First time buyer - where to start?

gill15

Hi, I am just looking for a bit of advice please. I am 27 and looking to buy my first property. At the moment I am living at my parents. I currently have 20k in savings towards getting a property and was planning on around 15k deposit and the remaining 5k for all other expenses that will come up. I have a salary of 22k at the moment, no debt and minimal outgoings apart from a car etc.

I am a bit lost at where to start in the full process and what order I need to do things eg a lawyer, a mortgage advisor etc. and also unsure what amount I would get for a mortgage as a single person on not a great salary but a reasonable deposit. I was thinking my max would be 90k for a 2 bedroomed flat/house which from what I have seen in my area is doable.

Am I being realistic? Sorry if this seems a silly question but I feel like I am lacking people I can objectively ask about these things and get accurate helpful advice. I dont know anyone else who has bought a property alone and a lot of my friends have went through help to buy which seems to offer a lot of help in the full buying process as well as with the deposit.

Any guidance appreciated!

smile88egc

Hi Gill,

How long have you been saving? Do you have a help to buy ISA?

If you can get to £18k for the deposit plus the 5k for fees etc, then you'll be looking at a 20%deposit which will get you a much better value mortgage on a 90k property.

The next step is to start booking viewings to look around properties and find a mortgage broker who can recommend a mortgage product.

glasgowdan

1. Look up a mortgage lender, ask to do an approval in principle. This takes 10-15 mins and tells you how much you could borrow.
2. Go look at houses. Find one you like. Make an offer.
3. Repeat the above 20 times until you find one you like that someone's willing to sell you at a price you like.
4. Get a solicitor to start formal proceedings.
5. Call the mortgage lender to do the full application.
6. If you're in England, get a home report done.
7. Details - any issues on home report? Solicitor will be in touch a few times if they find anything.
8. Once the agreed date arrives, make sure the mortgage is ready.

Blibble

I was in your shoes not so long ago. First up, go here:

https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

This is Santander's calculator for brokers and will provide you with a rough idea how much you could get as a mortgage (maximum).

Then, in this order:
- Set a budget (taking in to account current and future saving)
- Reserve / make an offer (perhaps contigent on agreement in principle)
- Offer accepted - instruct solicitor and full mortgage application

This will give you far more detail:
http://www.moneysavingexpert.com/mortgages/buying-a-home-timeline

The process is a tad more complicated if you're selling, but the above should give you a good starting point.

*One final point - you'll want to budget more than 5k for ancillary costs. If you're selling, fees alone are £5000 or so (I'm currently going through a HTB mortgage application ex-chain - fees are about £3500 - £4000). Then there'll also be immediate maintenance cost / unforeseen costs as part of the move. As long as you're honest with yourself, you can't go wrong with it.

Hoploz

The first step is to see an independent mortgage advisor. What you suggest sounds do-able indeed.

A professional, who looks at your full situation (type of employment, length of contract, length of time employed, any debts or as yet unknown problems on your credit file, current expenditure info) will be a much more reliable source than any online tool.

Ask around for a recommendation of an independent advisor - if anyone else you know has used a mortgage advisor they may recommend them.

You can get an idea by using one of the advisors attached to estate agents, but it's not ideal to have given full chapter and verse to them for a couple of reasons. Firstly, they are not truly independent (they don't have access to all products, as they only work for certain lenders) Secondly, they will keep all your records on file so they know the maximum you can afford to offer on any property they may like you to buy, whether it's worth it or not!

If you can't find a local advisor by word of mouth, then have a look online and you'll find people advertising.

wantonnoodle

We're FTBs as well, but a little bit further down the line than you.

We started by getting an appointment with an independent mortgage advisor, who came recommended from OH's colleague at work. At this point he sat down with us and went through all our salaries, outgoings, credit reports, lifestyle info etc, etc. From this, he calculated our absolute max (which he refused to tell us - to prevent us from overreaching) and then wound that back to a sensible max of £250k (which will just about get what we want in our area).

With this information, we then began our property search, registering with local EAs, setting up alerts on Rightmove, onthemarket, zoopla, primelocation etc. so that we could cover as much of the market as possible. We first offered on a house 3 months ago, but were outbid, but have just this week offered on our second house, which we are waiting to hear back on.

In the mean time, we also got a list of local solicitors who do residential conveyancing, and emailed them asking for quotes on how much it would cost for buying at £250k (our max) in our area. We got that back, and put it in a spreadsheet for comparison. A colleague of mine who is also househunting recommended a solicitor to me which happened to be one we quoted for, and we are minded to instruct them once we have an offer accepted. Our mortgage advisor has also told us, if we need it, he can recommend a solicitor, so when we get to that point, we may get him to get us a quote, just for comparison purposes before making a final decision.

Our mortgage advisor is really helpful though, he's given us loads of advice about househunting and how to assess the value vs the local market etc, and he's going to help us every step of the way, which makes it so much less scary. As such, I would recommend that your first priority is to find a good independent broker who is comfortable answering the million and one questions you'll likely have during the buying process and who can help guide you through it.

gill15

THanks for all the help.

I have been saving for a while but a large chunk of the savings are from my dad from money he received after my mum passed away. Does this affect my application for a mortgage also? I have been told by some people that I need something formal to say that this has been gifted and isn't a loan or something like that. I don't have a help to buy ISA as I already have a cash ISA I had put money in this financial year and therefore was told I wasn't eligible to open one. Would be nice to have had the option to boost my savings a bit more.

Another issue I may have is that I have been in my current job for 8 months and not sure if I need to wait until it has been over a year.

I am not selling a property and in Scotland too so think this may reduce some of the fees and extras.

Sorry if these seem silly, I am just keen to start the process soon and feeling very clueless. Also concerned that I will end up getting ripped off in some way in a car salesman type situation.

glasgowdan

Gill, whereabout in Scotland are you? I really don't see the need for an Independant Mortgage Advisor as the online tools, plus a bit of your own calculating, are more than enough to figure out what you can afford.

How much do you pay for digs just now per month? How much could you pay? How does this compare to what the online calculators are telling you?

I can recommend a conveyancer depending on your location.

Peccary

you solicitor should either prepare a form for your Dad to sign or ask for a letter to say that the money is a gift and he expects no share of the property.
We also had to provide the following from the gifter: certified ID, a bank statement showing the funds in their account and one showing the transfer to my account. This was with Halifax in England

metamatic

5K fees seems very high for a first time purchase.

I'm completing next week on a 3 bed semi priced at 140K.

I got a fee free mortgage from first direct which also offered a discounted homebuyers report for 200.00

My solicitor has charged me 800.00 including VAT and all the search fees. Then there is stamp duty on top of that of 300.00 although I think you will be exempt from this.

I reckon you can do it for little more than a grand.

glasgowdan

The OP says £5k to cover all the expenses, which is totally normal. We're talking carpets, furniture, solicitor, possibly any further surveys, decorations, removal costs, contingency. If you can move into a first home for little more than a grand, please list all the costs below: