1st time buyer, 95% mortgage help plz!!

YellowJellyBean

Hi all

Our situation is that we are a married couple with one child and another on the way. Our nursery fees are currently almost £800 pm, and will go up to £1300 March 2012. We also pay £650 pm rent as well as council tax, running a car (necessary for husbands job) and general gas,leccy,water etc.

We don't pay out for anything unecessary such as internet & TV as we don't need it.

Our joint income is £36,000 as of next month.

From that you can probably almost tell we don't have a lot of money to spare to put into savings and we were almost forced to start out family early due to halth problems on my part otherwise we would preferably have waited to start a family until we bought a house but life doesn't always turn out the way we plan!!

So - we have £9.5k saved up, Im setting aside £2k for fees, so leaving a £7.5k deposit which is 5% on £150k we are looking at.

Ive looked online for 95% mortgages but it's not been very helpful. Just seems silly paying out so much a month in rent and not getting anywhere, unable to save anything and have nothing to pass on to our children in the future. At the minute we just feel it's dead money.

Any advice would be much appreciated, I just have no idea where to even start with all of this!!

x

beecher2

How would you afford the mortgage if you can't save anything just now? At 5% your mortgage would be over £800 a month, and you'd also have any maintenace costs too.

Peter_L

The way to look at this is how you can save money so that you can afford a bigger deposit.

You say you have nursery fees, can these be slashed ? Can somebody else (parents, friends, relatives) help you look after them even if only on a part time basis ?

Do you or your partner's works have a facility to allow you to join the childcare vouchers scheme (https://www.childcarevouchers.com) thereby saving on NI & Tax for your childcare ?

Are you entitled to the 15 hours provision thereby giving you 15 hours free childcare ?

Have you spoken to Benefits Agency/Inland Revenue to see if either of you are entitled to Working Tax Credits ?

Other benefits like Child Benefit can be diverted into an ISA

All of the above are a starting point to enable you to start cutting back - might as well be in your pocket rather than the Taxman's ... singly they may not amount to much but collectively they make a heck of a difference ...

xyz123

I am sure its frustrating but at the end of the day if you cant afford it then you have to wait. There is a mind set in this country that until one buys a home, their lifes are a failure. you need to be realistic and continue to save as much as you can till you have decent deposit or mortgage market recovers and 95% deals are available at reasonable rate.

If you havent already, post your SOA (statement of Affairs) on a board here and someone can help you save more money.

good luck.

InMyDreams

£1300 a month on nursery fees with a £36K joint income? Would you not be better off if one of you stopped work at least until your eldest is in school?

Niksan

I was thinking that as well, depending how the joint income is split (is that net or gross?) you'd be working just to pay for child care, also there is some system in place where you can get a cheque from your company to pay for childcare so you're not taxed as much, forget the actual scheme and is dependent on your employers doing it (my kids are in school now so no longer use it)

YellowJellyBean

Thanks for your comments

1. My hubby currently earns £18k and this will be pushed up to about £21k at the end of next month when he gets a promotion. £21k is min we are thinking he will get. So we're reckoning an extra £150 a month which will be put of course in to savings, but we would have to look into a slightly larger rented house when our tenancy is up in October anyway, so we'll probably be paying near on £700/£750 pm renting anyway which when I've compared mortgages is pretty much repayments!! Id rather be paying into our own house then someone elses pocket at the end of that day.

2. We have no one else to look after our son at all. We HAVE to put him in to nursery. We do get £400ish CTC at the mo, and £80 CB (which I didn't include in our salary when I originally posted the thread) which def helps and it's more beneficial than the vouchers we get from work. The 15 hours free kicks in from September for out son but I'll be on maternity leave then so will be for the most part taking him out of nursery. When he returns, the £500 includes the 15 free hours, and I averaged about £800 for new baby hence where I got £1300 from. You get a discout for full time, so really even if I just worked 4 days it wouldn't be a lot cheaper! I haven't looked into ISA but just assumed we would be earning too much to qualify. But wil def look tonight thanks

3. Thanks for your feedback, I don't expect my life to be easier when we own a home, far from it, I am realistic and have done a lot of research, but at the end of the day, Im 24 now and even though it is a long way off, I don't want to be still having to think about paying rent or a mortgage when I reach retirement age!! I want to also secure a future for my children ishould anything happen to me & my husband god forbid. I know 95% is NOT the way to do things, but it's the first step on the ladder.

4. I don't want to stop working, I am part way through my studies & once Ive finished I will be on a higher income, but unfortunately Im in a difficult situation because I cannot afford to fund the studies myself, but it's the only way to increase my salary!! Ive been working in accounts for 8 years now, and still only earn 15k, because I don't have the qualifications.

5. The income is before tax & NI. I didnt include CTC or CB into that. Im not sure what CTC or WTC we'll be entitled to when baby is born because our salary will be higher but so will our nursery fees. We can't get the couchers from our employers because we claim CTC at the moment and thats the beneficial option for us.

I'm afraid we're the textbook middle income struggling family!! We've both worked hard to get where we are and don't have anything left at the end of the month!! We earn too much to get some benefits, yet barely earn enough to pay for necessities. We don't go out often, we don't have holidays really (barring our honeymoon which was refunded) and we don't pay for TV/broadband/running unnecessary cars (our car was a gift - W reg fiesta!!), I get the bus, we've switched gas & lec suppliers, switched debt around for the best deals, stick to bare minimum food budget. Not sure what is left to do to save money.

Thanks for the input though it's given me a lot to think about x

Gigglepig

hi there

Could it be an option for you to stay at home with the kids, and take some part time work you can do from home, like some book-keeping work? And continue your studies in the evening?

Alternatively, can you find another job where they would fund your training? If you have 8 years experience you may be a quite useful "trainee".

The other thing I would look at is if you can finish the studies quicker, if that is your goal and would help you get a better paid job.