Advice on what to do.

typeractive

Hi guys,

Looking for advice and opinions – sorry it’s a long post and I REALLY do appreciate you reading it!

Before Christmas I spotted a house for sale that looked like a good bargain, sadly I just missed out on it. Anyway I spotted that the house was back up for sale, so I called the EA and indeed the sale has fell through. However there has been another offer placed (which infuriates me as I asked to be specifically informed if this place came for sale again and I’m on their mailing list etc). Viewings are closed at the moment and the EA needs to speak to the owner (some sort of part ex style company) to see if they will open up viewings. I will find out on Monday.

Now, I explained to the EA my interest, and my current position, which I could hear her typing down. She said though an offer has been made it’s not necessarily the highest offer they will accept but the quickest or strongest position. I’m in a strong position:

Some details:
House: £75000
My saves: £35000
Position: FTB
Salary: £22000

I don’t have a mortgage approval lined up, and whilst I’m pretty confident I will be able to access enough money, I am worried about how fast I have to move and ‘learn’ about mortgages in a short space of time. Where do I get the best deals etc etc. I have read Martin’s guide on whole market lenders and stuff though this was a wee while ago now and everything has changed (market conditions, and my conditions (for the better)). Fixed or variable? Etc etc

So, I will have a look around on here for some tips on getting a mortgage / trying to get the best deal!! Though I would also like some opinions on what you guys think I should do in terms of my finances. Having never owned a house (live with folks) I would need to buy a load of stuff / decorate /furnishings etc. I know I will gather some stuff from our attic and my sis’s house – could even take my own bed! heh I am wondering how much I should put down on a deposit – what would you guys think? Whilst putting the whole lot down would be super for a low mortgage payment, I don’t know if I could live without having a bunch of savings as contingency. I was thinking put down £25k and try to keep £10k in the bank (isa). Being a bloke I’m typically frightened with commitment so I would like the opportunity in a mortgage to switch to renting the property if I decide I want to move out / work abroad etc.

If I can get the payment down low, I think I would like to try and pay it off quicker (idealist I know). I’m filled with hope and excitement as I have been looking ever since seeing this house pop up for sale, and I haven’t seen anything as good within that price.

What would you do if you had the same scenario? How much deposit would you put down? What type of mortgage would you look for?

As I state all help is gratefully received.

Cheers

lincroft1710

As you're a bloke, here are the views of another (but much older bloke).

If you're frightened of commitment, why are you buying a house? They are a BIG commitment. Many lenders do either mortgages for homebuyers or for renting out, so if you want to leave and rent out you may need a different mortgage.

Fixed and variable rate mortgages both have pros and cons, most obvious con being being on fixed at 7% when mortgage rate is 4%, or on variable when mortgage rate is 10%. I'm on variable for the record.

You can spend as much or as little as you want furnishing your home, personally I would spend as little as poss, sites such as Freecycle always have furniture/electrical goods on offer and they're FREEEE! As you have already found out relatives (and friends and neighbours) often have stuff they don't want.

Deposit? Although it would make economic sense to put down £35K, it wouldn't be common sense. Your figure of £10K in an ISA, will probably end up as £8K, by time solicitors, surveyors and one or two items have been bought. I personally think £5K min in ISA if at all poss, so don't disagree with you putting down £25K. Remember, you'll be entering world of council tax, home/contents insurance, water/sewerage bill, fuel bill, which altogether for cheapest house could all add up to a minimum of £2,000 a year probably more.

typeractive

If you're frightened of commitment, why are you buying a house? They are a BIG commitment. Many lenders do either mortgages for homebuyers or for renting out, so if you want to leave and rent out you may need a different mortgage.

Yeah I know, they're a massive commitment. I'm not THAT worried about commitment that I won't actually buy a house. I guess it's just being apprehensive. I really want and need to get on the property ladder, I just like to keep my options open. Plus this house (all being structurally sound etc etc seems like a bit of a bargain. I could probably get a property that costs a lot more, but I want something a bit more manageable if circumstances change)

You can spend as much or as little as you want furnishing your home, personally I would spend as little as poss, sites such as Freecycle always have furniture/electrical goods on offer and they're FREEEE! As you have already found out relatives (and friends and neighbours) often have stuff they don't want.

Yep

Deposit? Although it would make economic sense to put down £35K, it wouldn't be common sense. Your figure of £10K in an ISA, will probably end up as £8K, by time solicitors, surveyors and one or two items have been bought. I personally think £5K min in ISA if at all poss, so don't disagree with you putting down £25K. Remember, you'll be entering world of council tax, home/contents insurance, water/sewerage bill, fuel bill, which altogether for cheapest house could all add up to a minimum of £2,000 a year probably more.

Yeah I was thinking about the surveys and the solicitors fees bits (hadn't forgotten about them).

Thanks very much for the reply. Keeps it all realistic in my mind. Anyone else with views and opinions?

Cheers

Doozergirl

It sounds fun

You're in a good position financially, the price is modest and I hope you get to make your offer!

I'd ask on the mortgage board about mortgages - you'll get more replies on that front. It used to be that you'd simply go to an independent whole of market mortgage broker but I understand that these days banks are often keeping the best deals to themselves.

typeractive

Thanks Doozergirl,

I might just pop this thread over onto the mortgages board. I was also under the same impression of using a whole market mortgage advsior etc. It sounds a bit more complex now on where to get the best deals!! Nothing is ever straight forward for me! lol

Cheers!

