First Time Buyer - Need some advice please

antonio_king

Morning all,

First off, let me start by telling you my situation.

I'm 19 years old, earn 12500 a year in a secure job. I have no money for a deposit and I want to buy the council house I've lived in with my single parent mother for 18 years.

Buying the house seems an opportunity not to miss as the discount we would receive is immense due to the time we've rented from the council.

Currently I have no idea what price they would ask for the property but I know it would be in the vicinity of 60 to 100k.
(I've checked that free website on houses sold prices, and the houses in our area are currently going between 150 and 300k)

First question is, how difficult will it be for myself to find a mortgage of this amount?

Second question is, I understand having a deposit would decrease my interest on the mortgage, can I take out a loan and use it as a deposit?

Your help is greatly appreciated, thanks!

jamminjamaica

i would not take out a loan for a deposit as it would probably at a rate higher than the mortgage. first you need to find out what they will let you purchase the house for. then you need to find a good all of the market mortgage broker who will be able to give you advise regarding how much you can borrow and what type of mortgage is best for you.


will it only be you paying the mortgage?

hope it all works out for you.

antonio_king

Ideally it would only be myself, but if needed I could get a joint mortgage with my mother.

UK007BullDog

Because of your age you might probably require your mom to be part of the mortgage or act as a guarantor. Most lenders want their FTB to be at least 21 years old. However if the deal is made tasty to the lender they might lower it.

The rebate you are getting will be offset against the actual value, i.e. the council will sell the house to you for £60K and is worth £100K on the open market. The £40K will be your equity/deposit (which is good for you as the lower the percentage the lower the interest rates the easier to get a mortgage).

Look for a whole of market broker.

As the mortgage is quite small you might find that some brokers are not interested to deal with you as a Right to Buy takes long and the commissions are low too. So they might charge you. Personally I would pay a small fee to get the best deal available. (probably will get flames for saying this) ;-)

If it is a concrete house, or a flat with shared balcony access and higher than 4th floor, you might have a problem though, if it is not go for it!