Advice/Tip - FTB relatively strong financial position

rjg18

Hi All,

I am currently buying our first house, having rented for the last 12 years. I believe we are in a relatively strong financial position, but would be interested in any advice/tips on how to make the most of this.

We have had an offer accepted on a house at the weekend for £340,000 (Freehold, not new build, detached).

Current position is:

Income: ~£175,000, consisting of:
- Salary: £103,200
- Annual Contractual Bonus: £37,600
- Income from Share Options: ~£35,000

Deposit:
- £65,000 available cash (from savings + parental gift), for deposit, stamp duty, fees, etc. However I would like to only spend £34,000 on deposit (90% LTV)

Credit History:
- Good credit history, no adverse
- Experian score of 979/999 ("Excellent")
- No current credit cards, but have an Amex charge card.
- Only loan is a personal loan used for part of the balance of two cars, outstanding balance £23,000, repayments £422 per month.

Ideal mortgage:
- Repayment, fixed rate for at least five years, under 4.9%. Looking to pay not much more than £1700 a month.


Would be interested in any tips. Particularly around income - is income from shares taken into account? Does it complicate matters, and should I just leave this component of income completely out of any applications, as I think the multiplier is low enough without this anyway.

Other question is - I'm currently a Barclays Premier customer. Some banks offer better deals in conjunction with their premier account. Does anyone have experience of this? Should I be approaching banks to discuss moving my current account + other accounts into their premier scheme as part of a mortgage application?


many thanks in advance.

R.

Jimbo1976

You should not need to reply on your other income but you should disclose it as it will presumably appear on bank statements etc

Barclays do offer some slightly cheaper rates to current account customers. But at a quick glance I could only see one 4 year fixed at 90% which was at 6.19% which seems to be a lot higher than you expect to pay

Is there a reason you don't want to use more of your cash for the deposit? The lower the loan to value the better the rate you will get.

You will need to disclose that some of your deposit is from a parental gift and your parents will have to write a letter confirming this.

rjg18

Jimbo - thanks for the reply.

I looked into Barclays, but as you say, their rates seems to be a fair bit higher than a lot of other lenders. They only seem competitive once you go below 80% LTV.

Other lenders, particularly YBS and HSBC seem to have a large choice of 90% LTV fixed rates under 4.9%.

In terms of use of deposit money, I'm budgeting on:

£65,000 less:
- £34,000 deposit
- £10,200 stamp duty
- £1,400 solicitors fees (incl. land reg)
- £1,000 mortgage arrangement fee/survey
- £1,000 other costs
Leaving around £17,000.

I have also just realised that, since the parents "topped up" my fund by £20,000, but the deposit is only £34,000, then technically the deposit is only from my own funds, and won't need to be declared as a parental gift.

I can't comfortably get to 20% deposit right now, which is where I think the bigger savings/flexibility would come in.

Also, I don't want to leave myself with no cash, I want a buffer. Plus I would like to spend some money through the first year on various improvements, decorating, etc.

My mortgage payments will be significantly higher than current rent, plus I've always had a good buffer of cash in the bank for many years now, so the thought of having to adjust to higher outgoings while have close to £0 in the bank is absolutely terrifying to me. Especially for any unexpected bills. I've had a few unexpected tax bills in recent years, coming to a few thousand each, and if I get more of these I don't want the worry of not being able to pay them. Plus, one of the two cars is a classic 911 which can (and does) easily hit me with big unexpected maintenance bills from time to time (can easily get a £5000 unexpected bill from a garage). I know that last bit sounds like a bit of an indulgence at a time where I should be considering increasing my level of financial prudence, but it's a bit of a "hobby" to me (the other car is a sensible Toyota than never ever goes wrong )