1st time buyers 20% mortgage?

Sammyantha

Hi all,

OH and I want to buy our first house in a couple of years time.

We have good incomes and can afford a 20% mortgage. However we both have "ok" credit ratings. Hopefully in 2 years time this will have changed (mine is due to silly credit agencies never having put me down as on electoral roll anywhere i have lived!!).

How likely will it be for us to get a mortgage knowing the above?

We are planning to buy something up to £200,000 that needs modernizing/ doing up, to then sell on again in 2-3 years time. Along this line, what sort of return could we expect on this kind of house if we improved it? Know that's a bit of a how long's a piece of string type of question, but worth an ask if anyone has tips?

Thrugelmir

Sammyantha wrote: »

We have good incomes and can afford a 20% mortgage.

Do you want to borrow a £160,000 ?

Sammyantha

Hi, yes we will be looking at houses between 0 - 200k and able to put down 20% (more obviously if the price is lower. So yes, the rest we will need to borrow

bigadaj

Difficult to make money in the property market currently, patticulalry if the house has to be lived in.

anotherginger

Reading around your posts, I'm guessing your deposit is 40k. Do you have more money to do the work and where will you live while it's being done?

Sammyantha

We will have around 60k to play with, so hoping up to 45/ 50 deposit (less preferably) and the rest for improvements. I'm not talking logt conversions or extensions etc, just general modernisation like carpets/ fittings, maybe kitchen though i have read these don't tend to add much value compared to the expense nowadays. Possibly a conservatory, or just really improve what's there.

We have 2 reasons for doing this - 1) We're sick of renting and 2) We would like to buy something better within another 2-5 years of the first one so want to make money on it. We will be living there while working on it.

Thrugelmir

Sammyantha wrote: »

We are planning to buy something up to £200,000 that needs modernizing/ doing up, to then sell on again in 2-3 years time. Along this line, what sort of return could we expect on this kind of house if we improved it?

Buying and selling the house will cost you around £10k. So that needs to be covered before you make anything on the selling price.

In 3 years you'll also incur over £18k in interest charges.

So you'll need to add £30k in value just to cover costs.

Sammyantha

I know practically nothing about mortgages having always rented. We plan to overpay every month and have a mortgage that just pays back what we've borrowed. Is this even possible?

But you're saying it will COST us just to buy and live in it. Is it even worth buying?

Original intention was to wait and save like mad till we could buy outright, but we are being shunted from one home to another trying to rent

Thrugelmir

Why not buy a home rather than an investment.

Buy an investment when you have the capital.

Sammyantha

Yes we would like to. However, renting si a nightmare. We cannot put down roots as supposed "long term" let owners keep returning to the country and deciding to sell the homes we live in. Happened twice in under a year now! Cannot keep going through this as apart from the stress and emotional upheaval it's costing us up to 4k each time in fees and deposits. When you think about it, it's cheaper or at least on par with buying (minus the deposit).

Besides, the sort of "home" I am aiming for is a smallholding, 500-600k 's worth with stables and land. Not in a lifetime of sundays could we afford that without serious increases on value from previous bought properties (or some other way)

I am more concerned anyway with whether we could get a mortgage at all with only "ok" credit history. Will having up to 20% deposit and being able to overpay monthly help us?

Finally, any tips for small home improvements which may help increase value?

Sammyantha

Having read about lower deals for higher deposits, would we be better looking at houses around 50 -150k, and therefore possibly having a lower interest rate open to us? Or will this just be the same as a above, but taking longer to get to the eventual dream house?