best mortgage for first time buyer

aliceelizabeths

I am sure this sort of topic has been posted a gazzilion times before but I'm lost, lost and confused and 22 years old and evidently stupider than I thought as I can hardly get my head around the concept.

we are a couple, engaged, both earning a fair wage but in the low 20, 000's

we have a deposit of approx 20,000 and want to find somewhere at 200,000 or below- so that's 10% I suppose??

what is the best mortage out there for us??

Fire_Fox

Do you also have money saved for solicitors fees, removal costs, valuation and survey, the little surprise repairs or improvements when you move in, a float to pay the mortgage if one of you falls ill/ gets made redundant/ gets pregnant unexpectedly?

Which mortgage completely depends on your individual circumstances, you need to do a lot of reading and get your head around the different types. Have you read the mortgage article on the main MSE site and the FTB sticky on the first page of this board? Some people want a low tracker style, taking the risk that interest rates will rise (they will, they are incredibly low at present), others prefer the security of a fixed rate and are willing to pay a higher rate now. Have you seem a mortgage broker yet or been to your own bank to get a mortgage in principle so you know how much you can borrow?

Sp3no

As a FTB myself and currently going through the motions of buying a property i would say you will not get a morgage with just 10% to get an OK rate you need 20% (5-7ish% interest) for the best rates you need 25% (4-5%) Plus you need to decide if you would want a fixed rate, variable or tracker. The interest rate will differ. Fixed will be a higher rate so larger payments but your safe in the knowledge you know what you paying. Variable and Tracker is the cheaper option but who knows whats going to happen, you payments could change many times a years, the payments will not be going down with such a low base rate so the WILL go up

You should be looking at houses under 120K to have a deposit around 20% and get a decent rate. Looking at properties just under 200K is not an option

lumscx

We are in a similar situation. FTB, joint salary 53K + non guarentee bonus (0-5K per year), 40K deposit... looking for a property in London for around 220-240K...

Is not possible to get a 200K mortgage for 85% LTV? We're renting at £1200 and also saving £1200 per month and I think we could afford paying £1200 - £1800 per month for mortgage?

I have a quite good credit score. callcredit / equifax 8XX score. My wife has an average credit score. The only problem with us is that we are work permit holders and don't have the electrol roll registered.

Sp3no wrote: »

As a FTB myself and currently going through the motions of buying a property i would say you will not get a morgage with just 10% to get an OK rate you need 20% (5-7ish% interest) for the best rates you need 25% (4-5%) Plus you need to decide if you would want a fixed rate, variable or tracker. The interest rate will differ. Fixed will be a higher rate so larger payments but your safe in the knowledge you know what you paying. Variable and Tracker is the cheaper option but who knows whats going to happen, you payments could change many times a years, the payments will not be going down with such a low base rate so the WILL go up

You should be looking at houses under 120K to have a deposit around 20% and get a decent rate. Looking at properties just under 200K is not an option

laughingcow81

You definitely need to do some reading around. You should speak to a whole of the market mortgage broker to see how much you can borrow, or even look on the internet for a mortgage calculator to see a rough idea.

Then you need to read up on different types of mortgages (as firefox mentioned) to decide what type you want to go for.

The best course of action is to do as much research as possible.

kinglewis

http://www.fsa.gov.uk/tables/bespoke/Mortgages

Good place to start although it won't include every single lender like an IFA can.

pie81

You should probably speak to an independent whole of market fee free broker. They can give you advice on fixed deals, tracker deals, how much of a better rate you could get with a bigger deposit, how much your monthly payments would be, etc.

I've used the broker London & Country in the past and found them helpful though no doubt it depends on the individual person you get.

Once you've spoken to the broker, always double check the mortgage lenders' sites as sometimes there are better deals that aren't available through brokers but only directly through the lender.

TrickyDicky

For mortgages it depends if you want a garanteed monthly payment (fixed) or lower rates that can get higher (tracker, variable rate). At the moment 90% LTV mortgages are at around 6% for fixed rate and 4.5-5% for trackers.

on a 180k mortgage repayed over 25 years, your initial payments would be £1160/month at 6% and £1050 at 5%.

I assume this will probably be somewhere between one third to one half of your take home pay before bills and any other spending

EagerLearner

hi Alice I have literally finished going through the same maze you are about to, and as others have said, it's best to have a whole of market advisor who can guide you through. If you want pm me and I can thoroughly recommend the one we used/are using, very helpful throughout our 11 month search and responds often within minutes to e-mails.
For us we went with Northern Rock and a fixed 2 year deal that allows us to overpay from as little as £1, with no Higher Lending Charges (a sneaky charge imposed by the bank hidden in the mortgage, is about as much as I remember as to what HLC means!)
Good luck with it and allow say £900 for mortage fees and then say £1200 for legal plus money for moving etc...

aliceelizabeths

thank you for the host of replys! I wasn't expecting so many, more of a 'here we go again topic', I will do some of the reccomended reading and return