How can l get on the propert ladder????

havanna

I dont know if anyone can help me with this. This is my first time on the chat forum altho l have been a regular visiter.

I am 26 year old single girl trying to get onto the property ladder and finding it very difficult. I dont earn enough on my own to get a morgage and dont have the best credit rating.

After much convincing l have managed to persuade my dad to get the morgage for me and he has agreed to, if l get one together with my sister. We both pay over £450 a month in rent not including other bills and feel that we can cope with the morgage repayments (l know that it will be repayed over 15years rather than the usual 25).

However we do not have a deposit and my dad is finding it difficult to get a morgage without one. Apparently he needs to pay a 20% deposit because its his second house?

Is there no alternative to this? Any ideas would be a great help.

Johnocyprus

Don't. Now is not the time given your circumstances, you have to be very wealthy to be a first time buyer at the top of this cycle.. Every 15 years or so the property crashes and this cycle will be no different. At 26 years old you will not remember the last crash but it will happen and the last thing you want is to buy at the top.

meanmachine_2

Poor old dad.

Stop saddling him with more debt, save a deposit, get a credit card (paying off what you owe in full EVERY month) to raise your credit rating and leave the old fella alone.

Jeez.

Kids today...

pennypinching_2

Have you thought about shared ownership housing? I think every new housing estate has to have some of these shared ownership houses, where you buy a % of the property and rent the rest. You can if you want to purchase some more and eventually own 100% if you so wished.

diesel9181

what about you put the mortgage over 25 years in you and your sisters names, even interest only at a fixed rate for a couple of years. both of you get a loan so you have a deposit together. finally if you need to ask your dad to be guarantor (but if you default he loses out too). yes its difficult but not impossible.

wisbech_lad

Well, I guess he could raise the 20% deposit by remortgaging his (main) house.

Presumably you will to go see a lawyer to get the ownership/ mortgage split legalised and clear, or the tax people will think that this is a BTL, and tax him. But he can get tax relief on the interest portion of the mortgage.

Personally, I don’t think he should do it. (take the mortgage on) Sounds if he isn’t that keen. Maybe better just to ask him for the 20% deposit? (and pay him back on the same terms and rates as the rest of the mortgage – of course, he’ll have to declare the interest you pay as income, so this is more expensive for him tax wise)

By the way, do you really want to live with your sister from age 26-41? What happens if one of you meets someone?

pamaris

Hello,

We are a young family who has spent the past 5 years abroad and now that we are back we can't get on the "ladder". For the time being we are shacking up with OH's mum. It is not ideal at all but it does allow us to save a huge chunk of our income each month. The idea is that the housing market is heading south (there is nowhere else for it to go) so by the time we have a deposit saved up the prices will have tipped in our favour anyway. That said, I think that it will take 3 or four years for us to see the bottom (not that we will live with mum for that long!).

I would recommend you do the same, if you can. Is there any way you can move back in with your folks for a year or so? You will be able to save a good pot of money that way.

Don't borrow your deposit. It supposed to be a buffer against negative equity.

Also, it is potentially problematic buying a home with your sister... what happens when one of you meets a partner, and wants to get married? What do you do with your half of the house then?

I know it is tempting, but if you borrow a deposit and mortgage yourself to the max for a place you can barely afford, at the top of a housing market bubble, with someone you are not necessarily going to want to live with for the rest of your life, there are too many possibilities for things to end very badly for you.

Negative equity is something a lot of people don't think about. You really, really don't want to be in that trap.

MortgageMamma

I am a mortgage adviser and I do not own my own house. The reason? with 3 kids and a partner with lets say, modest earnings, I cannot afford the property I would like to live in in the present climate and I am not prepared to compromise my lifestyle to say I own a property.

In February this year with moved from a 3 bed terraced with a back yard to a 3 bed house in the country. Its grade II listed, got bags of character and Its spacious and I have all the space I need to work from home. We also have numerous outbuildings and are surrounded by fields and a lake. It costs me £750 a month. Living here has improved our lifestyles to the extent we will probably never leave - owning a house has lost all importance. Having a good lifestyle is so much more important than owning a house.

Don't churn yourself up about homeownership. this probably sounds strange coming from a professional but its really not important.

silvercar

MM, I clicked the thanks because it is interesting to get an insight into regular posters live.

Can't resist pointing out that if everyone followed your lead, your business would dry up!

I think its actually quite brave to jump off the house owning boat (as opposed to waiting to get on); just as it is difficult to see when prices will crash it is also difficult to see when they will jump. Were you not tempted to buy a smaller property as BTL to keep a foot in the door?

MortgageMamma

no not at all silvercar, I don't think there is very much money in buy to let these days and I have enough repsonsiblity having a business, 3 kids, 2 dogs a bull and a cow!

I really could not care less whether I owned a property ever again in my entire life. I am very lucky to live where I do, we have a long term lease and the owner is in canada and I'm assured that since our historic home has been in his family for hundreds of years he will never sell. If the rent went double I'd still live here.

But I've got to say from a professionals point of view. Every single day of my life I have to interview and help people desperate to get on the housing ladder. Whilst I can see and respect their reasons, its a sad state of affairs for FTB's at the moment and I do want house prices to come down for them. If my business dried up it wouldnt bother me in the slightest - I'm qualified to do other things I'd just go off and do something else (preferrably less stressful lol)

havanna

My dad is looking into the possibility of just being the guarantor, thanks diesel19181.

I do realise that now is possibly not the right time to buy, with properties being so expensive at the moment..and l have thought that l probably will not want to live with my sister forever (pamaris). But, l still feel that owning a property is probably the best way to go - there is no way we can live with the folks to save up a deposit (my sister is a single mum).

MM - do you not feel like paying all that money in rent is like throwing it down the drain? I feel like paying £750 a month in rent is wastful when you could be paying that on a morgage and at the end of it you get to keep the house.