FTB - Costs to consider

hanfrangipane

Hi Everyone,

Today I have accepted an offer of a new job (yay!) and am starting my savings of a deposit for my first home.

Luckily, I have been able to move back in with my Dad and am able to save approx. £1,200 a month so the deposit amount will build up relatively quickly and I look to be able to buy in around 12 months.

I'm looking around the £120k mark - there are some really reasonable homes going for this price in the areas that I like and mean (subject to any changes in the budget!) I won't have any stamp duty liability and the mortgage payments, based on 90% LTV, would be manageable for me on my own, should my BF not want to move in with me right away or circumstances change.

My question is basically at what point people would recommend starting to look at/view properties. My aim is to save £12,000 for the deposit itself and then an additional £5,000 for any fees and moving expenses.

I don't want to start looking before I have the full £12k deposit at least, because I'm likely to end up seeing something that I fall in love with but can't proceed on! But should I also wait a while and only look once I have the £5k buffer saved too? These things take time don't they so from a potential offer to purchase would be a little while that I could carry on saving for any expenditure necessary.

Does £5k seem a reasonable amount to save for expenses - what's an average amount of fees for a house around this kind of value?

I'm also thinking of looking for houses much cheaper (around £90-100k) and renovating it to my own tastes/standard. I'm in the fortunate position of not needing to be out of Dad's quickly so I could stay there whilst I did any necessary work.

Just after a few experiences/ideas really to give me a bit of extra saving motivation when the temptation to spend may be stronger - eye on the prize!

I fully intend to put any future bonus payments and/or pay increases towards mortgage overpayments too, but that's a consideration for later on when I'm looking at mortgage products

Thanks!

Han

minx1985

Hello, congrats on the new job :beer:

My partner and I are two weeks from completing on our first house :j we waited until we had the deposit saved before we started looking as if you have an offer accepted, the EA will most likely ask you for proof of deposit. Our sellers are moving into a deceased estate property but even then it has taken us 3 months from offer acceptance to (almost) completion with no hiccups so if you ended up in a similar scenario as us, you'd have *just* enough time to save the remaining £5k. you wouldn't need to hand over the deposit until you are ready to exchange and the remaining legal bill is payable ASAP after that. Do keep £500 ish aside for things like the search fees and any surveys you have done, as these are usually payable upfront.

Hope that helps.

Happy saving! :money:

AnnieO1234

Hi OP,

Fees vary by area, some cities have an accepted fixed fee for conveyancing excluding disbursements based on the value. Depending on the area you are purchasing, what searches are required for the area and lender, age of property (as in surveys required), whether the property is freehold or leasehold etc will have a huge impact on your costs.

The best way forward would be to call a few local solicitors with a brief description and get quotes.

As a FTB you would qualify for the help to buy scheme, and many developers have similar offers to allow you to have just a 5% deposit. This may be a way forward for you as it would seem prices are increasing again to 2007 levels in some areas.

Xxx

minx1985

Just to add, our bill for a £138,500 house excluding deposit and stamp duty came to just over £2k- solicitor fees, mortgage arrangement fee and valuation survey.

Iamdave

I'd say don't bother looking until you've at least got the £12k deposit and even then don't go out determined to find somewhere if you're not being forced out of your dads place.

I had to pay stamp duty on my place but if you havn't that to worry about you've got things like solicitors and searches to worry about paying for. Mine come to a fair bit under £1k but that maybe in part to my solicitors liking to do a special rate for FTB's.

Are you also factoring in White goods, Sofa's, TV and small electrical goods into the £5k?

At the very least i'd say get your deposit plus another £2k before starting viewings. remember if you dont find somewhere in say 6 months from there you'll have another £7k to put towards a deposit and that can meaning a nicer house or a better LTV and smaller mortgage rate

JennGa

Tbh the more deposit you have the better (plus extra for fees) the deals out there improve the lower your LTV.
We considered only using half our savings for deposit, giving us around 92% LTV, but once our broker showed us what we could get for 85% we decided to use more. We are in the middle of applying with 84% LTV.
So if you are able to stay with your dad longer and save more, I would recommend it

Mortgage_Mark_2

Bear in mind that your mortgage lender will most likely ask for proof of deposit on application, so you may HAVE to wait until you've got your desired deposit.

Good luck with it.

Mark

sulphate

£5k sounds reasonable for fees and other moving costs, I think we budgeted for it (bought first home last year) but didn't spend all of it mostly because we didn't have any mortgage product fees (but we did have stamp duty).

The more deposit you have the better, even if you can afford repayments on a 90% LTV, as you probably know you can get access to better mortgage products if you have a larger deposit. We had just over 80% LTV and got a much better rate than if it was 85% or higher.

Also bear in mind costs of furnishings, white goods etc if you don't have those already.

Good luck :beer:

hanfrangipane

Thanks for all the replies!

I certainly wouldn't be looking before I had AT LEAST my £12k saved. From your replies it doesn't sound as though the fees are as expensive as I thought so I may be able to get to 18k by May next year and that would be a 15% deposit in my price range. Then save another couple of grand for fees etc whilst I'm viewing/buying. I'd love to get into that 85% LTV bracket so maybe I'll alter my savings target and aim for that instead if it makes such a difference to the products available.

Ideally, I want to get as much for my money as possible whilst I'm in the good position of being FTB and able to use FTB products and also use the no chain bargaiing position.

What are people's views on the help to buy scheme - is it worth considering? I generally don't agree with it as I think it's sustaining high house prices but at the same time, if it's there and available to use, I might as well consider it.

Furniture wise, I already have the basics like beds etc as I bought it all for when I moved into my dads (we 'converted' mine and my sisters old loft bedrooms into a bedroom and living area for me) so I wouldn't have to have any major outlays immediately.

Moving costs themself would be almost nothing as my Dad has the use of vans/trailers through his business so we'd do it all ourselves.

White goods I'd probably have to buy but I have a credit card that, without fail, offers em 0% on cash transfers every 6 months so my intention was, if I hadn't saved up quite enough for everything I needed, to use that and pay off within 6-12 months. I've budgeted for this within my 'post house purchase' finances just in case I need it. But I'm pretty low maintenance, as long as I have the bricks and mortar I'm happy to add to the rest as and when I can afford to add bits of furniture!

PollyOnAMission

If I were you, I'd set up Rightmove alerts for the types of properties and areas you are interested in right away, and also follow them up once sold to see what they sold for. That way you can get a good feel for what is available in your price range, what sort of properties come up often and what comes up rarely. I wouldn't go to view any; I would jsut start studying the market.

I did this for a year or so before I moved recently. It really helped when it came to seriously looking; I knew, for example, that houses with south facing gardens and large driveways did not come up very often in my price range. That, and other factors, meant that when my new house came on the market I knew instantly how it compared to the rest of the market and I snapped it up ASAP.

hanfrangipane

PollyOnAMission wrote: »

If I were you, I'd set up Rightmove alerts for the types of properties and areas you are interested in right away, and also follow them up once sold to see what they sold for. That way you can get a good feel for what is available in your price range, what sort of properties come up often and what comes up rarely. I wouldn't go to view any; I would jsut start studying the market.

I did this for a year or so before I moved recently. It really helped when it came to seriously looking; I knew, for example, that houses with south facing gardens and large driveways did not come up very often in my price range. That, and other factors, meant that when my new house came on the market I knew instantly how it compared to the rest of the market and I snapped it up ASAP.

Thanks! That's a great tip - I'll start doing that now. Now that I know what job I'm accepting, I have more idea of the areas that i'd like to consider to make things commutable