First Time Buyer - What are my options?

OverExposed

Hi,

In short, i currently do not have any mortgages and I am looking to purchase a property (house/flat - mortgage) for the first time with the view to rent it out. do not necassarily mind if the rental income and mortgage payments are very similar (I am more interested in the investment and having a property under my belt)

I am pretty new to this so I am unsure what to do. My details are as follows:

- i have £35,000 of savings currently that can be used for a desposit
- i am 24 and I earn £40,000 (not including bonuses) a year in the financil sector, i have been working full time for 18months
- my mother is 50 and she earns £45,000 a year and works in teaching and has done for 25 years. She also has a joint mortgage with my father on a £600,000 property

My main questions are:

- do I need a much bigger deposit? ie i could save more money till i have enough
- what kind of property (house/flat) should i be looking at and what kind of value
- would i be able to get the mortgage on my own? or would i be able to get it with my mother

I feel that maybe my deposit is too small currently and that my young age makes it harder for me. I am able to save more money for a deposit however and also have my mother available to go joint if this is possible.

Please could someone briefly advise? Sorry for some nieve questions!

Many thanks

BitterAndTwisted

I cannot conceive of why a person would want to consider buying a property and not live in it themselves.

OP: the money-train left the Buy-To-Let station some time ago. This is not a particularly good time to speculate with your only assets/savings. Erm, and there's a very great deal more to being a professional landlord than "having a property under your belt".

BitterAndTwisted

Madness, I have no hidden agenda. I just have an opinion, which all posters on this site are entitled to voice as long as they're not rude and/or insulting.

OP: being a landlord is not a suitable profession for the amateur and I would not recommend that you commit all of your savings or assets to such a venture. You'd be much better off buying a property to live in yourself and perhaps consider taking in a lodger or two to help towards the mortgage payments.

OverExposed

With all due respect, I do not believe you are accurate in your opinion.

I am not looking to become a buy-to-let king and make lots of money.

Nor is the £35k saving my total savings. Its simply what I currently have aside, amongst other savings, which could potentially be used towards a deposit.

I am looking to purchase a property, with a view to hold it as an asset. I am not looking to make a profit from rental income. I do not mind if rental income < mortgage repayments. I do not mind if the property value declined over the next few years (a significant decline would be highly unlikely)

I am simply interested in finding out more information
- what kind of property should i be looking for
- is my deposit too small
- can i get a solo mortgage, or shold i go for joint
- are my circumstances sufficient (age, employment, salary)

I am not stupid, I know the property bubble has been and gone and there will not be one like it.

I was just looking for some answers.

danielley

If you have £35,000 as a deposit

With an 80% mortgage, the maximum you will be able to purchase a property for is £175,000.
With a 90% mortgage, the maximum you will be able to purchase a property for is £350,000.

What are house prices like in the area you are looking at?

I personally would go for a lower value property as when the time to re-mortgage comes around, you will have access to a better rate if you have a bit more equity in the property.

When_is_the_reset?

OverExposed wrote: »

With all due respect, I do not believe you are accurate in your opinion.

I am not looking to become a buy-to-let king and make lots of money.

Nor is the £35k saving my total savings. Its simply what I currently have aside, amongst other savings, which could potentially be used towards a deposit.

I am looking to purchase a property, with a view to hold it as an asset. I am not looking to make a profit from rental income. I do not mind if rental income < mortgage repayments. I do not mind if the property value declined over the next few years (a significant decline would be highly unlikely)

I am simply interested in finding out more information
- what kind of property should i be looking for
- is my deposit too small
- can i get a solo mortgage, or shold i go for joint
- are my circumstances sufficient (age, employment, salary)

I am not stupid, I know the property bubble has been and gone and there will not be one like it.

I was just looking for some answers.

:rotfl:This is the funniest thread I have seen for a long time.

MadnessofHPC seems to be having a conversation with himself (or herself, of course).

If Overexposed is real - then just go ahead and buy that house that you are not expecting to raise any yield from or to gain anything through capital appreciation.

Sounds entirely sensible :rotfl:

Or give the money to me and will spend it on booze. At least then it wouldn't be wasted.

OverExposed

When_is_the_reset? wrote: »

:rotfl:This is the funniest thread I have seen for a long time.

MadnessofHPC seems to be having a conversation with himself (or herself, of course).

If Overexposed is real - then just go ahead and buy that house that you are not expecting to raise any yield from or to gain anything through capital appreciation.

Sounds entirely sensible :rotfl:

Or give the money to me and will spend it on booze. At least then it wouldn't be wasted.

Ahh you are one of those negative types.

Well luckily for me, I have a lot of savings split across different asset classes. I can afford to "waste" £35-50k on a house deposit, and not yield any immediate return. However in the long term, I do not think it is likely I will lose a great deal. If anything, I can only gain.

I want to branch out and diversify. I do not want to buy another £25k bond portfolio.

I want to own a property and experiment. I believe that it will be a good asset in the long term. I can afford to take the risk.

Mind your own business, it seems you are one of those who lurk in the forums, ready to slate someone at the first opportunity. I may have a lack of knowledge but I am not stupid.

OverExposed

danielley wrote: »

If you have £35,000 as a deposit

With an 80% mortgage, the maximum you will be able to purchase a property for is £175,000.
With a 90% mortgage, the maximum you will be able to purchase a property for is £350,000.

What are house prices like in the area you are looking at?

I personally would go for a lower value property as when the time to re-mortgage comes around, you will have access to a better rate if you have a bit more equity in the property.

I am not sure whether to purchase a flat or house, could you shed some light?

Also, my £35k deposit could maybe stretch to £45k - £50k in 4-6 months approx. Would this help?

My main concern is how I would get a mortgage... could I go solo based on my criteria or should I go joint.

firstaspect

There's no reason why you couldn't go in solo for a mortgage. You need to look at the prices of flats/houses in the area you are intending to purchase and choose what you can afford based on the rates you could get from a mortgage lender (e.g. an 80% LTV will get you much better rates than 90%, 75% even better).

When_is_the_reset?

OverExposed wrote: »

I am not stupid.

I don't think you are real; that is why I am fooling around.


Anyone that says

'I want to buy a house',

'I don't want to live there',

'I don't want to make any money from renting it'

and then 'I don't care if the value drops'.....

............cannot exist.

This does not make sense for either those who are bullish or those who are bearish. It is just strange.

clearing_out_my_pockets

danielley wrote: »

If you have £35,000 as a deposit

With an 80% mortgage, the maximum you will be able to purchase a property for is £175,000.
With a 90% mortgage, the maximum you will be able to purchase a property for is £350,000.

What are house prices like in the area you are looking at?

I personally would go for a lower value property as when the time to re-mortgage comes around, you will have access to a better rate if you have a bit more equity in the property.

Although your figures are right, your logic isn't. With a salary of £40,000 a property of £350,000 would be a 7.9x multiple and the rates would be shocking. In any case I don't believe that a lender would even begin to entertain a 10% deposit on a BTL; most want at lease 20%