Mortgage help please!

hollieannx

I have been renting a property since December and can't help but feel as though I am throwing money away!

We have give our notice in as we have had loads of problems with the house and are due to move out on Friday and are now wondering what to do next? Continue to rent somewhere else or save for a mortgage?

Me and my boyfriend are both in our early 20's and have the option to live with his parents for however long we need to.

If I am honest I have never looked into a mortgage because it just sounds so scary but thinking about it long term I think it could be more beneficial to us as we would have our own home.

We currently pay around £1500 out a month to rent ,thats the rent and all bills and as I said before I feel like I am just throwing money away.

I know mortgage companies are looking for high deposits but what is realistic? Ideally we would want a 2 bedroom property as it would be somewhere we would want to stay.

Is there any advice anyone could give? Past experiences etc..

Sorry I must seem really stupid but it's not something I have ever looked into before.

hcb42

You would need a deposit of about 10% plus money for legal fees etc, surveys, so another couple of £K...plus moving in expenses...obviously we dont know where you are looking to live so cannot quantify that any further. But with that rent/bills I imagine it won't be the cheapest place to buy either.

Sounds like living with folks is a good idea if you can cope with it. you could be saving £10K every six months, less what they want for board/food etc. I would go for it.

hollieannx

We currently live in Watford (Hertfordshire) and would want to stay around the same area.

We dont have any outgoings apart from my boyfriend who has a loan which is due to end in September.

As you said if we put away what we would be if renting (£1500) it should only take a couple of years for a ok size deposit.

I think I just need plenty of motivation! lol

beecher2

You don't say how much a two bedroom property is in the area you want to live in. Work out how much of a mortgage you'd need and see how your salary multiples stack up.

hollieannx

We would probably be looking at something between 200-250k I would have thought. (Based on property prices now)

I am currently on 17k per year before tax and my boyfriend is on 25k per year before tax.

originalmiscellany

That would be your issue I'm afraid...
You've not mentioned a deposit, but you're looking at a deposit of 10% = 25k + fees = say 30K.
Also your combined salaries = 42k - you'd struggle to get someone to get you upto the 225k (roughly 5 times your salary) needed at the moment.

Best thing to do is to save very hard, and in a years time see where you're at. If it involves moving in short term to his parents to get a deposit, that could make all the difference.

hollieannx

Thanks originalmiscellany - No we don't have a deposit as of yet as we are still undecided of what to do.

Is there anything we can do in the meantime?
I have heard people say it is better to have a good credit score - So shall we apply for CC etc.. or is that a no no?

beecher2

£168,000 would be 4 times your combined salary, so you'd have to save £90k or so to get a £250,000 property. Unless your income is going to rise significantly in the next couple of years, you probably need to revise your expectations.

Also note that a £168,000 mortgage at 5% would cost you around £1000 a month. With council tax, maintenance costs and bills, I think it'd be a struggle.

hollieannx

So basically we have no choice but to rent?
I can't live at home for the next 5 years - not because I don't want to but I just couldn't expect my boyfriend's parent's to do that.

I just feel there is no help for anyone - I have worked since I have left school and want to make something of my life yet don't get given the chance unless you have 50k spare.

beecher2

hollieannx wrote: »

So basically we have no choice but to rent?
I can't live at home for the next 5 years - not because I don't want to but I just couldn't expect my boyfriend's parent's to do that.

I just feel there is no help for anyone - I have worked since I have left school and want to make something of my life yet don't get given the chance unless you have 50k spare.

Maybe focus on upping your income, while saving what you can.

You could
-move to a houseshare to save money
- post a Statement of Affairs to the Debt Free Wannabee forums for help in budgeting
-research cheaper areas you could move to
-retrain/gain qualifications to get a better paid job

Don't look at renting as throwing money away - it is paying for a roof over your head, and there's a lot to be said for it. Owing the bank thousands of pounds isn't part of making something of your life, in my opinion.

Thrugelmir

Be prepared to move area to get on the property ladder. There'll be somewhere where its affordable. Even if its only 1 bed.