Planning to buy

Edinburghirl

Hi All

My partner and I are currently renting (Scotland) and, due to changes in our salary, are about to be able to start saving on a monthly basis. I like to have a plan and a goal in mind, so have been doing my research into buying options. Problem is I keep getting conflicting information and wondered if anyone in the know here can help?

We currently pay £425 rent per month and like where we live.

Option 1) We sit tight, save our monthly amount towards a 90% LTV mortgage (this will probably take around 2 years).

Option 2) We save a small amount and then I utilise the LIFT scheme - where I would own say 70% of a property and the government would own 30%. The deposit required would be significantly less and the repayments lower each month. This would be done in my name as I am a first time buyer and my partner is not. We would work something out in relation to him contributing. I'd imagine this could be achievable within 6/9 months.

As I mentioned above we have had various (non-professional) advice - ranging from 'move as soon as you can, renting is dead money' to 'sit tight and try to stretch yourself when you do move'.

Any advice or discussion would be really beneficial. I have tried to do my research before asking, I hope this comes across.

Thank you in advance,

S

MrJB

Can you personally meet the affordability criteria of a 70% mortgage on the property you desire? Is your partner happy about contributing for a property which he will have a limited legal interest in?

Pixie5740

Option 2 might be an issue due to eligibility. Can you get a large enough mortgage in your name only to purchase under the LIFT scheme? You won't be able to take his income into account for the mortgage and the mortgage lender would could require him to sign a document saying he has no interest in the property since he will be contributing towards the deposit, living in the property but not named on either the mortgage or the deeds.

Edinburghirl

Thanks for the prompt responses. I was making an assumption I would qualify and could meet affordability criteria based on the fact that a colleague of mine recently purchased using the scheme, however I will check this out.

He is happy to have limited rights to the property (the lower repayments will mean we can continue to save over the medium term).

I'm just not sure if it would be better to forget the idea and actually just focus on saving towards a standard 90%LTV.

MattAttack

Congrats! You're in a position to be able to put money aside and buy, well done!

The 90% seems more attractive to me, you're closer to owning your property but it's whether how long are you willing to wait and save for. Best of luck.

Edinburghirl

MattAttack wrote: »

Congrats! You're in a position to be able to put money aside and buy, well done!

The 90% seems more attractive to me, you're closer to owning your property but it's whether how long are you willing to wait and save for. Best of luck.

Thanks, Matt. I'm more than happy to wait, I suppose the concern is that the 5k/year I'd be spending until that point would be dead money. The difficulty is comparing that to the disadvantages of LIFT compared with regular mortgage. It's a toughie!

I won't complicate things further by mentioning that I can have a puppy once I own a house...

Pixie5740

Have you spoken with a mortgage broker yet? I imagine that there would be a smaller pool of lenders to choose from using LIFT compared with waiting and getting a 90% LTV mortgage. Again using LIFT might narrow your choices when you come to remortgage so for that reason alone I would wait and save up the 10% deposit.

There's also a ceiling price with LIFT which may or may not be an issue depending on where you want to buy.

Edinburghirl

Pixie5740 wrote: »

Have you spoken with a mortgage broker yet? I imagine that there would be a smaller pool of lenders to choose from using LIFT compared with waiting and getting a 90% LTV mortgage. Again using LIFT might narrow your choices when you come to remortgage so for that reason alone I would wait and save up the 10% deposit.

There's also a ceiling price with LIFT which may or may not be an issue depending on where you want to buy.

Thanks for the response! I haven't yet spoken to a mortgage broker, just exploring initial options. It seems as though holding off for the 10% deposit may be the best, and least complicated option. Seems so far away...will definitely have to break it down to little goals and stay focused!

Thanks again.