FTB - Advice needed....

mystery07

Hi guys,

Im a 22yr old single Mother, work part time & studying towards a part time degree. More & more so, considering our future now, as i start to think about 5 & 10 year plans....

High on my list of priorities, is to get a mortgage (I live in a privately rented house currently) mainly, as a mark of security....

As, I see it, im not in a positon to go out & get a mortgage tommorrow, but I dont feel like I want to wait until my degree has finished....I will be free of debt, this year & next year & year after, I intend on saving at least £2/3 thousand per year...Which would give me about 6K, would this be a large enough deposit? In 1/2 years, I will probably be still on fairly low paid job that I am now...however, I manage £475 Rent per month now, so see no reason why i couldnt afford a mortgage?!

Is this do-able? Do i need to save more? Will my low paid job get in the way? Is there anything I can do to make it easier? Or am i simply being unrealistic, wanting a mortgage, at my age?

Can anyone offer some kind of advise, so i can start to plan?? Anything, would be gratefully recieved...........

Also, 1 other question...What do people think will happen to house prices in the next two years, go up/down, stay the same?!

XxX

Ian_W

It does look awfully tight I'm sorry to say. Depends on what house prices are like where you want to live though.
£475pm for a repayment mortgage at 5.5% over 30yrs would mean you could borrow about £83K. Your £6K deposit [don't forget you'll have legal fees, survey and probably mortgage arr fees of the thick end of £1K+] would mean your max on that basis is c£90K.

I applaud your ambition but would just caution you that all mortgage docs include a phase to the effect that "your home may be repossessed if you do not keep up the repayments" - but it goes even further than that as your credit history would be trashed for years afterwards.

I do wish you luck with it but don't put your future [and that of your child] in jeopardy until you're sure you can afford to buy. 22 is fairly young, you have a lot of life ahead of you. BoL.

Headintheclouds_3

It's always good to have a goal, but even if you can afford the mortgage there are all of the other costs associated with owning your own home - buildings insurance, life insurance (if you don't have it already), repairs to the property...

It sounds as if you're doing a great job planning for the future anyway by studying for the degree which, hopefully, will increase your earning power - so why not keep adding to that deposit/fees pot until you've finished studying, your child(ren) are a bit older and you have a full-time job?

Just my 2p - good luck!

mystery07

Thanks guys, will spend some more time thinking about, & try & save some more....The problem with waiting until my degree has finished is that, that is another 5 years away & the job, Im considering now, will add another 3 years training to that, so Id be looking at 8 years at least, then I expect, the "bank" would want me to have worked for that employer for a period od time too!

Didnt think to much about the other costs, I imagine buildings insurance is quite expensive too?!

Well, 8 years worth a saving, would give me a large deposit.

Thanks again

XxX

Phirefly

To give you a comparison, we also pay £475 p/m rent. We have just had an offer accepted to buy our rental property and with a 5% deposit we will now be paying close to £800 a month in mortgage repayments for the same house.

We have many sound reasons for doing this which I won't go into now, but what I'm saying is that to buy a property anything remotely like what you're renting it could well cost a you a lot more a month in mortgage repayments. This is obviously going to depend on whereabouts in the country you are but its worth bearing in mind.

If we had the option to continue renting I may well have done as I was able to save hard. These days a mortgage isn't a mark of security, its just a MASSIVE debt, in effect, the bank owns the property not you. Renting is not a second rate way to live, it can be cost-effective and practical. I agree with the others, with your degree, your earning potential will rocket and you'll have many more options.

Good luck

Headintheclouds_3

mystery07 wrote:

Thanks guys, will spend some more time thinking about, & try & save some more....The problem with waiting until my degree has finished is that, that is another 5 years away & the job, Im considering now, will add another 3 years training to that, so Id be looking at 8 years at least, then I expect, the "bank" would want me to have worked for that employer for a period od time too!

Oh, I know - I quite empathise! I'm 33, have been saving for a deposit for about 5 years and have seen house prices go up and up and up during this time, but there's just no way (with a smallish deposit, large student and credit card debts and no spare cash for things like repairs) I'd have been able to maintain my own house before now.

Now that I am at the point where I am on a reasonable wage, have a modest deposit, and my debt is almost gone, I'm finding it difficult to find a suitable place to buy *but* I still believe that waiting was the right thing to do and once I do buy somewhere I'll be able to enjoy it without fretting about the cost.

Good luck!

mystery07

Thanks guys.......Suppose I realised that mortgage payments would be more, however, I will have some extra money, once my debts are cleared this year......

Anyway, Thank you all for your brill advise! I wonder If we'll all still be posting on here in 8 years time?! :rotfl: Then i can tell you all about the mortgage im about to get :j

XxX