FTB - deposit questions

JonSimmonds

Me and my girlfriend have been doing the chat on "getting our own place"

my question is whats the current "normal deposit" these days for a FTB, prob looking to buy something way at the bottom end of the market, im renting a flat, she is with her parents, between us we have around 10k in savings to date

would saving for a higher deposit, give us cheeper intrest over the mortage, thus saving us money in the long run? or is it best to go for it ASAP?

Ian_W

Hi Jon,
First thing is getting your own place together doesn't have to mean buying, you could try it out by renting together. Whilst the old saying, two can live as cheaply as one, isn't strictly true it might be possible to save more for a deposit if you were sharing rent and outgoings. Buying together involves legal commitments to the property and mortgage that can be costly to get out of,so only do it if you're both happy you're in a lasting relationship.
"Normal deposit" would be 5% minimum but it would depend on prices where you live and what type of property you want, as to whether your £10K would be more than enough or merely scratching the surface. Your combined earnings would dictate how much you can borrow, as will your credit rating and any debts you owe. You can work on 3 to 4x your earnings less cc debts or loans as being about the norm but lenders work these out different ways. You can get 100% mortgages but avoid these if you can as the interest rates and risks if house prices don't rise can bite you in the bum!
A good starting point to check property prices where you live or want to live is https://www.rightmove.co.uk and then use the mortgage section of the site and the links to put your own figures through and see how them come out.
Don't forget you will have legal costs, possibly stamp duty, mortgage arr fees & removal costs to come out of your £10K as well as the deposit.
HTH & BoL to you and your g/f.

JonSimmonds

Thanks for the reply

Im quite sure the not to distant future is the right time to buy, most of the time i am at her place, or she is at mine, and I am quite sure she is " the one" and vica versa

My only debt is the good old student loan, as well as credit agrements with orange and ntl for their services.

I thought it was a case of 3* the main sallery +1 of the lower one, or has that changed?

I am so trying to avoide the 100% morgate, after seeing a advert for HSBC saying "yeah we can do 100% but for more intrest" and "we can arange mortages for groups of friends, for more intrest" so its obvious why they are advertising that

Im hoping that we can find a property for under 125 so avoide the stamp dutey, removal costs will be zero as we know a few people with vans etc, what are the "typical mortgate fees"

Thanks

herbiesjp

5% is good 10% is better.

At 95% ledning most lenders will charge a higher lending charge fee which you can pay up front or have added to the loan.

A few lenders do not charge this HLC, but charge a slightly higher rate to compensate - however I would suggest that number crunching normally shows that taking the higher rate works out more cost effective for you.