First Time Buyer Needs Advice

dawn_roses

Hi, i've just been to see a house this morning which needs modernising i.e. new wiring, central heating windows and maybe a bathroom/kitchen extension.

Thing is i really like it and i want to put an offer in, but i haven't seen about a mortgage yet and i don't know if i can put an offer in before i sort one out.

Also the estate agent told me that it's hard for first time buyers to get mortages on properties which need modernising, but i have enough for a 20% deposit.

The property has had a lot of interest and if I go and see about a mortgage before I put an offer in I will probably miss the opportunity.

Any advice greatly appreciated.

poppysarah

"miss out" on the opportunity to buy a wreck?

princessamy86

Have you priced up exactly how much all this work will cost, plus a contingency fund? You'll need all this in cash, or at least be able to live in the property while you save up for the work (unless you have lovely parents who will let you live at home for peanuts while you do it). Are you offering lower? Or do you think it's worth the asking price? If you haven't seen anyone about a mortgage yet, how do you know anyone will even lend you any money? Sorry this sounds harsh, but just checking you have thought it through!

You can certainly put an offer forward before you see anyone about the mortgage, there's just no guarantee the vendor will take you seriously. However, you could put the offer forward today, then go straight to a mortgage advisor on Monday and get the ball rolling. Has the EA got a mortgage advisor in the office you could see today? They won't necessarily have the best rates, but knowing you can borrow the money would help. Then you can put the legwork in on Monday and get the best rate for yourself and an AIP.

If there are structural problems then yes, it could be difficult to get a mortgage but this would apply to all buyers, not just first timers. It depends what the mortgage company value it at, in the current condition. They may impose conditions with certain aspects of work being done before they will lend on it, but if it is just interior modernisation then there shouldn't be any problem.

Hope that helps

michael1983l

poppysarah wrote: »

"miss out" on the opportunity to buy a wreck?

That was very helpful, do you ever miss an opportunity to post something negative?

dawn_roses

Hi i work for a building company and have done for about 10 years so i know roughly how much it would cost. I have enough money to do the works + 20% deposit and contingencies.

tcb1973

I've just got a mortgage offer on a property that needs stuff doing - kitchen/roof/wiring etc - we've budgeted for what needs doing first (roof) and the rest we'll save and do along the way. We are in it for the long haul...

I wouldn't be put of by any negative nancy; just make sure you've a sensible budget for work and you can live in it whilst you slowly do it up - it's how things used to be done, or so I'm told.....

I also made my offer without my AIP in place - sorted it the week after, got the AIP to the EA within the week and then complied with all the requirements of the mortgage company and got the offer a week or so later.

If you love the house and the area is good - full steam ahead I say

N>B and providing you're aware of the possible pitfalls along way and have a game plan to deal with worst case scenarios (i,e house price falls/neg eq)

good luck

leveller2911

poppysarah wrote: »

"miss out" on the opportunity to buy a wreck?

Thats really helpful advice.............why bother posting at all?:rolleyes:

Thousands upon thousands of "wrecks" as you call them have been transformed into good homes.I have worked on quite a lot and from my experience they nearly always make good financial sense.

To the OP,TCB gives good advice in their post and again don't listen to plonkers and smart a s s e s

poppysarah

A lot of peo think they will save money by buying a wreck and doing it up. however it's not as easy as that and with no mortgage in place and potentially a lot of interest this might not be the property to set their heart on.
Plus good costings should be done - and there's enough posts on here about how much stuff costs to do, as well as the inconvenience.

If the OP had said they had a mortgage waiting to go, lots of DIY experience and full costings on the work then I would be one of the first to say go for it.

Buying a wreck is often portrayed as a great way to make money on TV. In a rising market this is true and budget overspends are ok.
Unless comparable houses needing no or little work are many many thousands more then it's probably not worth the effort.

You can stamp your mark on a place by arranging your furniture. You don't actuall need to knock down walls to do it.

besonders1

As long as you buy in a nice area, a wreck can be good value and ensure that its priced appropriately i,e, less than a house in good order then its bargain in disguise. A lot of people will be put off buying apart from developers so you'll almost certainly get it for less. I actually think buying a wreck is more exciting than buying a palace, why pay thousands extra for someone else's tastes? Due to the no's of repos and sellers withdrawing from the market, the may be less choice for buyers

typeractive

I know what you mean with regards to buying a house in need of a lot of rennovation. I also take on the views of others - such as Poppy. I have been in a very similar position. Whilst I know my monies would be able to stretch towards a more expensive property (which you never know - I could maybe knock back on the asking price and be in a better position) there is 'something about' this property in need of rennovating.

I know how much potential it has (lots). I like the fact it's an older build, and modest about it's appearance. I think I'd rather try and have a smaller mortgage and then do my best with my saves to try and rennovate as best as possible - an exciting project. The benefit of buying a house already complete of course is I can put down a bit more of a deposit, and have some cash in the bank for a [STRIKE]rainy day [/STRIKE] I mean furniture and bills.

I'd contact a mortgage advisor first thing - see what they say.

Good luck

sunnysea83

I have a friend who is a mortgage advisor, i recently moved and therefore can give you a little assistance.

Its not that a mortgage lender wont lend on a house that needs work, its the valuation that becomes difficult because the valuation is done on the house as it sits, although often than not and in my case the valuation is actually just done online these days and a possible outside viewing and no internal.

If you have the deposit and sounds like you have a good one then pop in and see a mortgage advisor monday, they will tell you how much you can borrow and then you will know if you can afford it, for example it maybe 150k and you have 20% deposit 30k but the mortgage company because of your income etc will only lend you 100k and therefore your 20k short.

As a seller i would only consider offers from someone i knew had a mortgage offer and this was because when i had my first offer (first time selling) i didnt ask my EA does the buyer have a mortgage offer but i think my EA would have asked as they took it off the market, however a week later the buyer came back saying she hadnt had an mortgage offer and the offer she now had was less than she offered me and could only afford x by which time id fallen in love with a house that i then couldnt afford as her new offer was 20k less.

I would also like to say that my house needed a lot of work doing when i bought it 7 months ago, i knew when offering etc that it needed a new bathroom, all carpets completely redecorated etc and i budget 10k for all of this, then when completing and getting the keys and the sellers stuff removed i realised that i would also need some better rads, a whole new kitchen not just doors, new fencing, work on the garden etc and its actually ended up costing me not short of 15k. So its wise to have a good contingency sum.