First Time Buyers

Bozzagorn

Yea I am aware of the other costs involved with buying somewhere. Perhaps I should be giving that a little more thought. Thanks.

If I was to say that we would be prepared to take it down a notch - had a quick look around the market over the past few days and can get a decent-ish 2 bed flat for about £80k. Does that make the figiures a little bit more feasible?

pinkteapot

There's feasible in two senses. (1) Can you get a mortgage for as much as you want? (2) Can you afford to pay the mortgage and bills each month without getting into difficulty?

For (1), see the Mortgages board or speak to a broker.

For (2), do a monthly budget. Use the calculator below to check what your mortgage repayments would be and then budget for council tax, utilities, phone/TV/broadband, insurances, mobile phones and food. Look at your income and how much you'd have left after these outgoings each month. If you're currently renting you should already know the costs as they won't change much if you buy a similar sized property.

http://www.guardian.co.uk/money/mortgage-calculator (interest rates are currently very low by historical standards; make sure you can afford your mortgage repayments if the interest rate on the loan increases; try different rates)

One thing to think about with a 2 bed flat is how long you'll be happy there for. I bought one in 2006 and sold it in 2009 as my other half moved in and we wanted more space. As a result, I lost a lot of money as the market had tanked. The house price outlook is incredibly uncertain at the moment. House prices could well be lower than they are now in 12-18 months. You may find that if you want to move in the next few years, you will have to accept a lower price than you paid for it. If you can't sell it for the mortgage debt outstanding you have to pay the bank the shortfall yourself or you simply can't sell. Do think hard; I loved my flat when I was on my own but it was just too cramped with my now hubby. With prices uncertain, you need to buy something that you can live in for 5-10 years if you are forced to by what happens in the market.

I know you said it hurts paying a landlord £600 per month, but if I had rented instead of owned my flat from 2006 to 2009 I would have been around £22,000 better off today. My mortgage payments were more than rent would have been, and I sold it for less than I paid because I wanted to move. Owning isn't always better.

Grimbal

I won't comment on any of the above, but thought I'd mention that Inheritance tax may play a part in any decision you come to. If the GPs estate is over £325k, then you'll be paying 40% tax on it. However, and I could be wrong, so double check, I vaguely remember mention that money gifts upon marriage are exempt from IHT (up to a certain amount).

So, all I'm saying (not taking into account previous comments on thread), is that you could get the money free of IHT if the GPs gift you the money upon your marriage rather than waiting for their estate to be setttled.

ETA: sorry, may not be of much use to you here as limits seem quite low. Taken from HMRC website:

parents can each give cash or gifts worth £5,000
grandparents and great grandparents can each give cash or gifts worth £2,500
anyone else can give cash or gifts worth £1,000