Doozergirl

typeractive wrote: »

Nothing is ever straight forward for me! lol

Cheers!

It would be far less interesting that way!

I can't decide whether to buy a new car or not. Honestly, I could take quicker, more decisive action on buying a house. I've already missed one really good deal and there's H today saying 'I don't know why we didn't buy that' :wall: He should have said!

typeractive

Without hijacking my own thread lol - and out of interest what type of car are you looking into? lol The second hand car market has fell right on it's !!! and there are some good buys to be had (having said that it also makes my car worth peanuts ). I have also been looking out for a new car. I emailed a garage the other day and they replied with regards to a car they had for sale - great! When I rang back up it had been sold!! I was semi gutted. I say semi, as it wasn't the colour I amd holding out for and it had high mileage. I continue to look. Maybe I should buy a caravan and then I can have both a new ride and place to stay! heh

Doozergirl

I was looking at an Audi A4 cabriolet. It's being discontinued and we were offered a price that even the guy at the main dealer urged me to bite the other vendor's arm off. My husband has decided he will keep his pile of poo in order to buy a proper big car while he uses his for work.

So he wants an A5 but I feel a bit like I'm buying 6 months earlier than I wanted to, but also aware that once these surplus cars are shifted, they are likely to go back up in price. So not simple and I'm also intimidated a bit by the car. I have a Mini!

Doozergirl

typeractive wrote: »

Maybe I should buy a caravan and then I can have both a new ride and place to stay! heh

We have neighbours that did that. They went all round the country when he retired and then eventually found a plot to build their house. Their caravan has a remote control that reverses it out of the parking space!

I think I might get one when we get old. If it had a decent toilet!

KiKi

Hi there typeractive

Thought it might be useful to share my personal experience with you - although it of course should not be construed as advice!!!

I paid around the £1700 mark for my purchase, plus stamp duty, plus deposit. The £1700 included tax for solicitor's fees and a full structural survey.

I also got a flexible mortgage so I could overpay / offset / take mortgage breaks with no penalty if I wanted, and a variable one (at base rate +0.49 for life). I personally think it's easier to get out of a variable mortgage and fix it if needs be, that get out of a fixed rate to change to variable, which usually incurs a penalty if you want to get out of it early.

Given your savings, and your desire to pay it off ASAP, I would either put down £25K deposit (I'd keep the other £10K for rainy day / boiler breakdown / new stuff for the house!). or put down the minimum and offset the rest.

Offsetting your mortgage against your savings is also a great way to get your mortgage down but still have access to your savings. For example, I have a mortgage of, say £180K. But I have £60K in savings. I could pay off £60K of the mortgage straight away to reduce the amount I owe, OR I could 'offset' it against the mortgage, meaning that I don't pay interest on £60K of my mortgage, only £120K. (Figures are examples only!) So the mortgage gets paid off a lot quicker, but you have access to your money should you need it.

Look for a mortgage with a reputable lender. Make sure you look at the rate for COMPARISON. Many lenders will advertise, say, 3.5%, but that's at a fixed rate for three years. After the three years leaps to, say, 5% and so the actual rate for comparison (which you should use to compare mortgages) is more like 4.5% (for example). Have a look at lenders and rates on moneysupermarket.com - enter your details - just to give you an idea.

I personally would go with a variable mortgage if you don't need the certainty or stability of knowing what your payment would be.

If you're prepared to have a look around and research, you will probably be able to work most of it out yourself (you sound pretty intelligent and level headed). Just don't get sucked into going into a high street bank and asking them what they can offer you - it's too easy to commit to something you don't realise you've committed to. They'll also sell you crap you don't need. Have a good idea of what you *must* have from a mortgage first, look at the websites, hunt down the mortgages - or get a whole of market broker to do it for you.

Hope that helps.

Oh, plus when you go and get some quotes from solicitors for their fees to purchase, make sure you ask them all for a breakdown of ALL fees and disbursements so that there are no surprises when the bill comes in!!

Cheers
KiKi

m_13

Doozergirl wrote: »

I was looking at an Audi A4 cabriolet. It's being discontinued and we were offered a price that even the guy at the main dealer urged me to bite the other vendor's arm off. My husband has decided he will keep his pile of poo in order to buy a proper big car while he uses his for work.

So he wants an A5 but I feel a bit like I'm buying 6 months earlier than I wanted to, but also aware that once these surplus cars are shifted, they are likely to go back up in price. So not simple and I'm also intimidated a bit by the car. I have a Mini!

My brother-in-law goes to a lot of car auctions. Prices are up because of lack of stock. In particular, cars around three years old are becoming scarcer because companies aren't buying as many new cars. Garages are still buying demonstrators and pre-registration vehicles to keep their turnover but having to do silly deals to get rid of them (I know, we bought one and then my parents did too). The cars they are getting back in part-ex are earning them more via the auction though.

Be careful of cars with limited exposure in the UK that are discontinued. I'm not sure what the figures have been like for the A4 cabriolet but whilst rarer cars retain their value they are also more difficult to get parts for. I have a colleague who has to get bits on eBay Germany and have them shipped over to be fitted!