Looking to buy my first home

DireEmblem

Hi all, I have been renting for c. 13 years now, and have decided that it is time to stop.

Finances:-
I currently pay 525PCM for rent, and save 500PCM. What I am thinking is setting myself a maximum payment of 700PCM on the mortgage, so that way I have a 300PCM buffer to overpay/continue to save/enjoy life(holidays). Does this sound a reasonable approach? This would leave my mortgage payments less than a third of my salary, which I think is reasonable.

I have had a look online, and the best mortgage deal I can find seems to be the Tesco 5 year fixed rate, which would mean I could get a 240k property with the 700PCM max payment I want to set myself, over a course of 30 years.

My thoughts on this being that I can easily afford what I have set, and that my salary should continue to grow in the coming years. Should I investigate my own mortgage or go through a mortgage broker?

As far as I am aware, I need to get a mortgage in principal to confirm the most I could potentially borrow, and then arrange the services of a solicitor to put in a bid for myself. Is there anything else I need to consider?

Needless to say if/when I put in an offer for somewhere and it is accepted, I will be joining the mortgage free wannabe thread, as I would very much like to get back to being debt free. Perhaps in 5/10 years I might downside to help achieve this, but only time will tell.

Thanks for any advice.

HappyMJ

Why would you want to pay more for a property than you are paying now?

If your renting house for £525 a month then keep renting and saving the difference. I wouldn't want to pay £700 a month for the same thing....unless of course you're not comparing like for like.

Doesn't make sense....

What you do is buy when the rent exceeds the mortgage...if the rent were to increase to £750 a month and you've continued to save enough to buy it costing £600 a month then go ahead and buy....and save the difference.

ACG

Are you in Scotland? (I dont understand the process north of the border 100%).

If not, then you would not have a solicitor put in your offers, you would do that yourself. You agree a price with the agent/vendor through negotiation and then apply for your mortgage and know your solicitors. Do not instruct solciitors until you have a full offer otherwise you could find they start work and your application gets declined.

Brokers can not access Tesco (at the moment) but it could be worth using one just to help you with the process and offer some guidance? It may be more each month on your morthgage (although could very well be less) and they will ensure that you fit the lenders criteria just as much as they fit yours.

Do not show your DIP with the maixmum you can borrow until you have agreed a price - it may impact on negotiations to your detriment.

DireEmblem

Hi HappyMJ - I'm not looking to move like for like. I currently rent a 1 bed flat, and would like something bigger/my own. I will be looking to overpay to get my payments back down to my current rent levels.

ACG - thanks for the comments, I am in Scotland.

PixelPound

You don't need a DIP (decision in principle) to see how much you can afford, there are calculators the lenders have that can give you a rough figure, it is possible that even with a DIP for an amount the lender actually only lend lower on full application where something comes to light that isn't considered at DIP stage.

as you think you should be okay for £240K, have you looked at houses at up to that price and for fair bit lower like £150K. Why upsize so much if aiming to downsize in 10 years?

DireEmblem

nic_c wrote: »

as you think you should be okay for £240K, have you looked at houses at up to that price and for fair bit lower like £150K. Why upsize so much if aiming to downsize in 10 years?

You raise a good point, it all depends on the properties I start to look at to be honest. I barely know what I will be doing in 6 months let alone 10 years, all I know is that I would like a bigger property, and 240k was just the maximum I should goto to maintain the same lifestyle with my current situation. I could go for something lower and overpay the difference.

ViolaLass

You need to allow some money for property maintenance.