Plan for first buyer

TightMike

I am 20, working nights at Tesco earning about £700-£1200 take home a month. Over the last few years I've managed to save £15,000 for a house deposit. My goal is £20,000 which should get me a 20% deposit on a £100,000 house. After I have the £20,000 in my bank, I will start saving for a new motorbike (£2500), then a new car (£2500), and then my plan is to save £5000 for legal fees, furniture, buffer zone etc.

I plan on having a housemate that is paying rent, but obviously this wouldn't help me at all in getting the mortgage in the first place. Now £700-£1200 a month would not be enough to get an £80,000 mortgage. What is the minimum I would need to be earning in order to borrow £80,000 and then have enough to pay the mortgage off and bills each month? And how does my 'plan' sound?

Thanks

Dan-Dan

the motorbike and car before legal fee`s and furniture?

I havent had a coffee yet but that seems !!!! about face

TightMike

Dan-Dan wrote: »

the motorbike and car before legal fee`s and furniture?

I havent had a coffee yet but that seems !!!! about face

I'm 20 and live at home and I have no car (use my mums right now). Also I need time to get a decent paying job, I might even be doing an Apprenticeship which would probably mean a very low income for 1 year+, so I'm not in a financial position to move out even if I do have a £20,000 deposit and £5000 for fee's etc.

Annisele

All I can tell you about lending criteria in a few years is that they won't be identical to lending criteria now. But if you were looking to borrow £80k now, you'd probably need a basic salary of around £20k - £26k.

I agree that car and motorbike before house seems daft. If you need a car, buy it with some of the £15k you've already saved. If you don't need a car, don't bother with one.

Dan-Dan

TightMike wrote: »

I'm 20 and live at home and I have no car (use my mums right now). Also I need time to get a decent paying job, I might even be doing an Apprenticeship which would probably mean a very low income for 1 year+, so I'm not in a financial position to move out even if I do have a £20,000 deposit and £5000 for fee's etc.

But you are in a financial position to spend 5k on two modes of transport ?

TightMike

Annisele wrote: »

All I can tell you about lending criteria in a few years is that they won't be identical to lending criteria now. But if you were looking to borrow £80k now, you'd probably need a basic salary of around £20k - £26k.

I agree that car and motorbike before house seems daft. If you need a car, buy it with some of the £15k you've already saved. If you don't need a car, don't bother with one.

I'm not sure whether you posted that before you read my above reply because it says you posted it 1 minute after I posted what I said Anyway I don't NEED a car, I'd imagine there's very few people that genuinely NEED one, but I would LIKE a car. That's one of the reasons why I haven't got a car now, I'm using my mums, but when I move out I'd either have to rely on public transport or get a car.

Like I said, I'm in no rush to move out. I've been planning it for years so the sooner the better, but there's no way I'd move out before I'm ready which could get me into a difficult financial position later on i.e. without a decent deposit or without a means of transport etc.

TightMike

Dan-Dan wrote: »

But you are in a financial position to spend 5k on two modes of transport ?

I'm thinking way into the future here. I save about £500/month, so it would take me 5 months to save for a car, and 5 months to save for a bike. By the time I have these, hopefully I'd have a better paying job so that I could take a mortgage out after I've saved another £5000 for legal fees etc.

Errata

What does "earning about £700-£1200 take home a month" mean?
That's a quite a range.

6feet

Errata wrote: »

What does "earning about £700-£1200 take home a month" mean?
That's a quite a range.

He probably gets overtime in busy periods if he works extra shifts. Night shifts usually earn more because of the unsociable hours...

sandsni

How much "housekeeping" money do you pay at home? If you can afford to save £500 a month out of £700, I'd say it's probably not that much. Once you move out you will be responsible for ALL outgoings (right down to the washing powder and toilet roll) in your household.

Draw up a budget for yourself to take account of mortgage payments on the level of mortgage you're thinkiing of, electric bills, gas, food, etc. Just because you're parents feed you for a tenner a week, doesn't mean that's actually what it costs. You need to be realistic about how much it actually costs to have your own home. You've already said you'll buy a motorbike and/or car before you buy furniture. Have you accounted for the cost of owning a motor vehicle (tax, insurance, fuel, repairs) on top of your potential household bills?

hazyjo

Okay, you're probably into bikes and want one rather than need one, but why not just get a car? The bike can wait a few years, surely...

Jx