New to this - first time advice required

firehawk_2

After having a really tough financial year last year due to the recession, I beleive and hope this year will be better as I am getting more and more work from clients.

I believe im at a time in my life where I need a place of my own - my own house.

having no knowledge about the process, proceedings or anything i would like and appreciate some advice from people here.

how much do I need for a deposit?
how much is paid on a monthly basis to buy the house after the deposit?
what should first time buyers look out for and watch for?

im not rich.... but just would like to have a house!

how much to places normally cost? im looking around 200K and under.

thank-you!

MrsManda

Hi, I don't know much but just to get you started:
Deposit: the lower the Loan to Value (LTV) the better the deal you'll be able to get on your mortgage. Most places don't seem to do 100% mortgages anymore so you are probably looking at a minimum of a 10% deposit.

Monthly basis - not sure what you are looking for to answer this.
You'll be paying your mortgage each month
You will also have bills for water, electric, gas (if you have gas), TV licence, telephone, internet, buildings and contents insurance, council tax, though whether you pay monthly, quarterly or yearly for these things is up to you.
How much each of these things are depends on the property, how much you use and the deals you sign up for.

How much everything costs really depends on what you want and where you are looking to buy.

firehawk_2

true. thanks Mrs Manda!. I know about the TV license, telephone/internet/electric/council tax so thats not a problem.

10% is what I thought for a deposit, obviously need 2x that amount to cover my back just in case if I have problems finding more work (I am an IT contractor/freelancer).

hmm. so its 10% of the value of the house?

looks like I hope to get solid work for 3 years to make that amount + extra! lol.

House_owner

£200k seems a lot for a first time buyer house, why don't you look at something cheaper just to get yourself on the 'housing ladder' and then it won't take you so long to save up for a deposit - or are house prices extra high in your area?

firehawk_2

it was just an estimate I guess. I dont even know where to look in terms of location just yet. I am hoping to move to the states but no idea how long and if that plan will happen so thought may as well see whats "out there" over here in terms of properties.

living in a 1 bedroom spacious apartment is nice but id rather have more room and more bedrooms too!

Raggs_2

If you are self employed you'll need to have good accounts too. It will need to be seen that you are earning enough to cover the mortgage. For a 90% ltv on 200k, you'll need to be earning around 45-50k a year. Multiples vary around 3.5-4x to my knowledge.

So this could been getting your accountant to stop putting so much on expenses, and take a bit of a tax hit for a few years so that your accounts look nice to the bank.

firehawk_2

sure.

well i dont have much expenses at all, and the books are good AFAIK.

as I get different contracts, the wage can vary but sufficient enough. I save about £1500/month after my bills and rent are paid normally.

Raggs_2

It's important that that is shown as profit/wages though, as opposed to putting a lot of everyday costs as expenses, keeping your wage/profit low to avoid taxes.

If you can save that much a month you should be able to save 45k in 3 years, with some extra for expenses, this will mean you could have access to some far better mortgage deals.

firehawk_2

thanks. well, things can go up and down, again depends when I get work next and what the rate is for the work (wage) etc...

i just want to be able to get a decent mortgage and not have to pay "alot", but spread over a good few years rather than saving a LARGE sum for a deposit as that is almost impossible since I pay rent also, along with other bills

Annisele

firehawk wrote: »

I save about £1500/month after my bills and rent are paid normally.

i just want to be able to get a decent mortgage and not have to pay "alot", but spread over a good few years rather than saving a LARGE sum for a deposit as that is almost impossible since I pay rent also, along with other bills.

If you save £1500 a month, I don't quite see why saving a large deposit is a problem.