HELP! Buying My First Home; where to start?

firsttimehomebuyer

Hello guys,

My work collegue, an avid MSE advocate has recommended I come here to seek help.

I would like to try and buy my first home, although I dont know where to start, and if in fact I even earn enough to do so:(

My situation is a little uinque, and I do not have too many people in life to seek advice from and help with this so any insight and advice would be fantastic.

I am 28, and have a £20k deposit (no debt). I would love a 1/2 bedroom flat in the Glasgow area (i am unsure if this is relevent).

I have an excellent credit rating of 999 having recently checked experian, and I am always excepted for credit cards etc with scarily high limits.

I on paper only earn £13k per year, being paid by the hour so my wage differs slightly every week. I have a little ebay type sideline which makes me about £5k per year, and I also live incredibly cheaply with few outgoings hence why I have been able to save £20k in 3 years.

I would love a mortgage of 5 or 6 times my on paper wage, to able to purchase a decent sized place. Is this a possibility?

There is schemes here in Scotland that help people with low or no deposits buy, however I do not know of a scheme that helps low earners with good deposits.

As for a mortgage, I have no clue as to how on go about this. Banks directly? Mortgage advisor?

Thank you

dawyldthing

the max you will be possible to get is around 4.5 times your income, but they are few and far between. Could you move to the outskirts and buy a small house as houses are generally easier to sell in the end and if on the outskirts may be cheaper to buy in the long run too.

dimbo61

House prices in glasgow have fallen recently I noticed a few days ago BUT that does not mean that anyone selling has any idea of what there home is really worth in todays market.
Where are you living now ? can you save more and build up your deposit !
What are you looking to buy ? most big cities have lots of flats with houses much more expensive
Future plans ? marriage ? kids? job + Job security ? staying in glasgow long term ?

firsttimehomebuyer

Is 4.5 really the max I can expect?

Thanks

firsttimehomebuyer

dimbo61 wrote: »

House prices in glasgow have fallen recently I noticed a few days ago BUT that does not mean that anyone selling has any idea of what there home is really worth in todays market.
Where are you living now ? can you save more and build up your deposit !
What are you looking to buy ? most big cities have lots of flats with houses much more expensive
Future plans ? marriage ? kids? job + Job security ? staying in glasgow long term ?

I am living with parents, although I do pay rent and living here has only helped slightly with my deposit savings. I am keen to move soon, buy ideally as I dont want to be in a rent trap.

No plans for marriage or kids in the near future. My job is very secure and I of course hope on bettering this paltry wage, although at the worst case scenarios I want to plan around what it is at present.

I feel that if I save more of a desposit, it will only help slightly. It should be, or close to being 25% of what I hope to purchase, so surely a greater desposit will not effect the amount I am able to borrow??

Thanks

arbrighton

firsttimehomebuyer wrote: »

I am living with parents, although I do pay rent and living here has only helped slightly with my deposit savings. I am keen to move soon, buy ideally as I dont want to be in a rent trap.

No plans for marriage or kids in the near future. My job is very secure and I of course hope on bettering this paltry wage, although at the worst case scenarios I want to plan around what it is at present.

I feel that if I save more of a desposit, it will only help slightly. It should be, or close to being 25% of what I hope to purchase, so surely a greater desposit will not effect the amount I am able to borrow??

Thanks

A greater percentage deposit is likely to give you better rates, and make you more attractive to lenders.
In the eighties, 5 or 6 times your wage was small beans for a mortgage, and part of the reason for the mess we're all in now with masses of people of negative equity and over inflated prices.
Interest rates are only going to go up, so your repayments will increase dramatically at some point.
How can you know your job is secure? Also, I very much doubt your EBay sideline will be counted so you are looking at 4 x 13k, i.e. 72k, plus your 20k deposit, although bear in mind you need to leave money for conveyancing, moving, furnishing your place, buildings insurance, utilities etc.

arbrighton

Also- read up on the process from viewing to offer to exchange and completion. I cannot comment on how it works north of the border but you should become au fait before even considering buying.

And keep saving

katejo

firsttimehomebuyer wrote: »

Is 4.5 really the max I can expect?

Thanks

More than that and you would be seriously stretched, particularly if the interest rates return to normal levels (about 4-6%). In the time that I have had a mortgage (most of the time since 1993) my mortgage has never been more than 3 x my income but that is enough. Once you combine the mortgage with additional costs like fuel, council tax, insurance etc., you will find that it uses up at least half your month's take home pay (more for 4.5%).

pazza2000

I am in a similar situation. I think x 4.5 is the absolute maximum mortagage you can hope for I am afraid.

firsttimehomebuyer

What is the paperwork required by a mortgage mender when assessing your income, and more importantly how much they can offer??

Thanks

brit1234

firsttimehomebuyer wrote: »

What is the paperwork required by a mortgage mender when assessing your income, and more importantly how much they can offer??

Thanks

3 pay slips and a P60 is usual from my dealings.

Just cut your out goings, work as much overtime as you can, forget 2012 holiday and spend a year saving. Prices will start falling consistently in a couple of months.

Goodluck