First time buyer without much current info needs advise!

Jamesu_2

Hi All,
I've been reading the articles on the website for quite a while now but I've just joined the forum because I need some advise.
I'm looking to move out of my parents place and get on the housing ladder. I have had this in mind since finishing uni so I've been saving up. I want to start looking at houses but since the mortgage game has change so much recently I can't work out how much I can borrow/ afford and if anyone is going to lend to me at a good rate or indeed any rate at all! I live in Oxfordshire so houses are a bit more expensive than other areas of the country. My ideal is to get a two bed place so I could have a lodger to help pay the bills.
Here are my details:
I'm 26 and single and have no dependants
I have a deposit of £45,000.00
I have no debt at all and I've never borrowed money other than using my credit card that I pay off in full. Since I live at home my monthly outgoings are very low.
I have been working for the same company for 3 years and earn £22,000 a year and my job is stable (as far as I know!)
My parents are willing to help me out but I prefer to do this off my own back unless there is no way round it.
Can anyone give me advise on what my realistic options for getting a mortgage at the moment? Or should I be sitting tight and keep saving!

James

dogbot

Hi James,

The misses and I are in our early 20's and first time buying at the moment. We had all the same questions as you and more.

You really need to talk to an IFA. Ask friends and managers at work or of your family to get a reccomendation or look for one in your area. They will be able to advise what is possible in your circumstances. They can talk you though all the costs involved, types of mortguage you can go for and insurances you might need. It really is invaluable.

I will find a link and post it in a moment to a directory

We are a couple so lenders may be a little less wary - if one income goes there is another one still there etc. We are looking at borrowing about 3x our combined income with a 30% deposit. I have been told by our IFA there are key cut offs in loan to value ratios and deposits of 10% and 30% are two of those.

If you parents are willing to help you, don't be shy, you need all the help you can get! At the moment particulary the chances are their savings are earning much less than it would cost you to borrow the extra cash. This isn't money you are frittering away on a nice car or holidays, it is an investment to set you up for life.

dogbot

http://www.unbiased.co.uk/
I have seen this website recomended on MSE lots of times.

You can get some really good, unbiased advise about your options which sounds like just what you need from an IFA. You need to understand all the costs, options and implications of buying somewhere, particulalry on your own and you will never get all that to the degree of personalisation that an IFA can give posting on here.

P.S. they can be funded by fee or comission. Most worth their salt should be very willing to set up an hour or so consultation for free to disscuss things and they will get their comission later (which is surprisingly little compared with an insurance broker).

Jamesu_2

Thanks for the Advise!
Am I better searching for IFA or a Mortgage Advisor from that link?
James

sarah_elton

Hey James,

Most important thing (after checking you can get a mortgage) is to do a monthly budget and check you can carry on not being in debt!

I was about 25 when I moved out of home, and earnt around £25k a year. I rented a 2-bed flat by myself, so with a lodger you should be more than ok. I still live in a 2-bed flat (having owned one for a while and now renting again), and my monthly bills (excl mortgage) are:

Service charge (if you buy a flat/other leasehold property, highly variable figure) - £68
Council tax - £80 when living on my own with single person's discount, now £115 as I live with my partner
Electricity (my flat has no gas so this includes heating) - £80
Water - £30
Sky TV/Broadband/Phone Line - £50
TV License - £11
Contents insurance - £10

When I was living alone I spent £100-150 on food each month on top of the above.

When I first moved out of home I seem to remember I spent around £2-3k on furniture, kitchen stuff, etc. It's worth costing up the big items (fridge, washing machine, sofa, bedroom furniture) in advance and having a budget.

Gwhiz

If you have been to Uni surely you know the spelling is adviCe!

Secondly - just go to a mortgage broker and find out what you really can borrow. They will have all the relevant info.

Jamesu_2

Hi Sarah,
I agree, I need to make sure I am not flat broke every month if I do manage to secure a mortgage. Thanks for the info

Thanks for the spelling adviCe Gwhiz, they will let anyone into Uni these days...

toothe

you should be able to borrow a hefty sum.
me and my gf had only7k in savings and earn 15k per year between us (im still at uni) and we were able to get a 70k mortgage with a small debt.
id imagine you will have no problem. go into a bank and ask for a AIP you need one anyway as some places wont let you view without one.

suisidevw

FWIW, my wife and I earn about 40k, £35k deposit and can borrow plenty, probably as much as £250k but it's the monthly repayments that would stop one taking out a mortgage this rediculous.

Make sure you can afford monthly repayments and getting a lodger in would help you out no end. Good luck

PasturesNew

Jamesu wrote: »

...they will let anyone into Uni these days...

I think the bigger worry is that they let you all out again

bob79

Given that you have a large deposit, a salary and almost surely a good credit rating, you shouldn't have a problem getting a mortgage. Some banks on their website will given an indication of how much they would offer you as a mortgage. I put your details in the calculator of Lloyds:
http://mortgagetools.lloydstsb.com/borrowing_calc.asp
It says 98,000. I've been told that this is actually about 10% more then they will actually do.... so something like 90,000 pounds (with your deposit meaning a house of about 135,000 pounds).

Of course, as others have said: just because they offer it doesn't mean that it's smart to take it. More sensible is sticking to a mortgage of about 3 times salary (so a 66k mortgage and a 111k house).