first time buyer advice

steevs28

Hi All

I’m looking for a bit of advice regarding a mortgage.

Im currently renting from my local council and thanks to falling house prices I may finally be in a position to take the first step.

My question is I am quite a low earner at £19000 per year, so im looking to purchase a house at around £50,000 which needs work doing on it, I have the time and the effort for this so that seems the best way for me.

What should my first step be, I would like to borrow £50,000 but have no deposit at all to speak off, or any savings. Will I even get a mortgage?

Would appreciate any advice anybody can give.

Cheers

Steve

beecher

No you won't get a mortgage without a deposit of at least 10%. You also need to pay for fees etc so if you're buying a house at £50,000 you would need at about £8,000 or so in savings.

opinions4u

steevs28 wrote: »

My question is I am quite a low earner at £19000 per year, so im looking to purchase a house at around £50,000 which needs work doing on it, I have the time and the effort for this so that seems the best way for me.

What sort of work? Be specific as some circumstances can make a property unmortgageable.

How are you planning to fund this?

What should my first step be, I would like to borrow £50,000 but have no deposit at all to speak off, or any savings. Will I even get a mortgage?

Deposit 10% = £5,000
Solicitor = £600ish
Survey = £400ish
Product fee = £999ish

I'd say you need £7k, preferably more, to achieve this.

_Andy_

Also bear in mind that building/decorating/renovation work will always cost more than you think.
You haven't got any savings so this isn't at all viable at the moment.

steevs28

Most of the houses I have looked at that in the price range need stuff like plastering done, my dad is pretty handy at all stuff like that so would hope that he could do most of the work for me.

Are there any lenders at all who will give me a mortgage with no deposit?

_Andy_

No, as has already been stated, you won't get a mortgage with no deposit.

Orlando_Virgin

steevs28 wrote: »

Most of the houses I have looked at that in the price range need stuff like plastering done, my dad is pretty handy at all stuff like that so would hope that he could do most of the work for me.

Are there any lenders at all who will give me a mortgage with no deposit?

As a fellow first time buyer I've seen a few mortgage brokers and they are all offering the same kinds of deals really. Very few may be interested with a 5% deposit, but probably not and with a 5 year very high fixed interest rate.

There are several 10% deposit mortgages around that are slightly better interest wise, but you're still looking at 6-7% interest rates over 5 years. To be honest, its pretty harsh times at the moment and for obvious reasons, the better mortgages go to the people with 25% or higher deposits to put down. Unfortunately unless you're an excellent saver or have some sort of inheritance its highly unlikely you're going to have that kind of money.

In short, there really isn't any kind of dream solution out there for first time buyers at the moment, its either a large deposit or high interest rates over a long period, but thems the breaks I think. That's only what I've got from my very brief experience so far but for what it's worth there it is.

AliceBanned

Hi Steve

I am in a similar position and trying to save enough for a deposit by the end of the year - I can't bear the thought of not buying soon/whilst prices have dropped when it was impossible for me before. If you have no dependents and you could make cuts somewhere could you put aside some money each month?

These are the things I am trying:

opened account with local credit union to save (as they may also lend to me after a few months of saving with them, to help me pay the costs of buying a flat - solicitor etc).
Saving £400 per month if I can (my salary is 25k but 3k of that goes on train fares and 1k on a car which I need to get to work as well.
Cut down any "unnecessary" costs; holidays, clothes etc until the end of 2009 at least, possibly until this time in 2010.

The most I have been offered is 75% loan to value and I think that is all that is out there for first time buyers. Even if I don't make enough for a deposit by the end of the year, I'll just keep saving until i can buy, as house prices are unlikely to shoot back up again quickly. Unfortunately we just have to be patient, save and wait...in the long term it will be worth it. There is a lot of advice (and more importantly moral support) on these forums about saving and mortgages, I've really found it helpful as I was trying to buy my first place two years ago and luckily didn't!

Good luck