First Time Buyer Advice - 25yr old

MD_SANDERS

I need advice on what to do to eventually get my foot on the property ladder.
I am 25 and am earning just under 19k as an IT Technician, I am currently living with my parents but I'm stuck for ideas on what to do next to start making the move onto the property ladder.
Is it possible to start paying into something now so that in a couple of years when I need to move it will make it easier? I would rather not rent a property and instead continue to live at home, so I can go straight into my own home.

Any Suggestions

Thanks

Matt

Heth_2

Start saving for a deposit!

Dodgybloke

Clear any debts too. Maximum mortgate is usually calculated by gross income times 3.5. In your case this would be 19*3.5. If you have say a loan costing you £2000 a year, then that will be taken off your annual income (in this case 17*3.5). So debts seriously affect the size of mortgage you can apply for.

Hope this helps.

PoorDave

Dodgybloke wrote:

Clear any debts too. Maximum mortgate is usually calculated by gross income times 3.5. In your case this would be 19*3.5. If you have say a loan costing you £2000 a year, then that will be taken off your annual income (in this case 17*3.5). So debts seriously affect the size of mortgage you can apply for.

Hope this helps.

Although these days you can get more. I got 4.05x single income on my first house, although i did have a 10% deposit.

If you want to stay living near home, look up prices for say a 1 bed house flat. Are these within about 80-90k? This would be roughly how much you would have with a 10% deposit and borrowing at 4x salary.

If not, other options would be buying with friends, buying with your parents listed on the mortgage. Both of these would (i think) be likely to get you a bigger mortgage.

I keep hearing of being able to get 5x salary in some cases, but not sure how often this level is offered.

Most important thing would still be to get as big a deposit as you can

stanmoresaver

MD_SANDERS wrote:

I need advice on what to do to eventually get my foot on the property ladder.
I am 25 and am earning just under 19k as an IT Technician, I am currently living with my parents but I'm stuck for ideas on what to do next to start making the move onto the property ladder.
Is it possible to start paying into something now so that in a couple of years when I need to move it will make it easier? I would rather not rent a property and instead continue to live at home, so I can go straight into my own home.

Any Suggestions

Thanks

Matt

I echo the above- start saving for a deposit- know what you need- ideally 10% of the purchase price (not forgetting purchase costs) divide this amount by the number of months you want to wait and that will tell you what you need to save. Pay off debt over the same period as well.

Also- look out for the "mortgage pig" thread- as wacky as it sounds- this thread is brilliantly simple!!!!!!!!!

http://forums.moneysavingexpert.com/showthread.html?t=169247&page=1&pp=10

Hope this helps


SS

MortgageMamma

Its good that you are planning your finances now, ahead of looking for a property, what sort of timescale are you looking to move within? I get the impression you say in a couple of years, is this because you don't have a deposit or would you move sooner if you thought you could?

MD_SANDERS

Yeah, as it is, I've got two years left on paying a car loan and then I'm debt free. Together with the fact I need time to save for a deposit, I was thinking about the timescale of a couple of years.
Which is another reason to stay at home for the time being as it seems foolish to waste money on rent that could go towards a deposit.
As my current rent to my parents is a lot lower than it would be if I moved out.

Thanks

Matt

MortgageMamma

Hi Matt,

Just wondered whether you have considered getting a 100% mortgage where you don't need a deposit? There are one or two competitive ones at present...

stanmoresaver

I would venture to suggest that a two year window to build a deposit and lose the car loan would be an ideal period, if you can wait- I just guess that mum will have to do the ironing for you a little longer

MM is quite correct in that there are some some competative 100% deals, however, they could never compare to a 90% deal, both in terms of rate and fees.

MortgageMamma

quite right stanmore, I want to move back to my mums too so I can afford an x5 but she won't let me

L

Imelda

Hi MD_SANDERS,

A little advice from me, I am 25 too and bought my flat last year. I had a 5% deposit and borrowed 3.5* my salary. I saved the deposit from bonuses from work but never actually budgetted for my new lifestyle. If you have 2 years I would start now, work out how much it's going to cost you in mortgage repayments, council tax, electricity etc (have a look at some SOA's on the DFW board for guidance) and put that aside each month. Therefore you will have a reasonable deposit and a realistic idea about how much it's going to cost you. I wish I had done that and not racked up debt!