Considering buying for the first time but have no idea if its even possible

marketraisen

Hello there.

I am 32 and am currently renting a room from a friend of mine and have been renting privately since the age of 17. I have always just assumed buying was out of reach for me and my low income, I have never considered it, I earn 21-22k per year and atm only have about 4 grand in the bank.

While looking at one bedroom flats to rent, I did notice one cheap one going for 425pcm was actually listed as being for sale too, for £65,000, which seems more than reasonable for this area given I've never seen anything for less than 75-80 for a box.

On further research, theres actually a few of them for similar prices (not shared ownership), according to online mortgage calculators I should comfortably be able to afford repayments while still living like a human being, I'm just unsure about who to turn to for advice.

I had debts while at University and had them all statute barred years ago as I sort of meandered aimlessly between jobs, the only debt I have now is the ongoing £14 a month I repay the now ancient student loans.

Should I go speak to my bank for advice? How much of a deposit would be expected? (I pay £300pcm to share this place, get paid 1300 after tax, so could save)

Am I wasting my time if I have had debt in my youth?

Help appreciated

Yorkie1

I think you need to speak to a mortgage broker rather than your bank, which will only be able to discuss its own products with you.

I suspect things will be tight, with only £4K in the bank to cover your buying costs as well as the deposit (you're not going to get a mortgage for 100% of the purchase cost - maximum 95% and, more likely, 90%).

If the flat is cheaper than you expect, there may be a reason which makes the purchase unviable too. For example, if it's a leasehold flat (normal), how many years has the lease got left on it?

marketraisen

Yep, that last piece of advice has crossed my mind, there may well be a fundamental reason the cost is cheaper than expected that isnt obvious to somebody like me. Given the property website hsnt listed the number of years left on the leasehold, I have no idea how long is left on it.

At the moment I only have 4k or so in the bank but I havent been attempting to save a penny for years, its just the little bits of excess building up at the end of each pay cycle, if I did have to start saving hard it wouldnt be too much of a grind, as I said in my first post I'm hardly shackled down with debt or high rents.

All the mortgage calculator websites tell me I should be fine (with a bigger deposit) not to get completely ripped off, I'd just like to hear from other people who have maybe been in my situation and come out of it with what they wanted. That is, somebody who has rented forever in the private sector on a low income -> homeowner without a family death or other freak accident giving them money.

marketraisen

Well, the first place I was looking at is now gone, incidentally I found it it was a leasehold with 83 years left on its lease and I was advised I probably wouldnt be lent any money for it anyway. My interest is still peaked but my motivation is currently slightly above nil with the 2 financial advisers I spoke to casually asking 'couldnt your parents help?' or 'why dont you try and earn more money?'..... funnily enough I had never considered those 2 solutions myself before now, thank you qualified experts. My parents are both broke, living in council housing, so no chance there and although my incomes been steady for the past 3 years, I'm actually earning less than I was when I was 27 by almost 5k per year. I've had the confirmation of another 2% pay rise for the 3rd year in a row incoming but its not the jump I need, a new job should be the priority.

Theres still bargains to be had out there, I just need to make sure I'm in a better position the next time one comes around, which may have to be in another year./18 months. I'm going to have to save hard.

Its frustrating, I cant help but be envious of my peers who have wealthy parents but I cant dwell on these things. The saddest part about it all is the person who did buy the flat will probably end up renting it out to somebody working like me, who will be paying more in rent than it would cost for them to own it.

libf

I appreciate that it's difficult, but a bit more effort on saving and maximizing your income, and a bit less 'woe is me' is what's required. Look into shared ownership, help to buy and other schemes designed to help you purchase too.

David_White

You could potentially get a mortgage with a 5% deposit so with your income and a little bit of focus I would say it's doable, just make sure you put a lot of hard thought into this before committing as getting a mortgage isn't a decision to be taken lightly.

bike_saving_expert

well i would advise set your sights high and see what you can achieve maybe you could get a 2 bed flat and rent out to another friend of yours.

But first put your focus into that deposit think of every way you can to reduce your outgoings set a monthly figure of the % of your wages you wish to save or set a deposit ammount you need for what you want then work out how quickly you can save it. 3 years is a long time to wait to buy given how close you really are but if you want 3 grand for free from the govt get a help to buy isa when their out if im right in thinking youll have 15k after 3 years possibly more

GoldenShadow

You just said it won't be too much of a grind to save, then went all woe is me. Go get saving then...

Re envious of wealthy parents. There are plenty out their who have worked their own socks off to save their own money, get their own mortgage therefore their own house. Not everyone gets things served up on a silver platter. This is real life, decide what you want then go get it, you will largely have yourself to blame if you end up unhappy.

ed67812

Get a help to buy ISA and start saving. It'll come quicker than you think!

I do understand the envy of those with wealthy parents in the same way I understand the envy of those who will shortly be gifted huge equity in social houses under the new RTB........but the reality is, most of us come from reasonably humble backgrounds and have to work hard to get on the housing ladder and climb it.

jacobtheamish

marketraisen wrote: »

Well, the first place I was looking at is now gone, incidentally I found it it was a leasehold with 83 years left on its lease and I was advised I probably wouldnt be lent any money for it anyway.

An 83 year lease is not short, there is no lender that would not accept that. I would advise seeking advice from anyone else, other than the person that told you that!

tiger_eyes

marketraisen wrote: »

I'd just like to hear from other people who have maybe been in my situation and come out of it with what they wanted. That is, somebody who has rented forever in the private sector on a low income -> homeowner without a family death or other freak accident giving them money.

I rented in the private sector for several years on an income lower than yours while building up a deposit to buy a flat. I completed this month.