First Time Buyer Advice Appreciated

ViolaLass

gohan2091 wrote: »

hopefully be earning more money via a 2nd job, increased hours or a better paid job. I would select a fixed rate mortgage so no nasty suprises for a least a few years.

You need to sort the 2nd job, increased hours etc first.

Also, looking at your GP's bills wouldn't help but looking at your sister's would?!

Something doesn't add up.

AnotherJoe

gohan2091 wrote: »

My income will go up each year until I reach £17,978 in a few years time because I am on Agenda for Change pay and it was mentioned at my interview 6 months ago that the 34 hours would turn into 37 eventually. I am always keeping an eye out for IT jobs but I don't have IT networking skills (think LANs, WANs, IP addresses, configuring networks and network access) but I am very good at troubleshooting and I can build PCs from parts. I don't want to learn networking, I've done enough education in my life and it hasn't gotten me anywhere. I came here for mortgage advise not career advice but I will keep my eye open for higher paid jobs.
.

With an attitude like that you are already setting yourself up for a dead end low paid job. I've been in IT for more years than I care to mention, it's been learning new stuff all the time and the rate of change is speeding up.

And many old skills are becoming irrelevant rapidly

Building your own PCs or fault finding being an example, these days they are going the way of toasters, it doesn't work, get another one. Everything is moving to the cloud, the number of fault finding fix type jobs is plummeting in five years time no one in the NHS will be repairing computers.

You said you came here for mortage advice not careers but thats what you need because people on the lowest paid jobs in the most expensive areas of the country don't get to buy a house. So you need to change something.

gohan2091

[FONT=&quot]My BSc was in Business Computing, at college, not university. We only did a couple of networking modules which were fairly simple, and we did a couple of programming modules too which I struggled with but got through it in the end. The bulk of the course was based on computers and technology in business. I’ve always had an interest in IT and technology which is why I did the course, it cost me nothing and I am glad I did it. I said I don’t want to learn networking because it’s not something that interests me and I found it challenging. That’s not to say I couldn’t go on Youtube and watch a crash course on networking, there are plenty of videos on there. I am fully aware IT changes rapidly, I’ve watched it change from first school to the present. It’s changed massively and will continue to change. I keep up to date by reading technology articles and forums as it’s one of my hobbies. I don’t however want to participate in more courses but may try Youtube to beef up the networking area. [/FONT]

[FONT=&quot]I only looked at shared ownership based on the advice the Lloyds bank mortgage advisor gave me and I am also interested in properties where you buy it outright. My sister has told me her costs below (this is based on herself and two young children). [/FONT]

[FONT=&quot]Water = 30[/FONT]
[FONT=&quot]Electricity = £25[/FONT]
[FONT=&quot]Gas = £25[/FONT]
[FONT=&quot]TV License = £12[/FONT]
[FONT=&quot]Internet/Phone = £25[/FONT]
[FONT=&quot]Food = £280[/FONT]
[FONT=&quot]Home Contents Insurance = £8.50[/FONT]
[FONT=&quot]Total = £405.50[/FONT]

[FONT=&quot]I think my sisters rent and council tax is paid for her because she is on benefits (she is coming off soon). Why would my grandparents costs not be useful? Because there are five adults living here and I am looking for one bedroom apartment for one person. Why doesn’t that add up ? The cost for one person is going to be cheaper than five.[/FONT]

[FONT=&quot]Taking my sisters figures AS A ROUGH IDEA and adding a ROUGH IDEA of a mortgage, and council tax (band C) for myself[/FONT]

[FONT=&quot][FONT=&quot]Water = 30[/FONT]
[FONT=&quot]Electricity = £25[/FONT]
[FONT=&quot]Gas = £25[/FONT]
[FONT=&quot]TV License = £12[/FONT]
[FONT=&quot]Internet/Phone = £25[/FONT]
[FONT=&quot]Food = £280[/FONT]
[FONT=&quot]Home Contents Insurance = £8.50
[FONT=&quot]Council Tax = £90[/FONT]
[FONT=&quot]Mortgage = £425[/FONT][/FONT]
[FONT=&quot]Total = [FONT=&quot]£[/FONT][/FONT][/FONT][FONT=&quot][FONT=&quot][FONT=&quot]930.50[/FONT]
[/FONT][/FONT]
[FONT=&quot]£100,000 one bedroom apartment. £10,000 deposit, LTV of 90% leaving me with approximately £10,000 left in savings by the end of this year. Mortgage rates can vary and I understand it's common for the initial rate to increase after a fixed period of years. I know it's also common for people to re-mortgage after the fixed period ends to [FONT=&quot]get a better rate[/FONT]. I understand there are fees involved with a mortgage that can be paid at the start so no additional interest is charged. For an estimate, let’s say the fees are £1200 this would be paid using part of my remaining deposit. I don’t know why people here are saying Norwich is one of the most expensive areas of the UK to buy, looking at Zoopla heatmap for UK property prices, it doesn’t seem so. Not the cheapest by far though. [/FONT]
[FONT=&quot]
[/FONT][FONT=&quot]My net income is actually closer to £1050 than £1000 and every year it will increase until I reach around £18k. If I sub[FONT=&quot]tract[/FONT] £1050 from the estimated cost, yes it is tight but [FONT=&quot]it looks like I[/FONT] could afford it. Things like ground rent, I don’t know if I would need to pay that (something to look into[FONT=&quot]) [/FONT]and yes if mortgage rates increase, I would be in trouble if [FONT=&quot]my income doesn't improve [/FONT]but I would have a security blanket for the first few years as rates would be fixed and hopefully by then I would have a 2nd job or in a higher pay band. I don’t understand the aggression on here, I am [FONT=&quot]looking at my options[FONT=&quot] and if it won't work then it won't work but [/FONT][/FONT]I need more explanation as to why. Maybe someone can write me up a costings like I did?[FONT=&quot] but [/FONT]I don’t expect to be buying a new roof on a new property and adding costs like haircuts (I have no hair), clothing (I have plenty and won’t need more for ages), travel (I don’t travel), dining out which I don’t do either are unfairly inflating the monthly cost projections. With this, I still have over £8k on appliances and emergency repairs and my savings will will continue to build up as I work. [/FONT]

Kynthia

You need to predict a year's worth of costs and divide it by 12. It needs to be realistic and maybe slightly pessimistic to give you a safety buffer.

