RE:First time buyer

lindseyh2

Hi

I am sorry I expect you have been asked this question hundreds of times before and I have looked at loads of websites etc and am still confused!!

My boyfriend and myself are looking to buy our first property the beginning of next year, we are low wage earners, I earn £15,012 and get approximate £600 a year in bonus etc at least but this not guaranteed, and he earns £13580 plus £400 a year in bonus not guaranteed again, he also gets £100 a month from his dad

We are no debt whatsoever, I currently live in a rented studio flat and he lives with his parents due to space issues and so we can save money, I save about £300-£400 a month and he saves about £250 so our finances are pretty good

We have been given £25,000 by his grandmother and this should be in place next january and we also have a further £6000 saved and he also has a further £10,000 in savings and isa's

The only problem is, he doesnt have any credit history, because he has never been in debt, lived at home and only had a credit card with his bank 4 years ago, which he paid off

What is best for us to do, I have good credit history apart from a couple of missed payments (1 month at most) 2-3 years ago due to confusion when I moved

Is it best to go through our banks and would we be able to get a reasonable amount for a property?? even though we dont earn alot

Sorry to go on

Thank you for any help

Victoria_Falls

You shouldn't have a problem getting a mortage. Go to your bank to get a mortgage quote only. This will set a bench mark. You should really see an independant mortgage advisor that can scan all the products out there. You have a pretty high deposit so that will stand you in good stead. I suggest you read the mortgage information on the moneysavingexpert main site to get a better idea. see http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml to calculate how much you are likely to be able to borrow.

Doozergirl

You should always see an Independent Mortgage Broker who can search the entire marketplace for you. They will find you the best rate available which will be worth thousands to you in the long term.

There's lots on the mortgage board here and you can find IFAs that deal in mortgages at https://www.unbiased.co.uk. Personal recommendations are best, but ensure that the broker is not only independent, but whole of market.

I got my first mortgage with no real credit history. I remember really panicking at the time, but it was never an issue.

lindseyh2

thank you, I was panicking just a bit!, every one I asked said something different, so just wanted to see what someone who didnt know me thought!,

I dont feel quite so bad now

Thanks again!

Doozergirl

Two replies saying the same thing at the same time isn't a bad result!

Welcome to MSE, by the way :wave:

jamminjamaica

you should be fine. you have a good enough deposit and your salaries are not all that bad. what price house or what size mortgage do you intend to get?

like everyone else has said get yourself a good WHOLE of the market mortgage broker and shop around you do not have to take the first offer given to you. try not let this stress you out.

Sand_Man_2

with such a good deposit, you should have no problems as the banks have security in the fact that you have already put in a good amount of equity in the house.

AndrewSmith

How much is it that you are actually looking to borrow?

Acceptability will always depend on how you fair in a credit score with a lender however much will also depend on the amount you are looking for against the purchase price, employment type and length of service, address history, how you manage your day to day current bank accounts etc.

On your incomes, assuming no other debts, you should be looking at a mortgage of approx £110,000 equating to approx 3.75x your joint income. Assuming a 25 year repayment mortgage and a rate of 5.5% the monthly cost of this would be approx £675.00.

Before the usual brokerbashing begins, yes I know there are lower rates currently available however we are looking at a situation here of 4 months in the future, with possible increases imminent. Also there is no point in understating the possible interest rates as it will only create a very utopian view.

The amount of mortgage suggested at £110,000 is what I would consider a sensible amount based on your income. Yes it is possible to borrow at a higher level, even up to an absolutely ridiculous 4.5x joint income however I always recommend that people stay well withing their means.

After all we are in a current environment of slowing housing values and possible rising interest rates. Overstretching now is not only irresponsible but could cost you dearly in the future if you cannot afford the repayments later down the line.

Andy

RHemmings

Since you're planning to buy at the beginning of next year, I would advise you to study the property market in great detail, from as many sources as possible. There is significant opinion that house prices are considerably overvalued and that there is likely to be a correction at some point in the near future. Not saying that you should change your decision, but please be very careful that you have considered all possibilities before going ahead.

kazap

Congratulations on deciding to buy a home! I think you have to remember that a home is an investment, but it is also a home. Great if you can get both at once, but lets face it, sometimes you gotta make a choice.

Personally having a home was more important to me, and I was prepared to work hard and to pay for it. There are a number of doom and gloom websites out there at the moment so Ive tried to add a bit of positivity and want to collect a few success stories from people who were just happy to go out there and buy a place rather than just sit and whinge, or worry about money - theres more to life! So good on you for going for it.

If you find your money doesnt go far enough, dont worry, be patient, save your money, build your careers, and you'll get ther before you know it - time goes so quick, bah seems like I was only 18 last week but now im nearer 30 .

Anyways, if you want to inject a bit of positivity, read my FTB story, sign up there and post your story in our forum. Im so fed up with people saying the only way forward is a big price crash, simply because if I had sat on my btt when eveyone said that to me 5yrs ago, I would still be renting now, but no, I actually thought 'what if prices keep rising', as they did, so I decided to stop posting and make it happen.

I rented 4 flats over 4 years and never again, once youve been kicked out of a flat (by fair means and foul) you'll know you cant raise a family in rented accommodation. I was happy to pay for stability. Anyway, its a personal choice, I want to make it clear that for those that value a home and stability, it is possible to buy and certainly worth it.