First Time Buyer - Advice Please

fruityfairy

Hi! I am hoping to become a first time buyer somewhere in the not to distant future. I have not yet seeked any advice from a mortgage advisor as I am not yet ready. Heres my situation:

Me and my partner are hoping to buy our first home, we are looking at properties in the region of £65k, we are in Sheffield, and there is quite alot of houses around that mark although not in the best area or condition but we are happy to put the work in! We are looking for a 95% LTV value mortage. We have been saving since April and have saved £4k so far.

I am looking for advice on how much realistically we need to save before applying for a mortgage, I have no idea on cost of fees and any other costs involved.

We are currently renting a house for £550 pcm, so although a 95% mortgage has higher interest rates, if it takes another year to save up a 10% deposit we will have 'lost' another £6,600 in rent. I am keen to move out ASAP.

I have used a mortgage calculator and our monthly repayment will be between £350 - £400 pcm.

We have a combined annual income of £36,000 and both have fair credit scores with no outstanding debt, how likely are we to get a 95% mortgage?

Thanks

InLimbo_2

I would imagine it would be difficult, though not impossible, to get a 95% mortgage. If you can find companies offering a 95% mortgage, as long as you have very good credit rating, which you can check online for about £2.

Please be aware that our buying fees were quite high- £600 for a good survey, £1500 for solicitor's fees. I am aware that you can do both of these for half the price.

Good luck!

fruityfairy

InLimbo wrote: »

I would imagine it would be difficult, though not impossible, to get a 95% mortgage. If you can find companies offering a 95% mortgage, as long as you have very good credit rating, which you can check online for about £2.

Please be aware that our buying fees were quite high- £600 for a good survey, £1500 for solicitor's fees. I am aware that you can do both of these for half the price.

Good luck!

Thank you. I currently bank with the Yorkshire Bank (Clydesdale), they are offering 95% LTV according to their website. I have had a loan with them and paid it off early so now they are always offering me loans but not sure how I would fair with a mortgage application.

fruityfairy

So is there just Survey fees, solicitor fees & mortgage arrangement fee (about £400 i think) to pay? Anything else? We would do the moving ourselfs with a van lol. Also I read you need at least enough money to pay mortgage/ bills ect for three months, how is that figure calculated? Basically I am looking to find out how much money I need to save (everything included) before applying.

InLimbo_2

If either of you have ever purchased a property before there would be stamp duty to pay but it looks as though the price range you are looking at doesn't fall into that any way.
Off the top of my head, survey fees, solicitor fees, mortgage valuation/arrangement fee, any fees if you use a broker but our mortgage company pay those anyway.
We are also hiring a van ourselves (so much cheaper but it does lack the insurance for your goods while they are being transported).
You do need to have at least two months worth of the mortgage, as for some reason that I can't quite remember the initial payment is usually double what you normally pay.
Hope that helps!

fruityfairy

Thanks, we are both FTB, but I think the threshold for stamp duty is £125K. Thanks for your advice, we have basically stopped having a life for that last 5 months to save what we have so far and I cant imagine doing it for years as some others on here have done. Thats why I am going for a cheap first property. I will aim to save £10k and that should cover some decorating too. I am hoping to move for summer next year!

LittleMissAspie

You'll probably have an overlap between buying the house and your tenancy ending (2-4 weeks) so make sure you have extra for that. You can probably get a discount on the overlapping council tax, but you'll need to pay it first and get refunded later.

Not sure what InLimbo means about the initial mortgage payment, ours was half the normal rate as we moved in mid-month. But always account for more than you need to be on the safe side.

fruityfairy

Thank you LittleMiss, I did not even think of the overlap!

InLimbo_2

Your first payment will usually be bigger than your normal monthly mortgage payment because your normal payment just covers the month in which it's due. But a new mortgage often starts part way through a month.

Example

If your mortgage started on 27 April for example, you wouldn’t make your first payment until May. So your May payment would need to cover the period from 27 to 30 April as well as the full payment for the whole of May – which is why it’s a bigger payment than normal.
May monthly payment Interest from 27 to 30 April Total first payment
£495.94 + £65.22 = £561.16

Interest is due from the date your loan is made to the month end and added to your balance immediately, once you have made your first payment this amount would be deducted from your balance.

I have 'stolen' this from wwwcheltglos.co.uk, as I am not allowed to post links!