Getting a mortgage at 20 - help?!

6397

Hi,

due to working from the age of 12, I'm now 19 and in a place financially where I'm thinking of buying my first property (with a friend).

By next summer (when my friend will be done with college), I'll have a 60-90% deposit (depending on how expensive the place we chose to buy is).

Anyway, I'm obviously new to this whole "adulting" thing and have a few (probably basic/obvious) questions...
1. Is it common for banks to allow you to pay off your mortgage QUICKER than the regular term you agreed on? We'll probably get a 5 year mortgage, under my friend's contracted work, but with me being self-employed, and him doing some self-employed work too, we're likely to be able to pay it off in 6-24 months, rather than 5 years.
2. When you take out a joint mortgage, does it have to be split 50/50? Even if we go for the most expensive properties we're looking at, I'll still be paying 60% as a deposit, and after it's paid off I'll have paid 75-85%. How do we make sure we each keep our own share?
3. Even with a deposit of 60 percent or more, will credit score have any effect on us getting approved? We'll only be 20 and 24, neither of us have ever had a credit card, taken out a loan, etc, so just have an average credit score.

Thanks in advance, sorry if the questions were dumb :j

chelseablue

Most mortgages allow overpayments, usually 10% per year of the outstanding balance


Im sure you've been advised this already but I would be wary of buying with a friend, so many things can wrong. What if you fall out with each other? Or one of you wants to move out?

GLM71093

Hi,
Well done and congrats on your situation, you are very lucky.

I cant offer much help (only 23yo but have just brought my first house with my other half) but i do know when we went for a meeting at the bank when getting our mortgage, they have different mortgages (obviously) and some have early repayment charges and others don't, so you might be best looking into that. If you are planning on paying early then may aswell get one without a charge.

We had to sign some paper work to say we was splitting it 50/50 but we could have chosen a different split if we wanted.

Im not sure on credit score, i guess as long as neither of you have an awful history then should be fine. My boyfriend never had a credit card/ loan and i had only had a credit card which i pay for my fares on then pay it off in full.

hope this helps in some way

FTB-James

If you can pay it off in 6 - 24 months, why not continue saving and buy it out right in full?

csgohan4

Avoid buying with your friend at ALL costs. It really isn't worth the potential hassle no matter what your friendship is now.

Money and friends don't mix.

If they move out and get married, your still liable for the mortgage and they still own half of it unless you can buy them out. They can still demand half when you sell it too despite not paying the mortgage.

Why not one of you buy and the other one is a lodger, might be easier.

Well done for saving alot of money, but it might be better to buy a place by yourself or with your long term partner

spadoosh

1) Yes it is, some charge for repaying early, some dont.

2) No you dont, sort the issue regarding ownership wit h a solicitor.

3) It might do but doubt it will effect you that much. Witha 60% deposit any lender would be more or less guaranteed to get the money back should you not pay by repossesing the house. You would be low risk. Affordability (of mortgage repayments) will be more likely to effect your ability to borrow.

Not going to say dont buy with your friend but echo the sentiments of the above posters with a number of potential complications. The reality is though its no different than buying a property with a partner which very few seem to have issues with. Try and make sure youre protected, get your own solicitor for advice instead of sharing one.

fru-girl

Get a solicitor - not the same solicitor as your friend. You need a 'trust deed' drawnl this specifies % shares - who contributes what and who gets what. You can do any split you want, even 1-99% provided your friend agrees on the %.

Get a broker as you both seem to be self-employed. Is the mortgage amount affordable as a joint mortgage for both of you?

minimike2

spadoosh wrote: »

1
Not going to say dont buy with your friend but...

I will.

DON'T buy with a friend.

It always ends in tears.

ACG

If you can afford it, I would avoid buying with yout friend also.

This sounds really condscending I know, but your 19/20. So much will change over the next couple of years, im 31 and I look back to when I was 20 and my mates now are not my mates from then in the main. What happens if one of you gets a partner, they move in - how do you split it with the bills? Is it still 50/50 or a third each? Or you have an argument over something? Or one of you wants to sell. You are jut opening yourself up to a nightmare.

Assuming you do agree to do it, I bought my house putting down about 99% of the deposit. We both pay £x in to a joint bank account and that covers our bills and anything to do with the house. If we split up, I get my deposit back, she gets hers and then we split the rest 50/50.

On a side note you appear to have a decent deposit, but doing a mortgage over 5 years will make your repayments fairly high and that will be taken in to account for affordability. You may have no option but to do it over a longer period, although if you get a product that allows unlimited overpayments you an hammer the mortgage and get it paid off as quickly as you want.

I bought my house at 23 and I remember as soon as my offer thinking s***, what have I done. Turned out alright in the end but its a pretty big step.

6397

FTB-James wrote: »

If you can pay it off in 6 - 24 months, why not continue saving and buy it out right in full?

We're both in bad living situations, however renting together and saving up is a possibility, although it'll take a year or two longer.

seatbeltnoob

work harder so you can buy the property yourself. I would prefer to be a live in landlord and rent out the spare room than be a co-owner of a house.

being a co-owner is tricky, you can't really consider the property yours, you have to make joint decisions on everything. Depending on the arrangements you have, after the mortgage has been paid off you may find yourself still paying rent to the other owner if you are the only person occupying the house. The other owner may decide to put a tenant in his/her room if you disagree they would probably ask you to pay them rent to live in the house alone.

I've seen this with other part own properties, where individuals buy half the house with an investor. So after the mortgage is paid off they pay rent for the other half of the property!