Looking to Buy for the first time- advice needed!

VBlake_2

Im 24 female, currently living with parents. My 2 brothers live at home, although 1 is off to uni september. We have a 6 Bedroom house but after a very large argument last wed, I want to move out. I did live away for 3 yrs while in uni and didnt want to move back home, but had no other option.

I have been working part time for the past year, but will be going full time at the of June. My salary will not be huge about 800 pounds a month before tax etc. I also am recently self employed as a Sports and massage therapist, at the moment its only word of mouth, but will be advertising, also at the end of June so will get some extra income from that.

I have looked at renting but as I am on my own I find it too expensive, also I feel that renting is money down the drain. I have looked into sharing with someone but again I know I would feel uncomfortable with some stranger. So I feel buying is my only option at the moment.

I have seen somewhere I like, its 1 bedroom flat by Redrow called Debut, a new build priced 57000 and 65000 (depending on the size). I have had a look at the flats and they are fairly small but would be ideal for me, as I would be out most of the day and I did live in one room for 3 years so I think Ill be able to manage.
I have read threads on these forums,I know what some people have been saying about not to going for New builds, but here is my reasoning. I live in South Wales and the town is a very popular and is hard to buy into, also its very expensive. The place I would like to buy is a ten minute drive away and in a fairly decent area and I think the price is resonable for a first time home, if I was to get anywhere that cheap in South Wales, I would have to go to the rough valley areas of South Wales, which I have never been to plus it will add an extra half hr to my work time, which now takes 20 mins.

At the moment I only have a small deposit about 2% which is saving I have occured. I know I will need a bigger deposit which will become even bigger as the more money starts to come in. The only debts I have is my student overdraft which I am paying off 50 a month which is now 600 pounds, I also have a student loan which im not paying off at the moment due to be not earning over 15000 pounds.
The only outgoing I have a month is about 200 a month which includes car,phone etc.
I am going to speak to my banks tomorrow to find what they can do for me as well as a mortgage broker. I realise that the likely hood of me getting a mortgage is slim, but I want to find out how much deposit I really need etc.
Sorry for the rant but my question is anyone got any advice for me, what I should do?

Also redrow do an easi buy option which pays for ten percent of the property which i have to pay back after ten years or when I sell the property interest free. Also I have read up on the own home scheme where they pay so much towards the property which is then paid back over so many years. I feel that I could not buy the property without one of these schemes, but which would be best.

I have so many questions but I feel that is enough for now, My apologies for the rant. Thanks to everyone who replies, will keep you in formed about the banks and mortgage broker.

Vickie

penguine

I have looked at renting but as I am on my own I find it too expensive, also I feel that renting is money down the drain. I have looked into sharing with someone but again I know I would feel uncomfortable with some stranger. So I feel buying is my only option at the moment.

If you consider renting too expensive, then buying is not a good option for you at the moment. If anything goes wrong with the property, you will have to find the money to fix it. If you are renting it's the landlord's responsibility.

At the moment interest rates are very high unless you have at least a 25% deposit. This is because lenders are protecting themselves against the possibility of further price falls in the property market.

As you currently only have a 2% deposit, you are unlikely to be in a realistic position to buy for several more years. If you find the idea of continuing to live at home for that long too difficult to contemplate, then you should explore your rental options further.

HellsGranny

I think you will struggle to get a mortgage, plus you will have to budget for Council Tax, Water Rates, Gas and Electricity, as well as a telephone. If you intend to have a TV, there is also the cost of the licence. If you need to run a car, that is still further expense, and you may well find, when costing everything up, that you have nothing left for food, entertainment, holidays, clothing, etc.

Have you thought of the costs of setting up a home from scratch? It's not cheap to get yourself a fridge and cooker, let alone a washing machine, or the extra costs of maintaining these things when they break down. You will also be responsible for paying out for your own repairs should the roof leak, the boiler fail, or any other problem which may occur.

It may be a dream, but the reality could become a nightmare. I suggest you mend fences with your family and save like crazy for a few more years.

Cheers, Hell's Granny

~Beanie~

VBlake wrote: »

I have seen somewhere I like, its 1 bedroom flat by Redrow called Debut, a new build priced 57000 and 65000 (depending on the size). I have had a look at the flats and they are fairly small but would be ideal for me, as I would be out most of the day and I did live in one room for 3 years so I think Ill be able to manage.

Redrow have a development selling these flats at the end of my street. They have been there about 2 years now and I've never seen so many up for sale! They sold well intially but now everyone is looking to sell up and move on.

The main issues seem to be the size - I've seen bigger rabbit hutches, if there wasn't a wall between the bed and the "living room/kitchen" then it would be a bedsit, hope you don't want to invite anyone round; and the noise - apparently the walls are so thin you can 'hear the bloke next door having a wash'.. as one person I know put it.

