Help! Buying our 1st home....Sooon!!

Pezmatic1

Hi Guys,

So my partner and myself are buying our first home and have absolutely no idea which mortgage we should choose.

I've done a lot of reading and asked many questions.

I'm wondering if anybody here has any advice as to which is the best mortgage currently out there for a first time buyer who can make regular payments every month up to £800 and wants to buy at roughly £180'000 with a 10% deposit, meaning a mortgage of roughly £162'000.

Our incomes are:
£32000
£25000

Our credit rating is nearly none existent. We're both on the electoral roll but have never taken a loan or been in debt or used a credit card much. We now both have a credit card but I've yet to use mine and my partner has been using for a couple months, paying off perfectly of course.

If you don't quite know of the best one out there (understandable), then do you know of what could be conceived of as a good offer for someone like us. A guideline for what we should at least be looking for in terms of Interest Rates etc.

Thanks so much in advance for your help.
Rob

:beer:

ACG

For someone to tell you which is the best on so little required information could cause more harm than good.

If you want advice for your requirements you need to sit down with a broker.

You can search for the best deals, but thats not to say you will be eligible for them, so you would need to check the criteria - im not trying to scare you, im just trying to make you aware that any info people put on here is based on your post alone which isnt enough info.

Pezmatic1

Thanks!

I did think that might be the case. We are due to sit down with a mortgage adviser (though that will be at Natwest) and we're due to speak to a financial adviser this week too (can these be brokers too?).

-Would you suggest speaking to a no fees broker too?

-Is there any further information i could put up here that may help a little?

-Also, although it is a complete shot in the dark, do you know of a rough guide that, if you were in my shoes, you would expect to pay in terms of interest etc.

For example:
Is 10% interest too much?
Is 1% interest too hopeful?
Is fixed rate the best way given the expected market upturn?
Or would tracker be best given the current base rate?

Thanks again.

originalmiscellany

There are loads of tracking spreadsheets "out there" e.g.
http://lmgtfy.com/?q=interest+rate+calculator

which will point you in the right way.

Interest rates, currently a record low, if you have a big deposit, you can get some great deals, 10% isn't that good, so at a guess 4% would not be too wild of the mark (give or take 4% either way).
1% is realistically impossible to get.

Do your calculations. What would happen if interest rates shot up by 5%? Could you afford it if you were on a variable rate?

Odette

Hi Pezmatic1,
Our salaries are similar as is the price you want to buy for, we are currently waiting back on our survey so fingers crossed our mortgage should be in place soon. We visited a couple of brokers, it was clear that one bank was coming in at the top of the 'scoreboard' for our requirements so we decided to fob of the brokers and go directly to the bank in question. It was really helpful for us to speak to the brokers but take everything with a pinch of salt as they will be trying to sell you their service. I think the first thing to think of is whats going to be the selling point of the mortgage for you; do you want to lock in for a longer time period? do you want to be able to overpay? etc.

Pezmatic1

Hi Odette,

Fantastic. Congratulations and good luck.

Yes, we will definitely be getting advice from an adviser/broker. I think in truth, whilst i love the thought of paying the mortgage of early and, me being me, that is something i'm liking to think about down the line. However, i would like the safety of knowing the interest rate is locked in. I think the interest rates will only be going north from here along with house prices. I'd be more keen to lock mine in for as long as possible really.

Out of interest, which did you go for, fixed or something else?

Also, so that we know if it pops up when talking with our advisers, which bank/provider was it that you ended up going with?

Thanks for your help and again, good luck!!

ACG

Financial advisors dont typically do mortgages - although some do, other may have a mortgage broker working for them... either way they should be fine.

- I tend to say avoid fee free brokers, although thats usually because the people who come on here have a complicated situation. I would say avoid estate agent based brokers like the plague.

- It depends on your situation. I dont know enough about it, although assuming affordability and credit history is fine - sub 4% should be achievable.

- Forget what you think the market will do. What do you WANT. If your happy to take a risk on rates in the hope of getting a lower one then your probably open to trackers. If you dont like risk then your looking at a fixed rate. Fixed rates at the minute are actually quite well priced so it may just come down to preference if you have one.

Odette

Before I go ahead I just want to make it clear that this is my journey and my opinion and obviously what is best for us might not be for you etc. I had done alot of research before (mostly on MSE!) we went to see a broker. You can run searches on moneysupermarket or similar as well as the whomever you bank with to get an idea of what kind of rates are open to you. Its unlikely that you will get offered tracker rates with a 10% deposit unfortunately so its more finding the best fixed rate, for us this was with Nationwide. We went for a two year fix as we plan to massively overpay and are still relatively young DINK's. We are confident that rates will still be low in 2015 but obviously this is crystal ball territory, if rates went up and we got caught out we would still be okay. Its definitely a risk that you will have to account for no matter what mortgage you take up.

Hope that makes sense, thanks for the luck. When you have got sorted please join us over in the "Waiting for a mortgage..." thread!

Foxy-Stoat_3

http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#result

Using the mortgage calculator to work out how much you can afford to pay back v how much you can borrow assuming the lender is happy to give you a 90% mortgage.

If your credit score is very good (unlikely as you say its none existent) your first time rate will need to be 3.4% plus fees, which seems very low.

You need to allow for fees, legals, insurance and moving costs on top of the £18K you already have. Some lenders allow you to add the fees to the mortgage but then your low to value ratio takes a small hit.

Don't forget that every £1 you borrow you will pay back the £1 plus £1 in interest over 25 years.

When I went for my first mortgage it wasn't how much can I afford to borrow based on salary, it was how much I can afford to buy with my deposit. Turns out that the max loan to value was 78% so my deposit dictated what house I could buy, not me saying "I want take one!"

Good luck with it all.

jamesml

A really quick look on the NatWest site on a fixed rate shows you are looking at between 4.5% and 5%, with 2 or 5 year fixes, fee free or with a £995 product fee. These range from £899 to £950 a month.

Not to say these will be the best you can get, but this is likely what NatWest will offer you when you go and see them.

If you bank with NatWest it might be worth speaking to them as they will know some of your history already, which could work in your favour. However, I would say it would still be worth speaking to a broker and doing your own research too. Some products aren't available through brokers and equally some will only be available through brokers. Good luck!

MrsHappy85

Hello

I have just bought a house, similar figures to you. We bought the house for 180k, put down £18,000 deposit so borrowed £162,000.

Our joint income is about 50k a year.

We used a broker who was really helpful, we did pay a fee but it was worth every penny. We got a deal with the halifax which paid our stamp duty and our interest is 4.9&. Our monthly payments are £817.00. We can over pay on the mortgage which we hope to do.

Best of luck.


x