still required. So i felt really disappointed by that.
I'm also looking into the FTBI - first time buyers initiative, i know this scheme is offered by the government but also other large housing companies offer it e.g. barretts, crest etc. What this scheme seems to be to me is you get a mortgage for say 50% and the other is a shared equity loan - so you pay that back starting 3 yrs into it for example. However its not clear to me whether you still need a deposit for these schemes? As on their advertising it says "no mortgage deposit required" . I can put aside money for legal fees etc. but not enough for a deposit.
I have also looked into renting - which i'm not keen on and aside the initial fees of setting up to buy a house / flat it seems to be more expensive on a monthly basis!
So really i'm looking for anybody's experience / advice as to what to do! I currently live with my parents, but i'm not willing to stay here for the next 5 years to get a decent deposit together!
Many thanks!!!

Go and rent and save some cash. House prices will be at least 20% cheaper than they are now by the end of next year, or beginning 2011.

Zelie

I'd echo the advice to save for a deposit. These part-ownership schemes are *not* a good investment and you'll get a cheaper (and possibly better) property if you buy on the open market. Why not check out the boards on ISAs and savings and the ones for upping your income. Earn more and maximise your savings.

londongirl

Well just to put forward a different point of view and a different spin on things. Its all very well people saying go and rent and save for a deposit - its not necessarily that easy - in the area where i have just bought my studio flat rental prices for same or worse studios are in the £550 / £600 mark per month. There is no way i could have afforded this and to have saved as well.
I didn't want to go with shared ownership and all the clauses that entails plus the paying rent part - i've gone with the OwnHome scheme and bought 60% of my property on the open market. When making my offer I was in exactly the same negotiating position price wise as I would have been if i had been buying 100% of the property myself. The offer accepted was £125k (after initial asking price a few months before of £144k) and i now have a mortgage for 60% of that which with the base rate falling is now a very comfortable £298 per month which allows me to overpay my mortgage a bit and save a bit and also have a social life. Had i been renting this would not be the case.
I put no deposit down (though i am lucky enough to have an okayish amount of savings in the bank which I intend to use if and when i want to increase to buy the rest of my flat). So the OwnHome scheme is one where you can buy without any deposit. It is not specifically for key workers either just anyone on a low income (well they say low - household income has to be less than 60K i think so not so low!)
Having had a pretty good experience with this scheme i have recommended it to a couple of other people but when they phoned up they were told funding won't be available again until April. So i would suggest you look into this scheme if you are interested and call up for more information as soon as possible in April.

Sorry to everyone else who is just saying no don't buy and save up for deposit etc. I agree saving up for a deposit is the best thing to do if you can - but not everyone can in their current position. I am ironically now in a much better position financially and able to save each month than i would be if i was renting (and a much better position mentally than if i had stayed living with my parents any longer!)

I'm not saying the scheme is for everyone but i personally believe it is a lot better than shared ownership. The equity loan they give you is interest free for 5 years and then 1.75% interest for next 5 years. 3.75% after that i believe and the whole thing is repayable after 25 years. Again much better in my opinion than the schemes run by housing companies such as Barrett etc where you are expected to pay back the loan within 10 years.

So if you really aren't able to save for a deposit this is one scheme that would allow you to buy without one - you have to get your mortgage from the Co-op and the equity loan from the housing association basically acts as your deposit - i was therefore able to get access to the mortgage rates for people with 25% plus deposit as I was only getting a mortgage for 60% of the flat value.

One thing i will say though is you will still need a certain amount of savings - if you wnat to try with no deposit fair enough but you need to have something saved up for legal fees and a saftey net/ cushion for when you move in. I saved like mad while living with my parents for 8 months and was lucky to get a small advance on my inheritence from my grandparents too. I haven't used it for a deposit but my legal fees and associated costs probably came to about £2k and the furniture and other things i have had to buy (and i already had quite a bit having lived with my fiance previously) came to about £1k. Now i'm just about to pay a few hundered for a plumber to come and fix a few things. So save as much money up as you can while you are looking into buying.

Hope that helps and gives a different view on things.

planning303

I'm a first time buyer who went to see a mortgage adviser this afternoon to see where i stood and how much i needed to raise.

I have currently a very small deposit (3%) and am looking to borrow approx 90K, obviously i realise that i wont get a mortgage with that.

The mortgage adviser suggested that i get the mortgage over 35 years and with the money that i save get a 7.5K load over 10 years !!!!!!! :eek: to pay for the deposit.

I was quite shocked...

Maybe you should try that

liggins

poppysarah

If you can't afford to buy, then don't.
Saving for a deposit should have remained compulsory and would have helped prevent the insane price rises we've seen.

Owning - you have buildings insurance, all repairs, redec costs, too.

hethmar

Dont rush into buying at the moment, the market is still dropping, you can save whilst you wait to see what happens.

Zelie

From the OP's post she is living with her parents at the mo' so it's not a case of having no money to save. I'd bet that she's saving a chunk of money there. Although staying 5 years just to save a deposit is enough to drive anyone insane* perhaps deciding to stay for a year or 18 months and then move into a flatshare is the better way to go.


*Although who knows, perhaps I'd get along with the OP's parents. Couldn't live with mine though!

hethmar

Zelie wrote: »

From the OP's post she is living with her parents at the mo' so it's not a case of having no money to save. I'd bet that she's saving a chunk of money there. Although staying 5 years just to save a deposit is enough to drive anyone insane* perhaps deciding to stay for a year or 18 months and then move into a flatshare is the better way to go.


*Although who knows, perhaps I'd get along with the OP's parents. Couldn't live with mine though!

Perhaps you could swop ?:T