Savings - How much to use for deposit?

dimbo61

Have you looked at offset mortgages ! Very popular on the Mortgage Free board for a reason.
If you bought a property for £250K with £100K deposit then you can get the best deals on the market.
keep the £30K in either cash ISA,s or in the offset account as your emergency funds
Only my views but well done on saving such a good deposit with LOW interest rates
Buying a house is only the start and other costs will clear your savings if you are not careful!!

angrypirate

Tom2001 wrote: »

I guess it really depends on whether I look to buy a flat or a house.
I'd prefer try to step on the ladder slightly higher and aim for a freehold house.

Probably looking at somewhere in south east London, where I guess I'd be looking in the region of 220-250k.

I think you need to do a little planning. Create a spreadsheet with all your knowns and put in guesses for your unknowns. Get an idea for mortgage rates and include a calc to give you an idea of your repayments. How does this compare with your income.
Also you should allow something like
1200 for Conveyancing and searches
1000 for Mortgage provider fees
800 for survey
Nothing for stamp (below threshold if you get your finger our)

Now you should look at mortgage deals. Are you better off putting nearly all of it down, having a smaller mortgage but no access to capital. Do you need access to capital? What about putting a smaller deposit and maybe going with an offset mortgage. Slightly higher interest rate but you would have access to the capital. If you buy somewhere recently modernised you may not need access to the capital for a new bathroom / kitchen. On the other hand you may get a bargin with somewhere "in need of modernisation". Ive looked at both and in the end im pretty much using all bar 4k of our money in fees + deposit. That 4k will pay for carpets, furniture, washing machine etc.

Clearlier

angrypirate wrote: »

1000 for EA fees

Buyers have to pay the EA?

Devi

Wow OP - well done for saving such a good amount - it must have taken a lot of hard work and discipline.

Will you still be able to save after buying a property - i'm sure you'll build up some reserves for your future plans/emergencies.

Personally, I would put £100k for the deposit, spend around £15k on fees and furnishings and hold £15k back as savings. You'll be able to get really good mortgage deals based around a 40% to 45% deposit.

Good luck - i hope you find the place of your dreams.

SD

hazyjo

How long did it take you to accumulate those savings? You said years... but what other sorts of expenditure did you have? Rent?

If you think you can still save and have large bonuses, or substantial payrises predicted for the future, I'd put down as big a whack as possible, leaving a 'buffer', and enough to cover fees. If you've saved up that much in any period of time, the chances are you'll always manage to save something! Doesn't seem like you're gonna use all this, then never save anything ever again.

I suppose it also depends on how much you can borrow (dependent mainly on what you earn) and how much percentage that £100k or so would be.

What age (range) are you?

I'd also be tempted to use £100k as a deposit.

Where would you be looking to buy? Would you be able to buy freehold, or would it be leasehold?

Jx

angrypirate

Clearlier wrote: »

Buyers have to pay the EA?

Sorry - that should have said mortgage fees. Will edit post now

BitterAndTwisted

Buy a freehold. Buy a freehold. Buy a freehold.

Use £100k as deposit and look into this offset lark. I'm convinced that in the long-term a freehold makes more sense than eye-watering service-charges. Plus you have the freedom to choose when you do repairs or refurbishing or similar. Get a nice three-bed and you have the choice about whether to have a pal move in with you or take a lodger if you're rattling around on your own or need the income at some point.

Using all your savings when you've had that large sum as a buffer in case of emergencies has been a security for you even if you've never had to dip into it in the past, It will be a very different felling to have it all gone. But that depends on how long it might take for you to build up another buffer.

Where's that commuting website where you put in the main-line stations you need to arrive at and work out your max commute time. All sorts of unexpected places could turn up, some of them comfortably in your price-range and actually where someone would want to live.

poppysarah

How long has it took you to save? Have you really pushed yourself saving or are you well paid?
Might be worth having a few months binge saving and then you'd have even less to worry about.

LittleMissAspie

How much you need in the bank depends. Do you own your own furniture already or do you need to start from scratch? Mattresses, sofas and white goods are expensive even at the cheap end of the scale. Will you buy somewhere that needs work or somewhere quite new? Are you going to need to pay stamp duty, I forget what the rules are now.

We kept £5k for costs and had money left over but we already had most of our furniture. We didn't pay any stamp duty.

We keep a £3k fund for emergencies and save £200 a month towards decorating and furnishings. Our house doesn't need any work, just prettying up, am planning to replace the bathroom in a few years though.

I would totally recommend an offset mortgage if you are good at saving. Our interest is about £90 a month cheaper with the offset, and rising.

BitterAndTwisted

South-east London may not be the only option. Before I moved to Nawf Landahn I was a West London gal. Over this way places like Walthamstow "Village" in the conservation area and Wanstead have some really attractive spots and the commute times can be a half hour or so depending on where you work.