So below you've listed some monthly expenses:
Water = 30
Electricity = £25
Gas = £25
TV License = £12
Internet/Phone = £25
Food = £280
Home Contents Insurance = £8.50
Council Tax = £90
Mortgage = £425

Is it realistic to say you won't buy any clothes over the next year or two, have no travel costs and never spend any money socialising/entertainment (going for drinks, cinema or a bite to eat with friends)? No holidays and no buying birthday or Christmas gifts for anyone?

So are your plans to buy a flat as then you'll need many hundreds if not more a year for ground rent and service charges? Or are you hoping to buy a freehold property, as you'll need buildings insurance and not just contents, plus reserves for repairs.

Perhaps spend a couple of months or more writing down every single penny you spend now; every newspaper, chocolate bar, cinema trip, prescription, bus fare, coffee, lunch out, lottery ticket, etc. It will give you an idea of the spends you incur outside of the list of bills you've costed so that they can be factored into your budget.

gohan2091

My only travel costs are £24 a month bus pass which I wouldn't need if I can get a place close to the hospital where I work. Correct, I don't drink, no lunches out, I play the lotto for free online, probably visit the cinema only once a year (if that), I don't eat with friends, I don't have holidays, I don't buy gifts, not expensive ones anyway. Chocolate? part of my shopping bill (£1), I don't take prescriptions, coffee is part of my shopping £2.40 which lasts me about a month. My spending is really very low and I don't need a lot of money to keep myself entertained. I don't plan to buy a flat but a one bedroom house. I need to research ground rent a bit further but would a house incur this?

Reserves for repairs are part of my remaining deposit which I can slowly build up over time. Building insurance other than contents? I would have to look into the costing of that too I guess, didn't think of that one.

It would be nice to increase my income, I agree things are going to be tight but I do believe I can do it. Whether I should or not is another question. I am considering holding off.

Harper123

If you do shared ownership and own 25%, then won't you have to pay rent on the 75% that you don't own? Along with the mortgage?

ViolaLass

If you think it can work, just go and do it! Get a broker, find a property etc.

ap1985

Kynthia wrote: »

You need to understand all the regular monthly costs of living on your own and then what buffer you'd need fir one off costs like repairs, maintenance and other unexpected bills.

So do some research on these costs and what others there may be over a year:
Gas
Electric
TV licence
Council tax
Water
Mortgage/rent
Service charge and ground rent
Phone/Internet
Food
Travel
Haircuts
Gifts
Holidays
Clothes
Social/entertaining
Contents insurance
Car running, mot and service, parking, insurance, breakdown cover, etc.
Buffer or initial costs for boiler repair, decoration, furniture, bedding, kitchen utensils and appliances, bills for ad-hoc works to the building, etc.

When you understand these then you can think about whether you can afford to live kn your own, whether renting or buying. Otherwise renting a room from a landlord or a shared house might be the best option for moving out.

Not forget the Insurances, i.e. life insurance, building and contents insurance...it's one thing after another...Also if you buy a flat you have to think about maintenance costs, ground rent so on!

csgohan4

gohan2091 wrote: »

My only travel costs are £24 a month bus pass which I wouldn't need if I can get a place close to the hospital where I work. Correct, I don't drink, no lunches out, I play the lotto for free online, probably visit the cinema only once a year (if that), I don't eat with friends, I don't have holidays, I don't buy gifts, not expensive ones anyway. Chocolate? part of my shopping bill (£1), I don't take prescriptions, coffee is part of my shopping £2.40 which lasts me about a month. My spending is really very low and I don't need a lot of money to keep myself entertained. I don't plan to buy a flat but a one bedroom house. I need to research ground rent a bit further but would a house incur this?

Reserves for repairs are part of my remaining deposit which I can slowly build up over time. Building insurance other than contents? I would have to look into the costing of that too I guess, didn't think of that one.

It would be nice to increase my income, I agree things are going to be tight but I do believe I can do it. Whether I should or not is another question. I am considering holding off.

The lenders don't just look at your affordability now, but also when interests rise an extra 6-7% as part of stress tests. I seriously doubt you could afford that from the numbers your putting out.

Lenders don't care what you spend on a haircut or dinner, they take the ONS figures anyays so people cannot manipulate their accounts for mortgage purposes.

I think you should live within your means comfortably, not over stretch yourself or you will spiral into debt.

Look at the debt free boards for cases there.

What is the main reason for wanting a house?

Is it cheaper than renting? Is it investment?

gohan2091

From the two shared ownership properties I have looked at, both are 75% purchase and there is no rent ot pay on the remaining 75% so I would only be paying mortgage not rent. I agree, it would be tight and maybe I am overstretching. I want to buy because the monthly costs appear to be cheaper than renting and I am actually investing into something that is mine rather than throwing money away. Most of the monthly costs such as ulitility bills, council tax, TV license, phone, broadband, and food are going to be paid regardless whether I am renting or buying so it's really only mortgage monthly charge vs rent monthly charge and mortgage appears to be cheaper. Yes, I am aware of repair costs, insurance on top. I am going to speak to a mortgage advisor.