Advice needed for 1st time buyers

shanewhittington

Hi all,

My OH and I are starting to look into buying a house for the 1st time. We're earning around 35-40k between us and have about 8k saved for a deposit. We have spoken to an independent broker who was very helpful but he suggested that we wait until we can afford a 15% deposit. We're looking at houses in the region of 100-120k so we're looking at a deposit of 15-18k (I think!) although we have been tole that we only need to come up with 10% ourselves and we can negotiate the other 5% from the vendor I think (is this right?)

I'm getting frustrated though as I'm nearly 25 and don't want to be living at home any more (I just don't want to be told off for having an untidy room anymore!!!) and so I was wondering if every one agrees with the broker and I should wait or can I get a decent house/mortgage with what we have already?

Any and all advice on this greatly appreciated as I'm new to all this and I'm trying to take as much info on board as possible.

Thanks for reading!

Bufger

I would wait until you have enough for a 10% + another 3-5k for the additional fees you will have to pay. Factor things in like 1k for solicitors, 500 for surveys, arrangement fees etc 1k (some mortgages come without arrangement fees).

pinkshoes

A 5% gifted vendor deposit is seen as the property being 5% over priced!

You really need to save up a 15% deposit yourselves, and don't forget you'll also need another £1000 for solicitor fees, plus money for moving costs and furniture.

Then you should also have spare money in your bank to pay for you mortgage for at least 3 months should you lose your job or something, or a boiler blowing up etc...

pjcox2005

Realistically it does sound like you need more of a deposit, at least 10% plus fees etc.

If you don't want to live at home anymore (although I accept its probably the best place to save if you can manage it) then have you thought of renting? After all, even at 4% on a 25 year mortgage, the interest only part would be around £350 p/m for £100k, so renting may not be that much different depending on the area.

tek-monkey

Agreed, I wanted out of my parents house but could not afford to buy. So I rented, unfortuantely 12 years on and I'm still renting, because I couldn't save a deposit! I'm only now in the stages of buying my first place, at 33. If I'd stayed with my mum I think I'd have been able to move by 26 at the latest, but there's no way I'd have had as much fun along the way.

EDIT: Oh yeah, expect £2k of fees for which you appear to get very little. Then there's moving costs, furniture etc. I'd prob want 15% saved up just to put 10% down. Luckily I have all my own furniture due to renting, otherwise it would have been a while longer before I made the jump.

Running_Horse

Assuming you are both living at home for peanuts, you should have that deposit in less than a year. Is that such a hardship?

Dinah93

I'm 24 and me and my fiance have been living with my parents for a year now, and are planning to stay another year to 18 months in order to save our deposit and pay for a wedding. I don't worry that we're getting left behind as the market certainly isn't rising in a hurry, and we don't want to overstretch ourselves.

Have you looked at a mortgage calculator? HSBCs is here. You will need 3k minimum for fees and costs as well as your deposit.

I don't think you will be able to get the figures you want on such a small deposit, so you may have to sit tight and keep saving.

Negotiating 5% from the vendor, this is mental and indicates you are buying an overpriced house. Most banks no longer count gifted deposits anyway. If the house is brand new yes you might get a 5% deposit from the house builder, but again the banks discount these, if it is a used house very few sellers are offering their buyer a 5% deposit so you will severely limit the houses you can look at.

Lotus-eater

You've got to make sacrifices now to have a better life later on. Most of us have had to do it. Go mad and save like crazy for a year, both of you. I mean really save and see where you are in a year.

shanewhittington

Thanks for the advice everyone. I suppose this is what I needed to be told. I feel like it has re-motivated me to keep on saving and so hopefully the houses wont jump up by too much whilst I'm getting the dough together to buy!

Bufger

Shane, the closer you get the harder it is not to spend your dosh! May i suggest you have a look around other parts of this forum for money saving tips that may help you reach your goal earlier.

Stick around though as advice from here really does help you through the house buying process :-)

shanewhittington

I will certainly stick around as I am already finding this site EXTREMELY helpful. I am already picking up a lot of money saving tips and am starting to use my money better. Hopefully this will continue