Potential FTB seeking advice

chriss1979

Hi

Im currently weighing up my options and contemplating taking the plunge and buying my first property!

My choices are a bit limited in that my salary is £18.5k so realistically Im looking at a flat (most likely) or possible a shared ownership (havent ruled it out but dont know much about it). I have managed to save £12k which I think should be enough for a 5% deposit, money for furniture and also still have some left over afterwards just to have a bit of security.

Are there any guides or advice for people new to it all, in particular relating to the leasehold area of buying flats which to be honest intimidates me a bit at the minute.

Im also putting together a spreadsheet of monthly/yearly outgoings to see if its doable and to try and set a rough guideline of what I will need to budget for, so far Ive got the following on the list:

Mortgage
Council Tax
Diesel
O2 Mobile Bill
Car Insurance
Broadband
TV Licence
Telephone
House Insurance
Food
Electricity
Water
Gas

Is there anything else that Ive missed off?

Any advice on the simplest of things will be appreciated, whether its mortgage advice, any other financial advice or just a helpful opinion!


Many Thanks,

Chris

honeypop

Just a few things I noticed straight away...

You've put 'house' insurance so that will need to cover buildings AND contents insurance.

Life insurance? Who will pay the mortgage if anything happens to you.

Income protection? What if you can't work for any reason - not mortgage payment protection, instead this pays a sum to cover more outgoings, not just mortgage.

You don't say you have budgeted anything for solicitors fees, stamp duty, mortgage fees, surveys etc... which you need to pay to purchase a house (amounts vary). We recently bought our first place for £190,000 and all these things came to just over £5000.

Maybe need to put a bit away each month towards road tax, MOT and car maintenance and minor repairs, so there's not a panic when something like this comes up.

Also, you will need to budget an amount for personal spending (ie: going out, lottery, haircuts, odd bit of food not included in food budget, magazines, newspapers, birthday presents/cards, prescriptions, clothes, and many other bit and pieces). You might not spend on all of those things, but most you will need to account for. The best way to do it, is keep a spending diary for a month or so to see where all the little bits of money go and make sure you budget for this.

chriss1979

honeypop wrote:

Just a few things I noticed straight away...

You've put 'house' insurance so that will need to cover buildings AND contents insurance.

Life insurance? Who will pay the mortgage if anything happens to you.

Income protection? What if you can't work for any reason - not mortgage payment protection, instead this pays a sum to cover more outgoings, not just mortgage.

You don't say you have budgeted anything for solicitors fees, stamp duty, mortgage fees, surveys etc... which you need to pay to purchase a house (amounts vary). We recently bought our first place for £190,000 and all these things came to just over £5000.

Maybe need to put a bit away each month towards road tax, MOT and car maintenance and minor repairs, so there's not a panic when something like this comes up.

Also, you will need to budget an amount for personal spending (ie: going out, lottery, haircuts, odd bit of food not included in food budget, magazines, newspapers, birthday presents/cards, prescriptions, clothes, and many other bit and pieces). You might not spend on all of those things, but most you will need to account for. The best way to do it, is keep a spending diary for a month or so to see where all the little bits of money go and make sure you budget for this.

Thanks for the advice, Im incorporating these things slowly! Im being realistic about it and unless I could get a shared ownership for a house Im most likely looking at a flat in the £95k region hence need a bit of advice on the leasehold side of things.

How much on average should the solictors fees, surveys and mortgage fees be? And are there any other things that are part of the buying process that need including?

helping_hubby

Solicitors fees vary greatly...

In the southeast we were getting quotes of £2800 (which included £1800 stamp duty which you wouldnt need to pay on a house under £120k).

Surveys...depends what type of survey...value of house etc etc...

Mortgage fees you can find out by looking on the websites. If you go for fixed rate mortgages you're looking at £600 to £1000 fee, plus the cost of a valuation (this depends on price of house...but look on the lenders websites the information is usually there).

You'll need to think about moving. Do you need to rent a van? What about furniture? White goods? All these little things soon add up.

You need to add some savings for emergencies, what if the boiler broke? Or other stuff than when renting its not your problem, but now owning the place it is.

firesidemaid

if you are a first time buyer, 'fees' associated with buying tend to be a bit lower.

some mortgage deals may include legal/solicitors fees and survey costs but weigh these up over the cost of the mortgage over the fixed/discounted period.

generally the legal fees may cost from £400-800 +vat - you can choose to use conveyancer or solicitors.

if your property is under £120k there will be no stamp duty.

mortgage arrangement fees depend on the lender/mortgage £400 to £1500 - weigh up the pros and cons and again cost over the 'term'. try not to add fees to the mortgage as you just pay interest on them. likewise put down at least a 10% deposit, or you may have to pay MIP for less - could be £1000 or more.

if you can avoid shared ownership, do so as you still have to pay rent on the bit you don't own - so it can end up costing the same.

again, with most flats there will be service/maintenance charges that can vary from £20 to £100+ per month that include the costs to look after the whole site and may include buildings cover too.

if you do have to go for a flat, don't choose one with a lift - you just have to pay more to maintain and run it! find out what the maintenance costs are before you buy/decide.

there must be a tutorial on here. you sound like you have thought things through and prepared - i'd say go for it!:T

chriss1979

Thanks for the advice guys, Im going to have to work some figures out and see if theres a way I can increase my income to make it easier....

Do you have to have been employed in a job for a set amount of time before you can get a mortgage? I dont want to move jobs and then find out I have to have been there for 6 months or anything before I can arrange the mortgage...

Generali

Don't forget, if you're single, it's unilkely to be worth getting life assurance.

straddie

helping_hubby wrote:

In the southeast we were getting quotes of £2800 (which included £1800 stamp duty which you wouldnt need to pay on a house under £120k).

sazzacat wrote:

if your property is under £120k there will be no stamp duty.

For what it's worth, the threshold is actually £125k.

honeypop

chriss1979 wrote:

Do you have to have been employed in a job for a set amount of time before you can get a mortgage? I dont want to move jobs and then find out I have to have been there for 6 months or anything before I can arrange the mortgage...

I think with the majority of lenders you have to be out of your probation period, if they don't state a certain amount of time you need to have been in a job. With ours we had be be finished probation period (which we had) and they wrote to our employers for a reference to state if the job has a secure future etc...