Mortgage advice, Couple Questions

Wayne-_2

Hi, im looking into getting a mortgage within the next 2 years, hopefully sooner.

Im 21,
I earn 23k PA
I have savings of around £5,400

My questions.

1. Is it possible to take out a loan from lets say, Tesco personal loans to bring my 5.4k up to around 8-9k so i have a 10% deposit? (houses are around 75-89k in my area) - or do banks reject you if you do that?

1b. Or is it possible to get 95% mortgages? Ive heard mixed answers.
(on any home, not just new build. I am aware of the government scheme)

2. Should i save for a few more years and build up my savings instead of looking now?

What do you think, looking forward to hearing back.

wierddumpling

Alot of your current savings will be taken up in fees eg solicitors, surveys, mortgage arrangement fees, mortgage broker (if you use 1) etc. Also mortgage lenders will take the loan repayments into account when accessing your afordabilty.

Do you live at home? If you do you can always use the oportunity to keep saving for another year or 2. Also don't forget money for furniture/white goods/decorating etc.

Also check out your credit score to see if that needs boosting.

Excited13

Mortgage lenders question where deposits come from and also do credit checks so they will work out that part of the deposit is coming from a loan.

Moving house is very expensisve you need to consider solicitors fees, removal companies and utilities. Do you already rent and therefore have your furniture? If not furnishing even a small house/flat can be costly.

In relation to 95% mortgages there are meant to be some on the market or due to come on shortly but I am not sure of the criteria.

Personally I would suggest you carry on saving for now but everything is down to personal circumstances.

Good luck with whatever you decide to do.

bigadaj

Carry on saving, you should be able to save what £500 per month, so be six grand up ina years time. Ideally want slightly over a 10% deposit, so say nine grand, allow three grand for fees and the. You want some to buy basics, bed, sofa etc

On that basis possibly start looking seriously in a year with an aim to buy a few months later.

Do you have any current credit, adverse or good, probably worth getting your stutaory credit files in the nxt few moths just to check there's nothing nasty on there, from experian, equifax and call credit/ noddle.

Wayne-_2

Thanks for your replies.


To answer some above posts;

1. Private renting paying 450PCM ( since 18, soon to turn 22 )
2. Have furniture, when i moved in it was unfurnished
3. Have no idea about my credit rating, Ive never took out a loan as Ive never needed one, my wage more than covers everything.
( Rent, Bills, Car insurance/Petrol & Food ....)

Worked since i left school at 16, 5-6 years in the same job

After a few days thinking, i think it would be best to save and get more than enough funds to cover a 10%+ deposit and all the fees.

:j

bigadaj

Might be worth getting a. Credit card, and using it for day to day spending, paying back every month. This won't cost you anything and will build up your credit file, which might be thin without it.

Thrugelmir

Have you looked at the lenders saving schemes for FTB's? Such as Halifax or Nationwide. Regular saving with an institution is a good way of improving your credit score. As they can see first hand your ability to manage money.