first time buyers

sciter

Hi! My husband and I are desperate to get on the housing ladder. We have twin toddlers, and could afford the mortgage repayments because we are renting currently a property that is over £950 per month. However, we have looked on the mortgage calculators and because I only work part time and my husbands salary is 24k, we can only get a mortgage for around £117k?? down in the south this gets you absolutely nothing...also, raising the deposit is ridiculous!!

parksajj

Then move.

Also saving for a deposit isn't that hard.

If you find it too hard to raise a deposit then don't buy.

sciter

saving for a deposit is hard when you have 2 children....what im saying is the majority of our income is being used for rent, so if that were mortgage then clearly we would be able to afford it. we aren't hard up but we are only able to save about £30 a month at the moment and its not enough!

sciter

im after help, not negative comments....

sulphate

Where do you live? "The south" is very broad. When we bought our house in east anglia in 2013 our mortgage was 107k for a 137k house, and we could have got one cheaper if we had moved further away.

I agree it's difficult to save for a deposit but we made big sacrifices to do so, the main one living with family for 2 years. Something needs to give in order for people to afford to get on the ladder these days - expectations, free time, luxuries, etc etc.

A deposit is essential to minimise the risk to yourselves and the lender, it is not just about how much you can afford to pay in mortgage repayments each month.

Doshwaster

Is it possible that you could rent somewhere cheaper while you put more money into saving for a deposit? Even if you have to live somewhere not as nice for a year or two, just think of the long term benefits.

Alternatively, you both need to look at ways of earning more money while spending as little as possible.

Have you done a full monthly breakdown of income and expenses to see where your money is actually going? It can be quite an eye-opener if you have never done it before.

kinger101

sciter wrote: »

saving for a deposit is hard when you have 2 children....what im saying is the majority of our income is being used for rent, so if that were mortgage then clearly we would be able to afford it. we aren't hard up but we are only able to save about £30 a month at the moment and its not enough!

It's not just about the rent payments being a similar amount to mortgage repayments though. What if mortgage rates go up to 7%? What if you need to pay for major repairs on the house?

The fact you're only able to save about £30 a month already shows your income is only just sufficient at the moment. The truth is you need to find a bigger deposit, more income, or a cheaper area to live. I'm not being negative. Its just the reality of the situation. Is there any prospect of salary increases on the horizon? Or perhaps being able to work more hours as children get older?

Kynthia

You need to save a deposit of at least 5% of the property value plus enough for fees, moving costs and stamp duty. You will also need an emergency fund to cover unexpected costs when you own a property as there's no landlord to fix the roof or get the boiler repaired. Plus when looking at what property you can afford you need to factor in whether you can survive the repayments should interest rates increase to 6 or 7%. As even if you fix your mortgage for 2/5/10 years at the current rates there will come a time when the fixed term ends and interest rates are higher than the unusually low level they are now. Then you'll need to see what mortgage lenders will lend you and why in order to see whether you can buy what and where you want.


So you need to save a lot of money. As others have suggested could you live with family or find a cheaper property or a cheaper area to rent in? Will any family gift you a deposit, but not loan you the money as mortgage companies will see this as another debt? Can you reduce your outgoings drastically or earn more money, either by working more hours or applying for better paying jobs? Reducing your outgoings and increasing your income will also help you increase the amount that mortgage lenders will lend you. It's also worth getting the £2 statutory reports on your credit history to see if there's anything on them that would affect you getting a good mortgage, as then you'll be forewarned or could do something to improve your credit history before buying.