Looking to get on the property ladder in the near future

krish123

Pixie5740 wrote: »

If you're living at home just now, what bills do you have to pay that only leaves you with £500 a month to save? These bills will be taken into account when calculating your affordability but as Annisle says, on your salary with a 10% deposit you ain't going to be buying a £150k property.

If you're thinking of buying a flat why let it out? Why not just live in it? You won't get a BTL mortgage with a 10% deposit on your income with no residential property owned.

my current outgoings are as so:


Rent- £230
gym - £33
Monthly investment in a S&S ISA fund: £50


and then there are smaller outgoings such as lunch money - £15 weekly, football once a week at £5 things like this.


And of course there is money outgoing for enjoyment eg going out for food drinks or buying clothes etc although I keep this to a minimum.

krish123

Also can someone explain to me the different types of mortgages available and what different ones allow and don't allow you to do.


See I want this first purchase in property as more as an investment something that will make me money to buy a house in the future that I perhaps would like to live in.


hope thi makes sense.

Pixie5740

Get your last 12 months bank statements and put together a statement of affairs.

http://www.stoozing.com/calculator/soa.php

Then review it and see what you cut back on to help you save a bigger deposit quicker. It might also help to keep a spending diary to see where that £5 here and £2 there goes.

Pixie5740

krish123 wrote: »

Also can someone explain to me the different types of mortgages available and what different ones allow and don't allow you to do.


See I want this first purchase in property as more as an investment something that will make me money to buy a house in the future that I perhaps would like to live in.


hope thi makes sense.

Why live at home when you can have the freedom of your own place?

If you want to buy a property to let out then you'll need a buy to let mortgage so as a general rule of thumb you're going to need at least 25% deposit. Some lenders won't consider you if you don't already own your own home and your salary might be a factor too. You will have all the legal responsibilities of being a LL, will have to pay income tax on the rental income and capital gains tax when you sell the investment property.

krish123

Pixie5740 wrote: »

Why live at home when you can have the freedom of your own place?

If you want to buy a property to let out then you'll need a buy to let mortgage so as a general rule of thumb you're going to need at least 25% deposit. Some lenders won't consider you if you don't already own your own home and your salary might be a factor too. You will have all the legal responsibilities of being a LL, will have to pay income tax on the rental income and capital gains tax when you sell the investment property.

true, I just thought maybe to get on the property ladder sooner rather than later but rent it out instead of living there to earn income. however as you mention income tax on rental income has to be paid and so to CGT on the sale of the property so it could be a lot of hassle for not to much profit.


Ok so let look at a different scenario.


Lets say I want to live in this house. how will things differ here in terms of deposit and what I could potentially afford?

Pixie5740

I don't know. Make an appointment with a mortgage broker and find out.

reaprr

Also worth considering buying a 2 bed and getting in a lodger. They will end up paying a fair chunk of your mortgage off for you.

You could also look into shared ownership houses. These are basically where you buy (get a mortgage) for a certain percentage of the house and pay rent on the rest.

Foxy-Stoat_3

krish123 wrote: »

Lets say I want to live in this house. how will things differ here in terms of deposit and what I could potentially afford?

You could potentially afford 4-5 times your salary plus deposit less fees.

You will be able to work out what you think you can afford before going to see a mortgage adviser.

You should be able to save closer to £750 a month for your deposit so do that for 2 years and look at the market then, your life circumstances may change also.

DAN1

In my opinion you should look for somewhere needing work around the 120,000 mark. Buy it on a variable rate mortgage with no early repayment penalty, santander offer one at the moment for 15% deposit and a 2.99% interest. Do the work on it and then remortgage the property onto a buy to let which you will need a 20-25% deposit. Then you can save towards another or save towards a house for yourself.

I have found this works for me. I bought the only place i could afford near me needed alot of work i earnt about 16,000 at the time only just managed to borrow enough but did it. I did what i said above and now have 4 properties on buy to let mortgages all let out and im only your age and still living at home.

If you want financial independence and this property to be a stepping stone towards a larger home stay at home and have a tenant pay your mortgage for you. That will leave you with money to carry on saving for your larger property.

To avoid capital gains tax you can move into the property in the future before you sell it. However depending on the amount and the allowances that you get towards capital gains it might not be as much as you think to just pay the tax.

krish123

thanks everyone for the advice.

i think in my situation the best thing to do is save up for at least a year and then with at least 10k in the bank i can start to assess the market and affordability etc.

Also i think my first house i buy will be one il live in so il save as much as i can which will hopefully allow me to buy a decent house i could live in.

One other question lets say within a year or 2 im ready to do this will the gov help to buy scheme still be around as they only require a 5% deposit?

In general wats everyones view on this scheme do you think its somethini should take advantage of?