First Time Buyer - Advice needed please :)

chris163

Hi

I am a first time buyer and would very much appreciate some advice!

I am anxious to get on the property ladder within the next few months as i just keep seeing prices go up and up and up!

I am 21 and currently employed earning around £30-35k a year (basic of £15k, com of £15-20k a year). I have been in the same profession for 3 years and with my current employer 10 months but a new opportunity has arisen for me working within my dads business as a manager.

The Money is as good (basic of £20k + commision) if not better, hours are less etc.. so makes sense for me and offers a more secure future.

My question is - will me moving to the job be frowned upon from a mortgage point of view?

I can put in a deposit between £40-60,000 and want to buy a 2 or 3 bedroom house or flat from 150,000 - £200,000 with a view to renting out a room possibly.

Do you think this is feasible still? There is no probation period working within my dads company or anything - a few concerns are about prooving my income in the role? I have been employed a few years with P60's as proof of earnings from £22-32k P.A.

In terms of my personal circumstances, I have no loans, I have 2 credit cards - 1 with about £400 on it which i was advised to keep on to build my credit rating up and thats it. I recently did a credit score on myself and scored 980/1000 so I think that side is ok.

I would love to buy a house before the end of the year as I can get a fantastic deal on a new build for end of quarter deals.

Any advice EXTREMELY welcome! - thanking you in advance

Chris :beer:

lilyann1

Your finances sounds great to me.Not many people can put in that amunt of deposit so that will stand you in good stead with lenders.
We had to apply for a mortgage only one month after my husband changed jobs and it was fine,as long as we could prove his previous earnings and his existing earnings.
Lenders will usually lend about 4.5 times salary so if thats about what you're looking at it seems feasible to me.
Speak to an IFA and see what they can lend,then you'll know what you'll be able to buy.
If you're still employed with your current employer then work on that for the time being maybe?

homer_j_3

I am presuming that you wont serve a probationary period with your dads company? If so and you have been in constant employment, I cannot see an issue.

You really need to work on basis of 3-4 x salary but will need to be careful with the commission as all lenders will treat this differently and this is a great argument for using a broker, however, if you are looking yourself, just ask the question on how they treat commission.

As far as newbuilds go - I would stay WELL CLEAR just because some mortgage lenders arent that keen on them. One of the reasons they are not keen is because they are often over valued and do not generate great resale prices. clearly this could be very specific to certain parts of the country but I would look bear this in mind!

chris163

thanks for the advice on that.

Thats correct - there will be no probation period with my dad.

I shouldnt have a problem with regard to getting a great deal on a new build house as my dad used to be the area manager for the company who build's the houses I have my eye on! Having sounded out one of the sales girls he knows he can get me a substantial discount - i.e. 3 bed house with garage fully furnished (their show house) up for £249,950 - can get it for £208,000

But generally you would try and focus on a house a few years old?

So the fact I wont have been in employment very long shouldnt be an issue?

Being my old man, I can probably get him to work it so that my basic is higher for a period if this helps my chances on a mortgage (sales and negotiation skills to the forefront!)

Oddgy

What kind of work are you involed in at the moment, and what type of work are you intending to get into with your dad?

homer_j_3

usually being in permanent employment is sufficient and if you have 6-12 months continous then thats ok.

I would personally concentrate on older houses but its upto you. How long you intending to stay there - with the discount you are getting, maybe it could be worth looking at if you are going to be there for a while as this could lessen the risk!

I would look around at older houses which may have been recently renovated. You will probably get a lot more floor space for your money! Have a good look at houses in the area before you commit to anything

chris163

Thanks for the advice

I am going from the car trade as a salesman to an estate agent in a new office as a trainee manager.

lol non of the 2 professions are exactly highly regarded - infact i think double glazing salesmen are more trusted in general - but i do try to be different!

I am currently trying to sort out a company car - and im considering putting some additional cash in to get a better model....(in negotiations still!)

Im trying to avoid putting money in at all.....but....worst case scenario....will a loan of say £5-7,000 make a considerable difference to my credit worthiness with regard to a mortgage?

I am reluctant to touch my deposit for my house as I may be tempted not to repay it! I have it invested in a high interest savings account through First Direct which i get around 5-5.5% off....so although a personal loan is going to come out at about 6% and cost me a bit....it will ensure i dont touch the money!

What would you say?

Appreciate the advice soo far! :T

homer_j_3

If you have any loans or financial commitments then this may be deducted from your income so it could affect your income multiples.

If your loan for 5k costs you 100 a month that deduct 1200 from you salary as an idea to the impact that it will have when you do an income multiple of 3-4x basic salary plus comm.

chris163

Hi Guys

Right - ive taken the new job! been working there 2 months and loving it.

My money is much improved compared to my old job and im on the following:

Basic - £23,000

Commision - OTE of £13,000 - 17,000

Total salary of £36,000 - 40,000

My dad is happy to structure this however i need in order to get a higher mortgage (i.e. write a letter confirming my basic is £30k, 35k etc and guarantee me a wage as he knows i will work hard!).

I am looking to buy a place in about 3-4 months time once my parents house sale has completed (perfect time to move out).

I also bought a car - instead of paying for it with my deposit, I decided to take a personal loan of £12,000. How will this affect my borrowing?

I have a deposit of around £50,000 to be able to put in having worked everything out.

Any advice much appreciated