First Time Buyer

MONEYME

I'm very close to looking for my first mortgage. I'm just waiting for the right time to sell some shares and I will have a decent sized deposit.

The properties I'm looking at are about £240k and hopefully I'll have a 95k deposit. My salary is only about 27k though which could cause difficulties getting the loaned amount I require. I have a good credit report.

My salary should increase significantly in a year or 2 but for now I'd like to get a fixed rate repayment mortgage, probably for 5 years to help manage my money while things are tight at the start.

Can anyone give me advice on the steps to take and in what order or anything else they think would be useful to me. I've done lots of reading but there's so much to take in....

Thanks

Alfrescodave

I see timing could be a problem for you. Whilst you potentially have a large deposit this is dependant upon you obtaining a good price for your shares. Worse case scenario could be that you find your ideal house but share price is low so limiting size of deposit and size of mortgage.

My advice would be to realise the cash from your shares, then put it in an accessible account so that you can buy your property. Only sensible if share price is acceptable - only you can make that judgement.

Obviously if you intention is not to buy a property for several years then better option might be to keep shares - who knows the future markets.

rickydark

I was in a similar position as yourself at the start of the year. I was ready to move around January and was looking to sell up then. We'd viewed quite a large number of properties and had what we wanted in mind.

BUT I was advised, only sell when your putting forward an offer somewhere (as the shares only took a week to physically be in my account.) I chose to do this in March and in the space of 2months the share price peaked and had risen to give me an extra 2K.

If you were in the position where the shares were borderline with what you needed to buy, Id say sell when the price is right. But because you have a considerably large deposit, Id hang on to them.

Also don't forget to budget for Stamp Duty and fee's.

Goodluck.

Alfrescodave

If you haven't already done so, I would recommend you enquiring as to how much companies would be willing to lend you. With a salary of £27K and a £95k deposit, is it likely that you can afford to buy a £240k property?
You can then factor in how much you could afford to let your share price fall before you needed to sell in order to still buy the property you wanted. Hopefully your shares will rise but you need to consider worse case.

I'm no mortgage adviser but in your position I would certainly be finding out what is a realistic mortgage offer from the "experts".

MONEYME

Alfrescodave wrote: »

I see timing could be a problem for you. Whilst you potentially have a large deposit this is dependant upon you obtaining a good price for your shares. Worse case scenario could be that you find your ideal house but share price is low so limiting size of deposit and size of mortgage.

My advice would be to realise the cash from your shares, then put it in an accessible account so that you can buy your property. Only sensible if share price is acceptable - only you can make that judgement.

Obviously if you intention is not to buy a property for several years then better option might be to keep shares - who knows the future markets.

I'm looking to buy a property the latter part of this year/ early part of next year. I'm just about even on my shares at the moment but was/am expecting some sort of profit.

All the rest of my money I have got in easy access accounts at the moment just waiting on cashing out the shares.

MONEYME

Alfrescodave wrote: »

If you haven't already done so, I would recommend you enquiring as to how much companies would be willing to lend you. With a salary of £27K and a £95k deposit, is it likely that you can afford to buy a £240k property?
You can then factor in how much you could afford to let your share price fall before you needed to sell in order to still buy the property you wanted. Hopefully your shares will rise but you need to consider worse case.

I'm no mortgage adviser but in your position I would certainly be finding out what is a realistic mortgage offer from the "experts".

Thanks. I'm pretty sure I could get a £120k mortgage but would need closer to £140k.

Can I just call a bank and tell them my situation and they can tell me the maximum they are willing to lend me?

Wh05apk

Realistically the most you will get is 5x income, so about £135,000.

At this level, you would do best speaking to a broker, banks will only tell you by doing an aip, everytime this is done it will leave a trail, the chances are most banks will not give you enough, hence why you need to speak to a broker who will advise you of the best option.

paulmapp8306

Again - Im no expert but I got some ideas of what I could borrow based on my £38k income - and it was between £140k and £160k.

Based on that I dont think you would get what you need with £95k deposit. Hopefully your shares will rise enough - or you need to look at a £200-£220k house.

You need to talk to a specialist advisor on this I think.

MONEYME

I think you're right. I was hoping because of my deposit amount that would help but I'm getting the impression that is not the case. Might have to hold back for a few more months. I'm definitely going to have a chat with a broker very soon though.