first time buyer questions

krazyburd23

Hi Guys,

I have read a billion threads and websites etc so please don’t shout at me if I ask something you've answered already. I am just looking for an honest opinion based on my situation, be as brutal as you like (in a nice way of course ).

Me and partner are really keen to buy our first home. This is the situation we are in at the moment.

Me – Full Time employment, annual base salary is £25k (I have been in this company 6 months now, hope that is enough – I was made redundant before this, I’m not a job hopper ).


Partner – Self employed, average over the last 3 years works out to be £10k PA (he only started 3 years ago so his first couple of years were very low, he has increased each year though)


Deposit we have saved - £50k


Debts/Loans – Me = Nothing. Partner = Nothing apart from in his early days, he did a couple of years at Uni before giving it up so has an outstanding student loan from this period. His salary hasn’t gone high enough yet for him to start paying it back, so hasn’t paid any back. Do they use this as part of their calculations?


We are both hoping to have saved another £10k between us for fee’s, a small buffer etc etc by the time we come to move. We don’t want to move and have £0 in our bank accounts.


I would like to stay in my current area but unfortunately the prices are fairly high. It will be about £160k-£165k for a small 2 bed property which will probably need work.


Do we actually stand a chance? I have used some of the comparison sites and calculators, when I do it on me alone it gives me a selection of results (although the lending is £10k short of what of would need to borrow so it’s not really any good). When I add my partner to the mix, there doesn’t seem to be anything on offer for us.

Should we think about proceeding using just my income?



Also, they say they would need 3 years of proof of his accounts, what exactly does this mean? (he is a nightmare with his filing, I would like to make sure I can find all the documentation they need before we go through the whole process to find he has thrown something important away _pale_).

I just want to know is it worth it or do we need to carry on with the saving for even longer? We are desperate to move but I would like to know now if we are potentially setting ourselves up for a fall, I will be gutted if we can’t get out of here after so many years of scrimping and saving but would prefer to know before I go through the whole process!!

Thanks Muchly,
Lea

ACG

3 years accounts if ltd company and or tax returns if not.
Maybe look for a lender who only needs 2 years accounts? This might boost his average up?

With a £50k deposit, i think a purchase price of £160-165k is possible yes. It might be worth speaking to a broker though.

krazyburd23

Ok, thank you He isn't a ltd company so its going to have to be tax returns. Do they just require his letter from the tax guys confirming his tax payments or will they need all his workings out and receipts etc aswell? (Sorry, being an employee all my life I have no idea about the self employed thing and when he is working on his tax return I tend to stay well out of his way :eek::o )

I think I'd prefer to use a broker, I have found one local one but will be asking my friends and family for recommendations too

Dave_Ham

Do use a broker on this case, although I think you should be fine.

Worth him ordering his SA302's as typically this is what a lender will now require, although some are still happy with an accountants certificate (depending upon accountant qualification)

Keep asking any questions, it is a difficult process but being on here asking and a local broker will help manage it for you.

All the best

ACG

As Dave says SA302s are what he will need to satisy a lender.
Get the last 3 years anyway but some lenders will be happy with 2.

krazyburd23

Thank you guys, this is so helpful, I really want to get everything in order before we get the ball rolling.

I will have a look through the cupboard to see if he has any of these SA302's and will talk to him about ordering some if he doesn't have them. As far as I know he does all his own tax returns, I am not sure he uses an accountant, is that bad? :eek: (I could be wrong of course)

I really appreciate your help, there is so much to understand, thank you.

With regards to a broker, the local one I have found charges either a fee or commission. Do you have any ideas of the kind of figures/percentages I should be looking at for either of these services? I don't mind paying for the service but want to make sure they are competitive

Dave_Ham

Have a chat with the specific broker. The fees should always be totally transparent and it will depend upon the broker fee structure.

Some clients are hell bent on getting the service fee free and then will use a less experienced broker happy to do this, which may cost them double over the fixed term vs what an independent broker would have got the client in terms of products.

Ask the broker, I personally always have the fee conversation upfront so the client recognises the difference, understands the difference and gets a view on what you get for this...

Good luck

krazyburd23

Thanks Dave, i'll give them a call and suss them out :-) I'll try and find some others to compare them with but from the searches I've done all the others are not that local. They have testimonials on their website but they seem quite 'personal' which of course is very nice but it did make me feel a bit weird reading them (sorry if that sounds mean, I have no issues with showing that you're grateful but to smother it in kisses to me seems a little odd :-) )

Thanks Essa too, I hadn't even thought of that, I don't remember a probation period in my contract but i'll check it out. I'll have completed my 6 months next week, so hopefully by the time I get things in order it wont be an issue. Will add it to my list of things to mention to the broker in case there are certain lenders that would be funny about it :-)!

I have even more worries now too, I just saw another thread about proof of deposit which has set me off!!

My 25k is made up of 10k savings and 15k redundancy money (hopefully straightforward enough to prove)

Partners 25k is made up of 12-13k savings across a few accounts and wait for it the rest is in his betfair account as he made it by trading odds...bet they'll have a field day with that :-(!

Why is nothing with him ever straight forward lol :-)!

This place is so valuable for questions and answers and experiences but I think its going to cause me lots of sleepless nights :-)!

Dave_Ham

Engage a decent broker and this stress will be taken away.

Definitely move the money from the Betfair account as that will not be well received by a lender.

Testimonials are worthless on a website, they are usually just made up as they are not verified.

You cannot beat having a chat with someone and taking a view.

This forum is great, but just remember people tend to come on here with an issue looking for help. You therefore see all the bad cases and decisions, where are the many people who get a mortgage in a straightforward manner have no need for specialist help.

All the best