First Time Buyer Advice Appreciated

gohan2091

I am 30, I work for the NHS on £15,250 (actually £13,800 since I work 34 hours). I live with my grandparents, I have no children, I am not in debt and have almost £18,000 in savings. I am looking to buy a property and I would appreciate any help you guys can offer me. I am not knowledgeable with house buying, borrowing money and legal things. I have read the "MSE First Time Buyers’ Mortgage Guide 2016" as well as general Googling to try and understand what a mortgage is, the types of mortgages available, interest rates, fees and other things involved.

Today I visted Lloyds bank and spoke to a mortgage advisor. He said I have a good credit rating and based on my income, I would only be able to borrow up to £56,000 for a mortgage which makes buying even a one bedroom apartment out of my reach (even with the Home-to-buy schemes). He suggested I look into Shared Ownership where I would buy 25/50/75% of a property and pay a reduced rate of rent. I could then buy back more or all of the property once I can afford it.

Tonight I submitted an application on the Help to Buy East/South East website. I know I want a 1 bedroom apartment/house in the Norwich area and under £125.000 (to avoid stamp duty) but I am not sure what I should do next. I have already found two properties really close to my work that are under Shared Ownership here and here. Should I now setup a Help-To-Buy ISA with Lloyds bank? There seems to be a lot of mortgages available and I assume not all mortgages would allow Shared Ownership. Should I contact London & Country for some free advice? Would they be able to select a mortgage that would work well for me? Should I visit local estate agencies? Things like legal costs, solicitors/conveyancers etc I know very little about to be honest, scare me a little bit.

MortgageMamma

Hello


I've just read your post and the first thing that occurred to me is that you are going to find it very difficult to support yourself/home/mortgage on 13800, particularly as you live in the South.


When buying a shared ownership property you pay rent AND a mortgage so it doesn't necessarily work out any cheaper than a whole mortgage.

Its good that you want to get on the property ladder, but if I was you I'd honestly leave it until you are earning around the 18k mark. Another alternative you could consider is buying an investment property in the hopes of making a profit with a view of using that profit to fund a future house purchase. If you want to consider that option its a steep learning curve for a first time buyer and you will need a lot of advice and be prepared to take risks.

csgohan4

Have you looked at the Cons to Shared ownership little Brother?

gohan2091

MortgageMamma wrote: »

Hello

I've just read your post and the first thing that occurred to me is that you are going to find it very difficult to support yourself/home/mortgage on 13800, particularly as you live in the South.

When buying a shared ownership property you pay rent AND a mortgage so it doesn't necessarily work out any cheaper than a whole mortgage.

Its good that you want to get on the property ladder, but if I was you I'd honestly leave it until you are earning around the 18k mark. Another alternative you could consider is buying an investment property in the hopes of making a profit with a view of using that profit to fund a future house purchase. If you want to consider that option its a steep learning curve for a first time buyer and you will need a lot of advice and be prepared to take risks.

I don't want to stay at my grandparents for much longer as I have already been here for a number of years, travelling to work is time consuming and problematic due to multiple buses and long walks home and I don't like the idea of paying for a place that I am not investing into. I don't want to buy a property as an investiment, that's way out of my comfort zone. I don't understand why you say it would be very difficult. I have compared mortgage monthly fees to renting here and it appears cheaper. The upfront costs can be paid with my savings and the rest can be put towards a small deposit and furtniture/appliances. The earnings from my job should be enough to pay off the mortgage and additional rent (which in one of those properties would be 0)

Would you recommend I speak in person to a mortgage broker?

csgohan4 wrote: »

Have you looked at the Cons to Shared ownership little Brother?

I know some of them such as any maintenance costs would be 100% on me, if the property increases in value, so does my repayment and rent. It would not be wise to do up the property (not like I can afford to anyway) as it would again increase the value of the property and cost me additional money. Anything else?

amnblog

gohan2091 wrote: »

Tonight I submitted an application on the Help to Buy East/South East website. I know I want a 1 bedroom apartment/house in the Norwich area and under £125.000 (to avoid stamp duty) but I am not sure what I should do next.

Call H2B South East?

https://www.helptobuyese.org.uk/contact-us

With regard to a mortgage they will put you in touch with a broker that handles shard ownership cases every day.

AnotherJoe

You should focus on a job / career where you'll earn much more, or look at moving well away from the hugely expensive SE where you basically dont earn nearly enough to purchase.

And maybe my geography is off, but is Norwich really classed as SE England????

FWIW many here think shared wonership is clsoe to a scam, and in nay case, nota good idea, you end up with all the downsides of owninga property sucha s house maintenance, but only own a percentage, plus you pay rent.

Anyway, bottom line i think you dont earn enough to buy, if you could somehow manage it you'd be living hand to mouth.

csgohan4

as Above said, your salary is on the low end and you will struggle to find a house you want and can afford.


Getting and buying a mortgage/house is more than just being able to pay the mortgage repayment at this time, but about affordability and be able to withstand increases in interest rates to above 5%


There's always more to it than 'it's cheaper than rent' don't fall into the trap. There's maintenance for example, no crying to landlord when you got to get a new 2.5k boiler or 10k roof, insurance, service charges if applicable e.t.c

gohan2091

I consider Norwich to be East but I don't know. Maybe contacting help to buy to access shared ownership brokers would be a good idea or maybe to contact London and country before this and look into full property mortgages? The Lloyds mortgage advisor said I should be able to afford shared ownership, is he wrong? I am only looking at new properties for the moment so I don't expect to be buying a new roof or boiler anytime soon. I feel lucky to have a job, I was long term unemployment in 2011 and that was not pleasant it's very well saying get a better paid job but how? Maybe I should work a 2nd job? Its not really an option to stay at my grandparents for much longer, it's overcrowded as it is.

AnotherJoe

gohan2091 wrote: »

I consider Norwich to be East but I don't know. Maybe contacting help to buy to access shared ownership brokers would be a good idea or maybe to contact London and country before this and look into full property mortgages? The Lloyds mortgage advisor said I should be able to afford shared ownership, is he wrong? I am only looking at new properties for the moment so I don't expect to be buying a new roof or boiler anytime soon.

I feel lucky to have a job, I was long term unemployment in 2011 and that was not pleasant it's very well saying get a better paid job but how? Maybe I should work a 2nd job? Its not really an option to stay at my grandparents for much longer, it's overcrowded as it is.

I'm saying, do you think thats a good idea? Have you done the sums for SO? What tiny proportion (I'm guessing 25%) would that buy?

There are two ways to get a better paid job.
One way is to get a better paid job. Retrain, do something different with better pay.

Another way is to move somewhere where the housing is far cheaper. If housing was half the price, and you stayed on the same salary thats probably equal to a 50% pay rise. If you dont have the commute costs, maybe its a 100% pay rise.

You are in the NHS, are there similar jobs elsewhere you can transfer to?

gohan2091

I haven't done all the sums because I am in the dark about some of the costs. What I know is I have £18k in savings which is rising by £800 each month and that has to help somewhere. I don't go on holiday, I don't dine out, I don't have car expenses, I have no dependants, my costs can be kept to a minimal.

So I need to talk to someone to go over my earnings and costs in detail, who would be the best to contact? I am looking on the NHS website for jobs and will be applying for a few that are higher band but I don't think I would get anywhere. I have a BSc in Computing and don't want to go through more education. Training I would be happy to do if I could find a job that could offer me on-the-job training. I don't want to relocate, my family is here and I don't want to be too far away.

ViolaLass

Talk to your grandparents. What do they spend on elec, gas, water, council tax, food etc each month? It'll give you an idea.