First time single buyer

87mave

Hi there, I'm pretty new to all this first home buyer/mortgages things so just looking for advice/plans from those who have been through it all.

My current situation is that I have £6k in debt that I've got a plan to eradicate by December this year. I am also currently living with the parents working for £21k PA. (Which rises by approx £500 a year). Also I am single.

I am looking to eventually starting saving for my own first home. I will be able to put away at least £750 a month, I plan to save at least £10k, if not more dependant on when the right home comes up.

Now I know there's a lot of first time buyers scheme including the Help To Buy ISA which you can get government grants of up to £3k, but it takes up to 4 years to get that bonus in as you can only deposit a maximum of £200 a month into it (But are able to make a deposit upto arond £1200 in the first month).

What would other peoples suggestions be? What would be the best route and what experiences have others had with first buy schemes?

Thank you.

musafir05

Help To Buy ISA is free money therefore there is no harm in starting up a account and depositing funds. You can withdrew the funds anytime and receive a part bonus using a solicitor. The longer you have the ISA account the more bonus you will be entitled too.

Loose the debt and make sure you check your credit report and correct any issues.

87mave

Thank you, so it makes sense to open up the ISA account and deposit the £200pm in there, whilst saving up £550 or so elsewhere. Never really thought of that!

Yes the debt is currently the first priority, my credit is poor and will strive to get that better.

dc197

I was a first time single buyer too, 7 years ago.

What's the £6K debt from? No need for too much detail, just enough to help people give the best answer.
Is the £750 a month you'll save currently going towards the 6K debt?

Don't forget you will need to spend some of your savings on buying costs, including stamp duty. You'll also need to buy furniture, DIY equipment, TV, etc. So even if you have 10K saved, not all of that can go towards a house, you'll need to keep some back.

When you get your house, acquire furniture from FreeCycle.org - people there will be happy to give their old sofas etc away to a new home-maker.

Good luck.

87mave

dc197 wrote: »

I was a first time single buyer too, 7 years ago.

What's the £6K debt from? No need for too much detail, just enough to help people give the best answer.
If the £750 a month you'll save currently doing towards the 6K debt?

Don't forget you will need to spend some of your savings on buying costs, including stamp duty. You'll also need to buy furniture, DIY equipment, TV, etc. So even if you have 10K saved, not all of that can go towards a house, you'll need to keep some back.

When you get your house, acquire furniture from FreeCycle.org - people there will be happy to give their old sofas etc away to a new home-maker.

Good luck.

The £6k debt is a total of a few things. £4.2k I have left was from a loan for a car from back in 2008 which defaulted a few years later. £750 on CC, £850 on overdraft or around. (I made some stupid decisions!) I've set up a plan to repay the original loan interest free with a debt collection agency at £500 a month, then the CC and overdraft I will budget it into it as my earnings go in. It will be totalling £700odd a month over 9 months. When that's all clear I will be saving up for a deposit.

I will still have around £300 a month left over in my pocket (after bills) which could go towards a new car at the end of the year. But that's not for definite, and I will unlikely spend the whole £2700 on a car.

Yup, I use freecycle. I'm fortunate to be pretty nifty when it comes to getting bargains, I'm not too fussed about 2nd hand things. I do have a lot of possessions at this current time in my parents home, due to renting out in the past.

MrJB

The default may cause you severe problems in obtaining a mortgage, particularly if you're still paying it off.

What is the APR on your credit card? I'd focus on paying that off first assuming you don't have an interest free period.

Have you checked affordability? Are house prices realistic in your area based on 21k p/a?

87mave

Yeah I understand that it will go against me in a mortgage application, but I understand it can vary between lenders. The debt will be completely wiped out long before I make an application though.

I'm unaware of the apr on the CC, it's with Lloyds who I bank with.

Affordability should be fine in my area, I'm looking at no more than 1 (Or even 2) bedrooms circa £100k, but that won't be until a few years time, and my salary will increase by then. And yes, I am aware of housing prices rising.

musafir05

Also look into getoutofdebt forum for advice on how to wipe the remaining debt and remove default.

I wiped a few CC debt by challenging the debt years ago for my mother.

87mave

Yeah I'd already made a thread and made myself a plan, thanks.

edit: Also noticed that the default date was in 2010, so it will drop off my account this year. But I'm assuming a lender will ask about defaults anyway, would I need to advise them of this or not? Or would they know anyway?