FTB help. I don't know where to start!

TooDee

Hi all, I think I need some guidance.
I've recently been made redundant and haven't had any luck finding anything new to do yet other than some temporary bits and pieces.
My boyfriend earns about £18500 including bonus' and overtime. Hes been in his job for at least 2 years maybe closer to 3 now.

I've inherited some money that should give me a nice deposit on a house. I think about £38000.
Based on my boyfriends earnings it looks like (looking at various websites) he could get a mortgage of around £75000. He doesn't have debts or loans and his credit card has only been used to book holidays then paid straight off. We are both currently living at our parents houses while I look for employment and we decide what to do.

What do we do now? I've never even had the opportunity to look at buying my own house before (I'm guessing as the mortgage would be based on his earnings it would be his house?) i'm not sure where to start. Do we go and talk to mortgage brokers or should we go look at houses!

[Deleted User]

It won't hurt to talk to a mortgage broker. Make sure to look for 'whole of the market' and 'fee free' brokers. If you can get a 'mortgage in principle' it helps when house hunting (as people know you're serious)

Here's a guide on buying houses.. http://www.rightmove.co.uk/resources/property-guides/buying-guide.html

motherofstudents

As above. But it will do no harm to look at what is available in the area you want to live. By this I mean, look on rightmove, make a shortlist and then go and look at the outside of houses. There is nothing to stop you viewing houses but it does seem a bit unfair at the stage you are at. Also, the house can be in joint names. You are paying the deposit remember so you certainly want a stake in it. Hopefullly you will fnd a job soon which will also help. Once you get your mortgage in principle then you can get out there and have a good look.

Beckyy

It's a fantastic boost to you to have this money but think very, very carefully.

How much you can borrow - You will need to go on your bf's standard pay, how much of the £18,500 is bonus/overtime?

Mortgage companies dont usually let you borrow on 100% of overtime or a bonus, they will usually take a % of it though. Some websites are also a bit behind - the amounts you can borrow are no longer based on a multiple of your salary but now on affordablity. I would really consider going to see an independant financial advisor (not one in a bank!) and ask for some advice. Borrowing £75,000 looks much higher than what I would expect or even like to consider doing on that salary.

You don't mention if you have any debt?

If you are intending to buy a house in joint names, then you will need a joint mortgage - which may be difficult if you're not working at the moment. I would NOT recommend 'giving' your boyfriend the deposit so that you can get a mortgage/house in his name because it does not cover you at all. If you split up he then gets to keep your £38K.

I would wait until you've found a job and then buy a house together in joint names, with a joint mortgage. Put your inheritance into the best interest account you can find until then.

poppysarah

I would also suggest renting together somewhere first.

TooDee

About £2000 of his pay is bonus or over time.
I have a little debt £1500 in a loan and overdraft which I will get rid of as soon as I get the money and this is not included in the £38000.
This is partly why I thought it would be better if it was in his name. We are talking about marriage and probably babies soon too so would I then be able to put my name on the house when we are married? We've been together for 5 years and have lived together for most of that. I have no problem with giving the money over to him. I know if anything bad was to happen he would give me every penny back. I know this sounds risky but i've never met a more trustworthy and honest person in my life.

I will not go back to renting i'd rather live with my parents for another year than waste money renting again. I rented from 18-30 and moved so many times I'm done with it.

We have looked around a bit as to what might be available for us and it seems that we would be able to find something based on just his wage. I'd rather do this so I know we can afford to have one of us out of work if the worst happens (like now) afford to have kids and afford to pay off more of the mortgage if both of us are working full time.

[Deleted User]

If you are putting in 38k, you really should be on the deeds to the house also. Both of you should be.

Ideally you should wait until you also have a job, as this would increase the amount you could borrow (and pay off that debt)

Tixy

TooDee wrote: »

I have no problem with giving the money over to him. I know if anything bad was to happen he would give me every penny back. I know this sounds risky but i've never met a more trustworthy and honest person in my life.

As long as you understand that you would be giving the money to him. Permanently. Legally.

Its not just about him being trustworthy, supposing he dies without a will - you will get nothing.
Supposing he loses his income for some reason (loss of job, ill health etc and has to go bankrupt) - you lose everything.
Supposing in some way someone has a claim against him - the house would be his asset alone.

It would be madness to do this really, no matter how trustworthy you think he is. And it shouldn't be hard to do things differently to ensure that your name is on the deeds of the property.

TooDee

ringo_24601 wrote: »

If you are putting in 38k, you really should be on the deeds to the house also. Both of you should be.

Ideally you should wait until you also have a job, as this would increase the amount you could borrow (and pay off that debt)

I will be paying off my debt as soon as I get this money. Who knows when I will get a new permanent job I'd rather be rid of the debt and not have to worry about how I'm going to pay it off while I'm unemployed.

Although I am still permanent job hunting I'm quite happy doing occasional temporary work its bringing in enough money to help pay bills and give me a little extra so i'd rather hold out for a job I want to do rather than doing something for the sake of it.

kingstreet

You need to apply for a joint mortgage on a jointly purchased property.

Lenders will not be happy with a deposit coming from someone who will live in the property who is not a party to the mortgage.

Besides which, not owning part of a property you are putting all the equity into strikes me as financial suicide.

SuzieSue

TooDee wrote: »

I have no problem with giving the money over to him. I know if anything bad was to happen he would give me every penny back. I know this sounds risky but i've never met a more trustworthy and honest person in my life.

You must not do this. I am sure he is trustworthy, but there are too many things that can go wrong. You need to protect your interests and make sure that you will get this money back should anything happen. Before you do anything, you need to see a solictor on your own.