Clueless about buying... Help please...

Lovelyjoolz

If I were you I'd take £4.5k of that £16k savings and clear the CC & the graduate loan imediately. There's no point having savings if you are paying out interest on loans.

Then I would plough as much as possible into savings between now and February and see how much the deposit is then.

If you can get a 20% deposit you will get a much better mortgage deal. And I mean MUCH better.

Do you have an idea of where you want to live and how much the house are in that area?

darren_5

Thanks for all the great advice.

It is clear that we need to work on the cc and loan before doing anything else. I am slightly concerned as the reason we havent been saving loads is because of the gift from our parents which will cover the deposit. I didnt know we had to show we saved for the deposit etc!

In April we need to decide if we sign for another 12 months or not. There was a chance of buying the property we are living in but by the looks of it in April it probably isnt realistic. I know our landlord previously accepted 150k for the property but this fell through hence why he let it out.

Darren

Lovelyjoolz

darren_5 wrote: »

The 16k is going to be given to us by my partners mother, then the 5k is possibly given to us by my parents. So, my parents want the money back but thats just a personal family commitment that i pay them back as and when i can. Does the lender got to know this?

Sorry - I took an inordinate amount of time over my reply and you posted this whilst I was writing.

I agree with Firefox - if you haven't managed to save anything yourself at all, you're a long way off hone ownership.

Fire_Fox

darren_5 wrote: »

Thanks for all the great advice.

It is clear that we need to work on the cc and loan before doing anything else. I am slightly concerned as the reason we havent been saving loads is because of the gift from our parents which will cover the deposit. I didnt know we had to show we saved for the deposit etc!

In April we need to decide if we sign for another 12 months or not. There was a chance of buying the property we are living in but by the looks of it in April it probably isnt realistic. I know our landlord previously accepted 150k for the property but this fell through hence why he let it out.

Darren

If you do not sign a new fixed term AST you will automatically go onto a statutory periodic tenancy, you do not have to sign another fixed term agreement. Letting agents will often try to pressurise you into signing a new AST because they get an admin fee for doing so, few landlords will serve notice to quit on a good tenant just for not committing to another year.

You might be fine with the gifted deposit if you have no debts AND money for legals, survey, mortgage application, money for one sale to fall through, removals, three months mortgage payments, money for repairs, redecoration and furniture. That all adds up to many thousands of pounds - maybe aim for September when your contract renews?

Do you know where every last tenner of your income goes every month? If not go though your bank statements and complete a statement of affairs and post on the Debt Free Wannabe board for comments, then start a spending diary. You might be able to pay off those debts quicker than you think. http://www.stoozing.com/msoc/soacalc.php

drummer_666

darren_5 wrote: »

Hi Drummer,

Many thanks for your reply.

So you would say concentrate on the credit card first and then the graduate loan? What is the chances getting a mortgage with a grad loan As while we maybe able to clear the credit card it would be a little harder to clear the 3k one quickly.

I also have a credit card but cleared the 1.5k off it so it is currently at £0. Is it worth closing it or keeping it open?

darren_5 wrote: »

Hi Drummer,

Many thanks for your reply.

So you would say concentrate on the credit card first and then the graduate loan? What is the chances getting a mortgage with a grad loan As while we maybe able to clear the credit card it would be a little harder to clear the 3k one quickly.

I also have a credit card but cleared the 1.5k off it so it is currently at £0. Is it worth closing it or keeping it open?

I have been in my role 8 months, my partners wage is around 16k and she is permanent.

Darren

I would say clear the credit card first. You should be able to get a mortgage with a grad loan but prob not for as much and prob a slightly higher interest rate, but talk to a broker as they will be able to help

I'd keep your credit card that is clear, it's no harm. If your credit score is low you can always start using your credit card but make sure you pay it off in full every month.

Fire_Fox wrote: »

You need 10% PLUS legals, survey, mortgage application, money for one sale to fall through, removals, three months mortgage payments, money for repairs repairs, redecoration and furniture.

I disagree. You don't need three months mortgage payments in savings. I have got income protection insurance. If I'm sick or lose my job I can claim enough money to cover my mortgage and bills and a little bit of spending money for up to 12 months. That can take a few months to kick in, but you can start it Jan/Feb for peace of mind, unless you know you can borrow from family if worst comes to the worse.

However it's sensible to have a few hundred saved up for an emergency.

My legal fees, mortgage application and full structural survey cost £1,800ish and petrol money to move. Anticipate a little more. And yes bare in mind you may pay for a survey and then decide not to buy the house, so that's another £400-500 you may need.

You can get most furniture off freecycle or eBay (I got oven, dishwasher & brand new hob for £130ish off eBay)

Fire_Fox

drummer_666 wrote: »

I disagree. You don't need three months mortgage payments in savings. I have got income protection insurance. If I'm sick or lose my job I can claim enough money to cover my mortgage and bills and a little bit of spending money for up to 12 months. That can take a few months to kick in, but you can start it Jan/Feb for peace of mind, unless you know you can borrow from family if worst comes to the worse.

However it's sensible to have a few hundred saved up for an emergency.

Reread posts 4 and 6.

You cannot get income protection for a temporary/ fixed term contract AFAIK, if you can it is likely to be prohibitively expensive. Not all income protection is worthwhile, depends how the payments are made whether the state recognises it as income and downgrades any means tested benefits accordingly. Support for Mortgage Interest kicks in at three months, it's the first few weeks that are critical to avoid arrears and black marks on your credit file.

drummer_666

Fire_Fox wrote: »

Reread posts 4 and 6.
You cannot get income protection for a temporary/ fixed term contract AFAIK, if you can it is likely to be prohibitively expensive. Not all income protection is worthwhile, depends how the payments are made whether the state recognises it as income and downgrades any means tested benefits accordingly. Support for Mortgage Interest kicks in at three months, it's the first few weeks that are critical to avoid arrears and black marks on your credit file.

His gf is on a permenant contract though. You can get income protection that is nothing to do with a mortgage. So if you start it in Jan and don't get a mortgage til April you're covered right from the start of the mortgage.

I do agree with getting a few hundred quid saved at least, but you don't need 3 months. Esp when he has his family to fall back on