First Time Buyer advice

iamana1ias

Clear those cards from your savings - 26%???? :eek:

Google 'snowball calculator' and see how much those cards are costing you!

I'd suggest getting a bit more money savvy before buying a house.

ACG

Hi,

Im a qualified mortgage advisor. I wouldnt travel to Newcastle as it is just too far.

I may be wrong but i dont think your broker has been 100% honest in order to get you that decision in principle. Whilst your probably not too bothered as it will help you get where you want to be, i would check over everything - especially the answers to the questions around existing debts. If they havnt told you how they can get you a mortgage then it is worth checking over everything.

My personal opinion (and this is without knowing enough about you to give advice) is that they will be able to get you the mortgage and as first time buyers you are probably best going with a broker. However, i would say avoid your bank! Banks are not the best choice - they can only tell you about their mortgages. You might be banking with barclays, yet halifax could give you a better deal.

brit1234

simoran1 wrote: »

We would be looking to borrow roughly 90% LTV and have around £12,000 deposit. The houses we are looking at are around 100k price.

You do realise that house prices are expected to fall 10% in the next year. That would wipe out your whole deposit tipping you into negative equity.

Negative equity, £17,000 in debt and student loans on top sounds suicidal.

Pay off your debt first and save a bigger deposit, prices will be much cheaper to buy in a few years.

simoran1

brit1234 wrote: »

You do realise that house prices are expected to fall 10% in the next year. That would wipe out your whole deposit tipping you into negative equity.

Negative equity, £17,000 in debt and student loans on top sounds suicidal.

Pay off your debt first and save a bigger deposit, prices will be much cheaper to buy in a few years.

No I didn't know this. Can you advise why you believe this to happen?

ViolaLass

brit1234 wrote: »

You do realise that house prices are expected to fall 10% in the next year.

Ah, the old 'house prices are utterly predictable' myth.

OP, I agree with others, pay your debts off with your savings - they're costing you a lot at the moment. If you used your savings and paid £1500 a month, the debts would be gone in 4 months. Then you can start saving properly without paying loads of interest to credit cards each month.

themull1

If you've got that much disposable income why not clear the debt quickly? why pay the minimum on the credit card debt?

Doshwaster

simoran1 wrote: »

This all seems a little strange to me - I assumed the way to do this would be to get approved for a mortgage amount then to start searching (and subsequently) putting offers in for properties we are interested in. L&C are suggesting the best way to proceed is to find a property, put an offer in and then they will search for a mortgage.

Yes, it does seem odd, and it confused me as a FTB, but that's the way it works. A mortgage company won't make a formal offer to you until you have had an offer accepted and they've had a chance to look at it. A mortgage is a loan secured on a property so you need to find that property first.

An Agreement in Principle, means very little but it does give you a good idea of what you can afford and shows estate agents that you are a serious buyer. Just because you have an AIP from one lender it doesn't mean you have to use them.

Remember that mortgage deals change on a daily basis. You may get a decent quote one day but then a few days later it has got more expensive or has been taken out of the market.

brit1234

simoran1 wrote: »

No I didn't know this. Can you advise why you believe this to happen?

Have a look at this article to give you a heads up.

http://www.moneyweek.com/investments/property/uk/uk-house-prices-are-heading-for-another-double-digit-fall-12208

The housing market is on the edge of an abyss at the the moment even with interest rates at 0.5%.

eschaton

themull1 wrote: »

If you've got that much disposable income why not clear the debt quickly? why pay the minimum on the credit card debt?

Beat me to it.

With no much debt on a high income - then it appears that this £1500 should be disposable but is more likely being spent with even more money.

Thrugelmir

eschaton wrote: »

Beat me to it.

With no much debt on a high income - then it appears that this £1500 should be disposable but is more likely being spent with even more money.

Living a lifestyle dream.............

No problem until life throws up the unexpected.