Wannabe first time buyer - what do I need?

roxalana

Hi all,

I'm sure this has been covered at some point but I can't find it at the moment!

At some point I (like a lot of other people!) would like to get a mortgage and buy a house.

I have read the guide explaining the different kinds of mortgages but I'd like a bit more advice about how to go about things.

At the moment, I am researching how much houses are being marketed at in the area I would like to live in (and comparing with other areas) so I get an idea of how much things cost.

At the moment a 2 bed flat is approx £135k.

Am I right in saying that in the past you would have needed a 10% deposit but now you need 20%? I know that the more you have the better but can you get 90% mortgages now?

I also wondered if the percentage is based on what you borrow or the house value? i.e. is it 10% of the £135k?

How much additional money do I need to save on top of the deposit? I'm guessing I need money for fees, removal and stuff not working when you arrive etc. Does anyone have a sensible ball park figure?

Finally does anyone know what sort of income multiples are being offered at the mo (both for joint and single salary)?

Any other tips (the only other thing we are doing is creating a credit history where we pay off in full each month)?

roxalana

one more thing!

If we could get away with it we only want to borrow an amount that would be allowable on one salary - do they still assess the credit of the other person and would it still be in both names.

I only ask but we would hope to borrow 3.5 times the higher single salary cos don't want to overstretch but would want it in both names.

woody252506

You can get mortgages with a 10% deposit but the better rates will come into play when you go 15% upwards.

In terms of money for fees etc ill give you an idea what me and my partner are doing.

After we have taken off our deposit we will have £3K left. About £1200 will be on solicitor fees and others to do with the mortgage so that leaves £1800 spare.

We are lucky in that we have bought a lot of things already in preparation for buying our new home and that our parents are buying us a 3 piece suite and a few other things. Therefore we'll only need to buy a fridge freezer and a dining table and chairs.

We should then have about 1k left over to keep safe as emergency money. I think its common sense to have some money tucked away and 1k would be a good amount to start at IMO.

gecko

I have been looking into mortgates and agree with woody, 10% deposit will be at quite a high rate, 15% starts to get you a better one...

Have you considered life insurance, buildings + contents, MPPI etc? These do add up when you are looking at affordability.

gecko

woody252506

To give you more info Roxalana.

We intend taking unemployment insurance out too just for peace of mind with things as they are at the minute.

This will cost us £18 each per month.

bob79

The deposit nowadays has to be at least 10% of the house value. Remember that what you offer may not be what the bank later values the house at....

Borrowing 3.5 times the higher salary shouldn't be any problem.