Looking to Buy for the first time- advice needed!

penguine

VBlake wrote: »

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.

This is a common belief about renting, that it's just "money down the drain". First of all, it's paying for a roof over your head, and a nearly commitment-free one at that, so it's not wasted money.

Secondly, if you buy a flat and prices fall further in your area (and new builds are particularly likely to fall in price) then it's your money that will be going down the drain.

superfran_uk

Don't do it! You're 24, what happens when next year you meet the man of your dreams, you marry at 27, and at 29 you decide to have a kid, but find you can't afford to move to a bigger place because your flat lost upwards of 20% of it's value the moment you stepped in and it became second hand!

If you cannot afford to rent, how do you think you can pay the mortgage, the life insurance and buildings insurance that you must get along with it, as well as all the bills? Remember if you don't pay your rent, you might get thrown out after a notice period, if you don't pay your mortgage, you will have your house reposessed!

Also I don't know whether you have considered the fees and costs associated with moving. Although you're unlikely to pass the stamp duty threshold, you will certainly need to pay for the survey, solicitor's fees, searches, transfer fees, mortgage application fees, and all prior to complettion. This could run into several thousand pounds (I would say at least £2500 at a conservative estimate. Our fees including SDLT have been just shy of £5k...so far!) which you need to find on top of your deposit.

But I don't really think we should all worry on your behalf as I am sorry to say that on your wages as a single person you will categorically not get a mortgage in this economic climate. Give it a little time. When I came out of uni, I was living with my parents and I had a string of crappy temp jobs, but I kept at it and now I am on a decent graduate wage and ready to financially commit to a mortgage on a house that I won't outgrow for several years. You will get there, just be patient!

VBlake_2

Thanks again to those have replied. I have 2 meetings in next few days with 2 banks, one with HSBC - who I have a graduate account and have read they offer some good deals for their graduates. Also with Halifax who I am a customer with and have seen on their website who do mortgages up to 90%. I have also spoken to a mortgage broker who says I will be able to get between 40000 and 50000 grand.

I know I have only 2% deposit at the moment and I am not planning to buy now, (sooner the better), but I am hoping to get 10% by Jan/Feb time which is when the new flats will be built. It also gives me time to see how houses prices do and what is happening in the financial world.

Superfran_Uk - I know Im not going to have meet the man of my dreams within the next yr- havent had any luck so far, lol. I want to concentrate on career first and Olympics are only 3 yrs away so need to get some more experience before then.

Fire_Fox

VBlake wrote: »

Hi
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.

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.

When you purchase a flat it doesn't include energy bills and TV license. Assuming it's a leasehold flat, your service charge covers the electricity supply to the communal areas and maintenance of the building and communal areas only. It's common practice for developers to set the service charge low to attract buyers and then hike it up as soon as all the flats have sold.

You cannot afford to buy or rent a flat - if you move out of your parents you will need a house share or flat share. I own my flat outright so I know exactly how much it costs, I don't run a car as there is no way I can afford both on a low income. Even if you can get a mortgage, when interest rates rise you will be in the proverbial.

Save up 10% to 15% of the purchase price of your chosen property and find out if you can make a success of your sports massage idea. I suspect it won't provide your with anything more than pocket money once you take income tax and travel time into consideration (I work in the fitness industry). If you want to write off costs such as advertising and CPD you will need to set up as a small business, have you done this yet?

Fill this in with your predicted costs; anything annual such as Christmas divide by twelve:
http://www.makesenseofcards.com/soacalc.html

Jonbvn

Lots of good responses to the OP. I think when the OP discusses their options with the bank she will fully understand that buying now is impossible.

AFAIK, no bank is currently willing to lend on a NB flat with more than 75% LTV.

Finally the statement that rent money is dead money is a complete fallacy foisted on the masses by property !!!!!! TV programs. Mortgage interest qualifies as being equally "dead" but nobody mentions this??

The only realistic option is to mend fences and save like mad!

charliee_3

i agree.. the OP salary is so low, with a take-home of £712 a month, there is no way she would be able to buy or even rent on her own.. if she did, after all the bills had been paid she would have no life, living on baked beans and economy bread sitting at home in her unsellable rabbit hutch listening to the neighbours farting!!
mend bridges wth your parents, stay there, save every penny you can for the 2 years till they sell up and maybe if they see you are serious about buying they will use some of the profits from their house (assuming they will have some) to help you with a good deposit... or maybe the place they want to buy here to stay in when they visit- you can live in it and look after it for them, so you will have the best of both worlds- security and freedom for the parts of the year they are in spain.

if you are desperate to strike out on your own find a house or flatshare.. renting isnt money down the drain, it is a realistic option for people who shouldnt buy.. it gives you a roof over your head and your costs are pretty much stable so you can budget...what is wrong with that??

i really hope the bank are as prudent as they should be and she doesnt get hoodwinked by some overzealous sales person who is just after a commision...