First Time Buyer

ally001

Hello, first time buyer and first time poster :j

A house has come up that I like, a semi at £110k. My annual salary is £27.5k, although usually I recieve expenses in the region of £200-£500 a month. I've also got the option of the odd bit of overtime, and perhaps on-call which would bump me another 10%. For mortgage purposes, I'm only considering my base salaray of £27.5k as the rest of it is not consistent.

I have no debt, good credit and not a lot in terms of outgoings (I still stay at home).

Radio 4's moneybox advises a 5 year fixed rate at the moment, which seems to be in line with most thinking. I have a 25% deposit, and the best deal I've turned up is Newcastle Building Society 5 Year Fixed at 3.99%.

Given my expenses/on-call/overtime, I plan to make use of over payments as much as possible when I have extra cash. Quick sums in my head suggest that £1,000 over payment in the first year will save me £1,000 interest over the term of the mortgage.

I'll be trying to get a discount on the house, the background story suggests this could be possible.

As the house is 50 years old I'll be getting a full survey done in addition to the normal home report.

I thought I would post up and see what the resident experts think of my plan? Any comments much appreciated :beer:

originalmiscellany

Numbers:
House 110k
Fees etc 2k
Deposit: 27.5k
Mortagage: 82.5k
The amount you're wanting to borrow is 3 times your salary, so that should be okay.

At 3.99% = £435 a month which is super manageable and if you're practical you will be able to overpay a decent amount.

So yes, on paper that's looking fine.

What's the amount you can over pay every month?

originalmiscellany

it's also useful to have access to a pot of money (say 6 months of mortgage for any emergencies/eventualities you may not have considered)

ally001

Thanks, as far as I can understand the wording, I'm allowed £500 per month one off payments. I'll clarify this when I speak to them. I think to be realistic, that amount should be fine. And yes, Moneybox said exactly the same thing, 6 months worth of expenses is recommended. As a wise man once said, there is nothing more reassuring than a big pile of money

originalmiscellany

Exactly! The other alternative is that you look for a deal which allows infinite overpayments; I think they're amazing but an offset could provide you a decent solution but would require you to have a bit of a mental paradigm shift! If you are able to save a decent chunk of money (as you said 1k a month for the first year), then being able to stick it in the offset would benefit you hugely, and you could always go back and get the money "out" of the offset if it was an emergency?

http://mortgages.firstdirect.com/mortgage-products/product/5-year-fixed-repayment~9

is 3.69% with first direct with infinite over payments...