New mortgage/First TIme Buyer Confusion

Dicky2K

Morning All. Hope everyone is well on this fine wet morning..

Advice please .. well .. help anyway

I'm living in rented accomodation at the moment, and have recently been thinking about trying to get myself on the ol' 'ladder' as to speak..

only problem i have is i havn't got a bloody clue where to start..

I really am clueless as to what i have to do to even start thinking about buying/building or whatever.
Are there any good schemes to help first time buyers..?
What kind of Mortgage should i be able to get? (And what on earth are they.. lol..)
How much should i be able to get in comparrison to my salary..?

I have been told to speak to the bank to find out how much i should actually be able to get before i even start looking, but how much of a deposit should i expect to need..?

I'm sorry to seem like a bit of a moron, but to be honest, i am..

I'll appreciate any helpful advice.., so many thanks to you all in advance.

Good day

TrickyDicky

You need at least a 10% deposit to be able to shop around (95% LTV mortgages are very rare) but even at 10% expect to pay around 5-6% interest on the money you borrow. Deposits really have to come from savings - lenders wont let you use a loan from anyone as a deposit (including parents). Then as a rule you can normally borrow about 4x your pre-tax income as a mortgage. If you have any significant debts its much better to pay them off before trying to save anything (the mortgage company can see all your debts and will probably require you to pay them off before releasin g the mortgage anyway)

On top of this, you'll need solicitors fees (up to £1000), survey fee (~£300-400) moving costs (depends what you have) plus any stamp duty (if the house is sold for more than £125k)

Best thing to do is get on right move in your area and see how much properties are advertised for - this should give you some idea of what you can buy.

Dicky2K

The kind of thing i've been looking at in my area for a 2/3 semi det are showing between 135-160K ish.. I have got about 7K at the moment, unfortunately not as savings.. I've Just bought a car that i dont need .... silly mistake, so the cars being sold again to make way for a deposit

TrickyDicky

Then you'll probably need at least 15k saved before you can buy. I also forgot to mention that the 10% you need saved is 10% of what the bank says its worth, not what you offer. Its happening sometimes at the moment that banks are valuing houses less than the offer made, so the buyers either have to renegotiate the offer, make up the shortfall with savings or just walk away.

Dicky2K

ok, Well, thanks for the advice, So basicaly, the best bet now is to scrimp and save for a bit to get a deposit and take things from there?
Luckily the way things stand at the moment i'm able to save the best part of a thousand pound a month.. and its not exaclty my cup of tea, but we've got the offer of a room in the mother in laws for a few months, so that'll save another grand a month from bills in my house..

fleenio

The best thing I done when I was considering a mortgage was to speak to a mortgage broker (free advice).

phildamb

Give London and Country a call (mentioned in the mortgages help section on the site)...I spoke to them today they seem very competent and friendly and most of all are FREE