First Time Buyer - Mortgage Advice Please

gpbrown83

Hello,

My girlfriend and I have recently found a property that we are highly interested in and keen to buy.

The house was originally up at £162,000 and has been on the market for 18 months. The house is currently priced at £135,000.

I understand that with the current climate - a 10% deposit is an absolute minimum, however we only have a 7.5% deposit at that value. I have been using various sites to determine the best mortgage deals etc... and it looks like the best rates are available when a 20% deposit or greater is available, but unfortunately we are not in that position.

What we would like to know are what are our options really? Given the fact that the couple who are selling have already come down on their original price by £27,000:

• Is there much chance of negotiating a lower price?
• Are vendor gifted deposit options available with the current state of the market?
• Can we opt for some sort of vendor gifted deposit option - say we deposit 7.5%, and they deposit 7.5% in an effort to achieve a slightly more comfortable interest rate?
• Where should first time buyers be looking for a reasonable mortgage deal, including vendor gifted deposit options?

Any advice that can be offered is appreciated - thanks for taking the time to read my post.

Regards,

Gordon.

beecher

My only advice would be to keep saving - you'll find another property once you have a 10% deposit, plus all the money you need for associated fees.

opinions4u

gpbrown83 wrote: »

The house was originally up at £162,000 and has been on the market for 18 months. The house is currently priced at £135,000.

A big question here is why? Is this because the vendor is being realistic in the current market, or is it because there's something wrong with it? You are cash poor, so don't appear to be in a position where you can move in to a property and start spending thousands of pounds correcting faults with it.

Is there much chance of negotiating a lower price?

I would start your negotiations at 10% or more below the asking price in the current market. Testing the water with a wild offer perhaps! But look, if you knock £10,000 off the asking price, you only knock £1,000 off the required deposit.

Are vendor gifted deposit options available with the current state of the market?

Yes, but these have to be declared up front to the lender and valuer. You could find that you incur fees and the valuer turns round and says it's worth the official purchase price minus the vendor deposit. If this happens you're back to stage one and out of pocket.

Can we opt for some sort of vendor gifted deposit option - say we deposit 7.5%, and they deposit 7.5% in an effort to achieve a slightly more comfortable interest rate?

Depends on the lender. My view is anything over 5% is taking the mick.

Where should first time buyers be looking for a reasonable mortgage deal, including vendor gifted deposit options?

A reputable, local whole of market adviser may be best. Don't forget sites like www.moneyfacts.co.uk to compare deals.

Personally I think you need to get saving more or take the begging bowl round to Granny! The housing market isn't going to leap significantly in value in the next few months (imho) and other "dream houses" will appear with 'for sale' boards on them.

Deposit - 10%
Product Fee - possibly £999
Valuation - £500ish
Solicitors - £600ish

Figures above are approximate, but you need to go in to a housing transaction with your eyes wide open. Price up the cheap furniture in Argos and you probably want to add another couple of thousand on as well!!