First Time Buyers - what to do?

emmaandchris

Hi. We're first time buyers with a combined income of £61K. The only fixed outgoings we have are £200 per month on a loan for the next 2/3 yrs and we both have HP agreements for a car (which are both covered by company car opt out scheme payments - over and above the £61k basic).

We have around £8.5K saved and are in a position where if we really tightened our belts we could save approaching £1000 per month.

What do we buy???????

We really want 3 bedrooms in the midlands / northants area (to give idea of prices) and a new build. We have already been advised the value of the home is not likely to go up until a year after the development is finished - which is fine, we want a house, not an investment.

We've seen a house at £164K. The builder was offering a 15% deposit. But we want to buy the house in a traditional way (100%). We are pretty sure we could get the 15% knocked off the house price - but then how much more could we get knocked off? another 15% (totalling 30%?? off list price?)

This way we need to save an extra £3K for the deposit (house priced at £115K). Is this unrealistic - or worth a try? We have budgeted to pay around £900 per month on a mortgage as we want to be able to afford eveything on one salary if the worst happens - in today's climate pretty wise we feel.

Would appreciate anyone's thoughts. Thanks.

Jonbvn

The key is what your mortgage lender values the property at, not some pie in the sky value from the developer. These days, I think you will find that most lenders will not accept these so called "builders deposits", since they are complete fiction.

The developer telling you the value of any house will not increase until the development is finished is complete BS. Haven't you noticed that house prices are dropping like bricks???

Given the above, you must have a deposit of at least 10% of the real value of the house plus other costs (stamp duty, solicitors fees etc.). In your position I would first pay-off your debts and then start saving for the deposit.

Who told you a 100% mortgage was the traditional way? They were lying! I would also suggest you do some more research on this forum and elsewhere regarding purchasing NB properties.

Met_Bobby

Give at go. Builders are discounting property to make sales but you may need to have a bigger deposit. The market value of the property is what buyers are prepared to pay, regardless of what the builder is asking for initially.

sal_strawberry

There are not many mortgages out there for only a 10% deposit. We are in a similar position. Have 10% depoist for £160k house so want to borrow £144k. The best mortgage we have found through our broker is 6.29% and would cost £960 a month (just the mortgage). He advised us to get the credit checks done ASAP as banks etc are being incredibly tight on mortgage lending and it is a bit pot luck at the moment. Having a good credit report and wage does not necessarily mean you will get approved if you only have 10%.

We can save more but it will take years so we ar going for it but we don't know what the outcome will be!

cjackson37

try post office - they are offering 90% at lower rates but even with excellent credit rating etc doesnt guarantee a lender will give 90%.