Advice needed please.

Ralphy101

Hi

I am looking for a bit of advice.

I currently co-habit with my partner, we pay for a one bedroom flat privately.

Howver within the past month we have found out that we are expecting a baby next march.

Obviously, re-assessing my priories, it would be nice to have a 2 bedroom house nothing flash, but just about big enough for the 3 of us.

I want a mortgage, as oppossed to renting, however I have not saved for a depoist.

Does anybody out there have any tip?

1) Does 100% mortgages still exsist? if so are they a good idea?
2) Someone once told me about deals regarding newly built homes? for first time buyers?

Since I am new to this, I find myself getting confused.

A few wise words would be nice.

Thank you.

Ephemera

Firstly, find out if you can afford a mortgage on one income alone in the area you want to live.
Bear in mind that interest rates WILL GO UP. By how much is anyone's guess, I'd be looking to check you can afford at least an 8% rate.
Children cost money - if you have family with youngsters they may have secondhand equipment and clothes to help you drive down the cost.

Unfortunately in the current economic climate nobody knows what will happen to house prices in the next couple of years. Lenders are being VERY cautious about lending, and with a child on the way you will need to be cautious about borrowing, too.

Is renting not an option at all? Can your local housing association / council not help? At least as a tenant you are more likely to get financial help if you found yourself out of work - as a mortgagee you will most likely receive very little help - and with more and more people on benefits and correspondingly fewer in work the tax burden for the 'haves' is likely to continue to go up. Think very carefully!!

Owning a home isn't the be-all and end-all. I've got a hefty deposit for a house and would like to have a family with my partner too, but we are holding off at the moment to see what happens in the next year or so.

If you had a large deposit and could comfortably manage then I'd be saying go for it if it feels right, but in your case I would be seriously looking at council / HA as the risk of losing your home is much lower.

Sorry if my opinion (and it's only my opinion!!) seems a bit muted, you really do need to consider a lot of things. You will have to maintain your home, pay the mortgage, council tax, etc, etc, and it can be really expensive. If you have not saved any money whilst cohabiting in a small flat then, realistically, can you really afford a two bedroom house and a baby?

It's no bad thing to rent if that's the right thing financially for you to do.

Hope that helps!!

Cannon_Fodder

http://www.lovemoney.com/news/mortgages/the-death-of-the-100-mortgage-1587.aspx

"In February 2008, thirteen different mortgage lenders offered 100% home loans. Today, these loans have died out." - July 2008.


If you shop around at new builds, you may find a gifted deposit being offered. This is where the developer keeps the price high and gives you some of it as the deposit, rather than dropping the price so everyone can see the true value...trouble is only certain lenders accept gifted deposits.

I don't think they would go higher than a 5% gifted deposit. You will really need to find the other 5% for even an expensive mortgage rate. A 15% or 20% total deposit would get you a cheaper monthly mortgage repayment.

By the time you add on solicitors fees etc, it may not be the best time to take on a mortgage, if you have never managed to save a penny - before having an extra mouth to feed...

Tip - save hard for 8 months. Whether you buy or rent, you will need the money.

Ephemera

Oh...and...congrats...!

I'll agree with Cannon Fodder. Save, save, save. You'll be amazed what you can put away when you put your mind to it, almost as amazed as you will be by how much money babies can cost... although they don't have to if you're savvy. Check out the Old Style boards!

All the best!

Mrs_Bumble

Congratulations!

I agree with all the above comments, save, save, save and assess your priorities once the little one is here, you might find that you don't want to go straight back to work and in that respect having a rent to pay would be easier as you can apply for assistance, so such help with mortgage payments.

Ralphy101

Cheers Guys

It's not like I cant afford to save, it's just that foolishly, we've always opted to spend spend spend and enjoy ourselves.

Obviously that's all about to change!.

Thanks for your help!

Mrs_Bumble

Well at least you will be able to say that you have spent, spent, spent and enjoyed yourselves!

Put together a saving structure and see what you can get yourself saved and then reassess after little one arrives next year, would be a shame not to enjoy the baby while still a baby if you can. I have 4! they grow up to fast and best advice is to enjoy them as much as you can while they are little because teenagers tend not to like you very much, unless you have cash of course!