FTB - What price range should we look for?

Lord_Dante

Morning,

Have whats probably a silly question but this is all new to me. We can afford a £140,000 mortgage and up to now we've been looking for propertys priced at £140,000 or less. However reading up that you should start lower with offers is it reasonable/realistic to look at houses priced max £160,000 in the hope we can get them down to £140,000 or less? Do home buyers often overprice their listings knowing people will offer less and does anyone expect their house to sell exactly for what it's listed?

I know it could lead to heartache as if anyone wants even a bit over £140,000 we'll just walk away so are more likely to be declined. We are in a good position compared to some so should be able to move quickly if someone accepts.

Thanks in advance.

TrickyDicky

When you say afford - is that what YOU can afford or what the mortgage calculators have told you you can borrow?

Basically, you will need at least 10% deposit, Plus fees as cash in your bank account. Fees are:
Solicitors fees (up to £1000)
Stamp Duty (£1500 on a 150k house, unless you both first time buyers)
Removal fees (I paid £65 to rent a van for a day plus lunch and dinner for my dad and brother, but if you're going between towns you will probably need to pay a removal company - can be hundreds).
Survey (up to £500)

At the end of the day, the mortgage will be fairly fixed, so anything more than this will have to come from your bank account.

Lord_Dante

Hi TickyDicky,

Yes thats what we can afford. We've been saving and reducing debt for nearly 2 years so well prepared (I'd like to think so anyway).

We have £15500 saved so far so £14000 for deposit the rest for fees. Moving is sorted as i know a man with a van and mates help for beer + pizza. £1500 for other fees. We save about £750 - £1000 a month too so it'll increase by the time we find somewhere I bet

Oh and both first time buyers so no stamp duty.

somethingcorporate

Then 160-170k is a realistic MAXIMUM to start looking at. Lots won't play ball depending on their position / time on market / expectations etc but the odd one may.

You will just need to prepare yourself to get rejected and walk away at your ceiling price.

We went in on a number of £280k+ properties at £250k because we felt they were overpriced and so close to the stamp duty threshold. We ended up getting one priced at £285k for £245k. Some of the others we put in offers on are still for sale almost a year later and for less than we originally offered!

Good luck, you're in probably the best buying position you will ever be in so use your advantage wisely!

penguingirl

I know you don't want to have to think about this, but you might be best having a bit more aside for fees- sales do fall through and I know quite a few people who have had to have surveys done on more than one house- either because the results of it made them put out or because the sellers pulled out after. In the second scenario they had to pay the majority of the solicitors fees too and then do it all again on a second house!

We thought we were going to have to pull out of our ftb because the vendor was dragging her feet about exchanging and it was gutting thinking about all the money we would have wasted.

Lord_Dante

@something corporate: Thanks thats what I wanted to know. It's worth the rejection for the chance to get something really nice.

@penguingirl: We're still saving like mad so will have more each month. I read a lot about how it can take a while which is why we've started looking now rather than later If worse comes to worse and some fall through we'll need to wait a month or two to top the fees pot up.

jonny_power

Probably worth having a contingency for any works that might need to be done, or any decorating you'll want to do/new carpets, etc etc.

pinkshoes

Lord_Dante wrote: »

Hi TickyDicky,

Yes thats what we can afford. We've been saving and reducing debt for nearly 2 years so well prepared (I'd like to think so anyway).

We have £15500 saved so far so £14000 for deposit the rest for fees. Moving is sorted as i know a man with a van and mates help for beer + pizza. £1500 for other fees. We save about £750 - £1000 a month too so it'll increase by the time we find somewhere I bet

Oh and both first time buyers so no stamp duty.

I'm a little confused...

What you can afford doesn't really come into the mortgage calculation. It'll be about 3x your joint salaries minus any debts.

So to borrow £140k, then you'd need to earn over £45k between you.

How much do you earn, and what are your current debts?

We're looking at properties to buy at the moment around the £300k mark, and are looking at up to £350k, some of which are really over-priced (thus cheeky offers are possible), and others are priced to sell at £350k, so out of our budget!

Lord_Dante

We earn £45,000 a year total and I have a credit card with £3000 left on it. I used it to buy a car on 0%.

I've taken the deposit into account as well when looking at what we'll be asking for. Is this not correct? E.g. if we buy at 140,000 we need a mortgage for £126,000?

poppysarah

Have a look at the area you want to live in. See the types of houses in thet 100-150 price bracket.
Have a drive round. Get a feel for the area and the streets. You should soon pick up on which are nice ones. (The ones you don't mind walking round at 9pm on a Friday)

Go view some houses.

Make notes. Which have the right room sizes?
Round here the slightly dearer ones have smaller room sizes and gardens! (Because they have always been privately owned and were squashed in more to make more money for the builder in the 30s; by contrast the 50s council built ones have huge rooms, huge gardens and space at the side !)

Apparently some snobs don't consider the ex-counil houses - and prefer to buy the much smaller ones for more!

poppysarah

Lord_Dante wrote: »

We earn £45,000 a year total and I have a credit card with £3000 left on it. I used it to buy a car on 0%.

I've taken the deposit into account as well when looking at what we'll be asking for. Is this not correct? E.g. if we buy at 140,000 we need a mortgage for £126,000?

How much could you save each month if you went mad?

Go mad saving for 3 months. Then relax your spending a bit but don't go mad spending.