How much do we need?

nimo20

My fiance and I are currently going through the saving process of house buying. We would ideally like to purchase a house in or around the £120,000 mark but we're both newbies to all this.

So far we have £6,000. I earn £25,500 and he earns around £20,000. How much should we be looking to save before we approach a broker and seriously start considering looking for our first house?

I know there are numerous charges that come with house buying and woudl like to take these into account on top of our deposit.

Any help would be much appreciated.

We were also considering going to our bank to get an idea of how much we could borrow but I believe this could be detrimental if they do a credit check???

Thanks x

Person_one

To get access to the best deals for your mortgage, you should aim to have a 25% deposit.

With a 10 or 15% deposit you can probably still get something but the lenders are stricter and will scrutinise your application more thoroughly so you'd need perfect credit scores and to have all your numbers in order.

When you buy you'll need to pay solicitor's fees, I always budget £1500 for these just to be on the safe side although the most I've paid was £1100. They'll quote you around £350 for their services but the disbursements can really add up. You'll also need to pay for a survey, and the price will vary depending on what kind of property you're looking at and how thorough you want to be.

Pee

If you speak to a mortgage broker, they will be able to give you a good idea of what you would be able to borrow on those figures without going through the credit check.

Have you checked your credit details and done anything to improve this i.e. make sure you are on the electrol roll, etc?

If you ring a solicitor for a quote for a £120k house in your area, they will tell you their fees and also what you should expect to pay for various searches, stamp duty - not that there will be any in this case -, Land Registry fees etc.

It is good advice to save a 25% deposit if you can. I bought with a 10% mortgage and to be honest I had enough trouble scraping that together. I was however sure that my wages would be going up as I was just starting a career, and also that I could manage with just my salary and no imput from my boyfriend as I wasn't sure about his financial responsibility.

nimo20

25% seems awfully high! We should be able to get 10% by April next year but as we are currently living with his mum I dont think we could last another year while we save another 15%.

I checked my credit score with experian and it came back good so all should be fine on that front but the fiance hasnt done his yet. I just didnt want to go getting all excited about talking to one of the professionals (bank or broker) only to have them say "why are you talking to me when you have hardly any money!" lol.

I do think its a good idea to speak to a solicitor at some point in the not too distant future though. At least that way I suppose we can get an idea of how much to set aside for extras.

mrcol1000

You don't need a 25% deposit at all. With 10% you should be able to get a good deal. Two months ago we got a 6.5% fixed rate deal for 5 years with a 10% discount. We both work and have okay credit records and no other debts. We paid solicitors fees of £450 inculding all the costs. Our mortage payments although a bit higher than variable rates are fixed for the next 5 years so we don't have to worry. We knew in advance how much we would be paying a month and know we can afford it. We can also pay extra if we have a bit of spare money.
If you go to the bank and applied for a mortage it will be recorded on your credit record when they run the checks. This isn't a bad thing but if you do this at several banks and apply for other credit then alarm bells might start ringing that your applying for a bit too much credit and cause you problems.
You can research how much you can borrow now. Most bank websites will tell you how much they will lend and what kind of rates. Best thing you can do is wait till you have 10% and then go and go and see the bank with the best rate you can get and see a mortage adviser. They will be able to talk you through the application. You can also use a broker but just make sure you make the decision based on their advice. Don't let them decide for you. Once you have applied and got your mortage in prinicple thats your golden ticket to Estate Agent's to know your a serious buyer with money ready.

Person_one

Don't forget to leave yourselves a buffer of savings for after you move. Its not a great idea to end up with 20p in the bank on moving day just in case something unexpected happens!

scottishblondie

I'd aim for at least 15% + an additional £3k for moving costs and emergencies + furniture costs (depends on what you need to buy)

picklepick

We had a 25% deposit and struggled to find a mortgage even though we met all the criteria for lending. In the end the broker found us a good deal with Abbey.
Most banks will tell you how much they will lend you without doing credit checks and assuming you have good credit. HSBC has an online quote system so you just imput your details and it gives you an amount. HERE
Most solicitors will have online quote forms with no obligation so you can start getting quotes now so you know where you stand. We went for a fixed rate. Basically, no matter how long the transaction took the amount we paid remained the same. This helped us a lot with budgeting.

Eric1

save at least 10% + one-off costs

Pee

The HSBC checker is good. I just entered some deatils for me and there is a big difference between what they would lend if I had a £10,000 deposit and if I had a £15,000 one, but if I had a £35,000 deposit they were not prepared to lend any more than if I had £15,000.

I think 10% with an allowance for legal costs and moving/ new furniture which should be more than you expect but you stick to, £1000 emergency savings so if the boiler breaks down you'll be ok and make sure if interest rates went up to 12% you could manage. I don't mean that you'd be fine, most of us wouldn't, but that you'd be able to grit your teeth and get through it. Of course the longer you can stay living with parents and saving hard, the better - from a purely financial point of view of course.

FCRangers

you've got 6k now and in April you'll have 10k and your living at his parents. What you doing with all your money?