House Buying Noob

White_Rose_Tight_ThaKnows

Good evening folks, I've not been on MSE for a while, I like what they've done with the place!!

I'm growing up into a "probably should move out by now" chap, but no-one has yet sat me down and had the talk about the birds and the bees flying the nest. I'll be spending the rest of the evening scouring this board for hints tips and advice on what to do next, but in the mean time.

Basically I have my eye on a house and beyond calling the estate agent I've no idea how to go about anything. I know the good folk of the internet will mock but also give some helpful nuggets. Here are the vital stats:

House price = £135k
All my money in the world = approx. £75k
Deposit = I could probably pay about 30%
Salary = £17k
No credit cards so probably no credit history.
And there's just me.

Yes, I am that naïve when it comes to house buying and this thread is really happening, everyone has to start somewhere! :j

kazordoon

House 135k - 40.5K (30% deposit) = 94.5K Loan
It will be difficult to get a 94.5K mortgage on a 17k salary.

But you have saved 75k. Why don't you put more K's into your deposit ?

White_Rose_Tight_ThaKnows

I could probably do £60k max, which is about 45%, I'd need to keep a decent amount for the time being.

This is all a learning curve for me, the House Buying - Moneysaving tips thread is teaching me a thing or two now.

White_Rose_Tight_ThaKnows

I realise I could afford A.N. Other house but I don't know if that's the right way to go about things either.

Prothet_of_Doom

You want to borrow as little as possible, whilst saving money for the things you'll need.

Costs of Buying :
Application fee Plus Survey £450
Solicitor plus searches = £800
Then There's the need to keep money in the bank just in case. Given that a gas boiler is about £1500 fitted, I'd be looking for £5K contingency.
Don't worry about Furniture too much. A second hand bean bag is £2. and I saw a leather sofa in a charity shop for £40 last week.
Try to get 2 beds, that way you could rent a room out to help with bills.

So of your £75 savings I'd suggest a £65K deposit. So the loan is what ? £70K ? Can you get a loan for that much ?

That's what you need to find out.

If you can : £70K will cost you about £350 a month, so less than the rent on a one bed flat, but add the council tax, the insurance, the water, the gas, the electric, I'm looking at £650 a month. With gives you enough to live on. BUT you'll need to go on a fixed rate and if you can rent out a room, you'll be okay.

I'm not personally keen on mortgage brokers, because they'll use smoke and mirrors to tell you have difficult it will be with your lack of credit history. Start by going into your own bank and asking them for a decision in principle.

White_Rose_Tight_ThaKnows

Cheers. Thanks to MSE I have about 7-8 banks!

I'd just hate to approach the agent, broker and solicitor to get more info and then have a gormless look of mug across my face.

White_Rose_Tight_ThaKnows

Would I tell the estate agent how much deposit I could afford? Or is it between me and the bank and the agent just wants to get near enough the house value?

ViolaLass

White_Rose_Tight_ThaKnows wrote: »

Would I tell the estate agent how much deposit I could afford? Or is it between me and the bank and the agent just wants to get near enough the house value?

The agent wants as much as they can get (without too much hassle). No need to tell them whether you could pay more than you've offered.

MJ12

Before talking about offers, you should call the agent and book a viewing with them. If you still like the house after you have seen the inside, then think about the finance.

Do some research on how much you can borrow based on how much deposit you have and your salary. Some lenders offer more, some less, some have good interest rates. 60% Loan-To-Value (LTV) mortgages usually have better interest rates than 75% or higher LTVs. It sounds like you can go for 60% :money:

Don't get pulled in by mortgages that offer attractive rates but have product fees. Some lenders will offer a no-fee version of a mortgage at slightly higher rate than the same mortgage with product fee. Compare mortgages with and without the product fee. You need to make sure the better rate can make you back the product fee before the attractive rate ends(i.e. goes back to standard variable rate, SVR), e.g. after 2 years.

When you make the offer, there is probably no harm going in slightly below the asking price. You can always increase later. Don't go over the maximum price you are prepared to pay.

Don't let the agent know how much you can really afford, the agent works for the seller, not you. And don't let them know how you are in love with the house already. They might advise the seller to hold out for higher offers if they think you will offer more.

BEFORE paying anything to and spending much time with solicitors, surveyors or banks, go to HM Land Registry's website and buy a copy of the title plan and title register. They cost £6 together, the plan shows you on a map roughly what's included, the register tells you who owns it, any restrictions on it, existing mortgages, if the tenure is freehold or leasehold, and usually when the owner bought it and for how much.

Rosetinted

White_Rose_Tight_ThaKnows wrote: »

No credit cards so probably no credit history

I have never possessed a credit card in my life but I had no problem passing a credit check for my recent mortgage application. Here's more info on how your credit rating is calculated.

As it's a pretty important factor in whether or not you'll receive a mortgage and it's free to sign up and check your credit rating with Experian and Equifax (just remember to cancel your membership before the end of the free trial period), I'd suggest doing so. It would be better to know one way or another before you get too invested in the idea of buying a place.

BTW, the simplest thing you can do to boost your credit rating is to make sure you're on the electoral register. If you aren't, get in touch with your local council and get the form filled out and submitted right away. It's easy to do and can only have a positive impact on your rating.

White_Rose_Tight_ThaKnows

Oh right, ta for that.

I'll set up the Experian and Equifax trials tonight.

I took myself off the open electoral register, but I am on the full, that shouldn't be a big deal should it?