There are now lots of them up for sale and not many seem to be selling, the ones that do are for less than the original purchase price.

I definately think you should grin and bear it where you are and save like crazy. Get another job if necessary in order to get a bigger deposit and to increase your salary to enable you to get/afford a bigger mortgage.

chewmylegoff

your low income and lack of savings mean that you can't afford to buy, unfortunately.

you'll need to build up your savings, and earn more money.

Dinah93

Have you considered the resale value? The reason these are so cheap is no one wants to live in them they're so tiny.

Also, I calculate full time employment on minimum wage to be £893 a month, so some sums would say
£11 tv licence
£75 council tax (band A, single person discount)
£100 food
£35 water
£45 elec (over a year, assuming no gas so only source of heating)
£200 (existing car phone etc, although this seems low to cover insurance, repairs, mot, service, phone, and petrol)
£20 contents and house insurance
£20 life insurance
£50 OD payment

That leaves just £376 on my calculation of minimum wage, or £283 on yours (both before tax so it's going to be at least £100 less than this!) to pay a mortgage and any costs like going out, socalising, trips, holidays and presents. This is no room for contingency at all, personally I don't think it's do able at all.

Added to the fact 90% mortgages (you're still 8% shy) are very high interest rates, you need to get realistic on this one I'm afraid and if you want to move out you're going to have to house share.

suisidevw

agree with all of the above. Swerve until you build up your deposit!

Where about are we talking in S Wales, just buying there as FTB'er as well.........

VBlake_2

Hi

Thanks to all to those who have replied so far, and I kinda guess what you would say.

The water, gas, elec, tv and maintenance are about 100 pounds a month, and that will be standard. The property already comes with an over, cooker, carpets etc. We have a spare fridge, and sofa at home which I could use. I know I will have to get a washing machine but that would wait for now, I can use parents if need to.

Also, My parents are moving to Spain in 2 years so will sell current home and will buy a small place here to come back too, which they could use the flat if a) if ive moved on or b) use it while im still there. Also my bro would like to move back to the area once uni has finished to be with his partner or I could let it out. It would be a long term investment even if I don't live there, the whole time.

Renting in the area is no cheaper that 395 a month for a one bedroom flat, and that place was tiny, you would be talking about nearly 500 to get a decent sized place. As I said, I feel renting is a waste of money as its not going anyway only in landlord pocket, at least if I get my own place, the money goes to paying it off.

Im not trying to persuade you otherwise, TBH I don't think I will get a mortgage but Im hoping.

Suisidewv- Im currently in Porthcawl, but Looking at the redrow homes in North Cornelly. Where are you looking?

LittleMissAspie

What about a house share? Even if you could get a mortgage you would have pretty much nothing left over after bills. Nothing for going out, or clothes, or buying lunch, or presents, or holidays. Or emergencies.

Personally I think you should stay at your parents while you get a permanent job going and continue to save, until your parents sell up. Then you will be in a much better position (and hopefully prices will be less too) and you could make a deal with your parents to buy a 2-bed together. So they could give you, say, 10% towards it in return for a place to stay whenever they come back to the UK.

suisidevw

Had offer accepted on a property in Rhiwbina, Cardiff. Dropped 15% deposit on it and it's still not a 'given' so with 2% you could be in serious trouble. All the best though!

It may be in the landlords pocket but if you hold off a year the price may well have gone down of hte property and you're deposit will be up and maybe more mortgage availability. Good lucky anyway

snowjoe

Almost two years ago I wanted to move out of home after returning from uni.I am of a similar age to you. I had a long term girlfriend and decided we would move in together. We always thought that renting was a waste of money and the only option would be to buy. Fortunately our parents were willing to help raise a deposit however the right property never came up and we opted to rent as it felt like too big a risk This was July 2007.

The more that time has past the better that decision has looked. We didn't have the income to deal with the risk that come with owning a home, we have had few things go wrong, washing machine breaking down, a leaking shower, and we able to have these fixed cost free. We are annoyed that we have effectively been paying of someone else mortgage however we know there flat has decreased in value by at least the same amount if not more.

We have also learnt to live with one another and now feel able after gaining better secure jobs (both in education) to buy our first house. We are looking in the same area as our rental property as we have found it ideal for us. We have also grown savy to the property market and feel much more informed when speaking to EA, mortgage brokers, soliciters.

I would strongly reccommend renting first, to get to know the area find our if it works for you. Its low risk if things go wrong and your circumstances change, a 6 month lease is nothing compared to a 25 year mortgage.

We found that we didnt really want to be property owners 2 years ago we just wanted the same freedom and independence we had a uni and whilst our rent is expensive £800pcm it has been worth every penny and we feel more financially savy compared to when living with our parents.