First Time Buyer Advice Needed

tabz89

Hi All,
I am currently looking at buying my first home and i do need a little advice.
I have been saving a deposit for the past year or so and i currently have 16k saved. (aiming for this to be 20k in next couple of months)
The problem I have is that I have now seen a house for sale which is exactly what I need, correct area so I need to start getting the ball rolling in regards to a mortgage. Would I be right in thinking I should ideally get a mortgage offer in place first before starting to negotiate prices?
The property is for sale at 135k and is in relatively good condition, I would plan on modernising the property over time while I live there.

My salary is 25k, I am 28 I have no dependants. My outgoing per month are very low. around £50 for phone contract and car insurance. But with everything time is very important to me, I have been looking around at different mortgages for a while but I just don't quite know which is best for me, I have done credit checks online but all that comes up is that I have no credit history to show, I have never had a credit card although I did have a small loan of 2k around 6 years ago which I paid back without missing a payment.

What would everyone recommend that I do? Is a mortgage broker viable? How do they charge and would it be worth my while using one?

So many questions to ask, Fortunately/Unfortunately (which ever way you look at it) my parents have been mortgage free for a very long time so they cannot really give me any advice on the matter.

Thanks in advance.

amnblog

tabz89 wrote: »

my parents have been mortgage free for a very long time so they cannot really give me any advice on the matter.

Thanks in advance.

It sounds like you need advice, and the best way to get it is via an independent mortgage broker.

Lack of credit history can cause a problem with applications so yours is best professionally managed.

Avoid mortgage brokers in Estate Agents offices. Ask friends or family for a recommendation.

ACG

It should fit now without the extra deposit so thats good news.
You can not get a Mortgage offer until you have found a property, had an offer accepted and had a valuation and underwriting completed. You can get a Decision in Principle (DIP) but that can leave a mark on your credit report and doing it wrong too many times can cause you problems, especially if you have bad credit or no credit.

I do think you could do this on your own, but I think because you have so many questions and possibly no one close to hold your hand (so to speak) a broker would be worthwhile, if nothing more than to offer guidance and remove some of the stress.

I echo amn, avoid estate agent based brokers. They work for the estate agents...and you, although you pay their wage once, the estate agents pay their wage week after week so its easy to see where their loyalities really lie.

Some brokers do not charge, others will charge around £1k - most will fall somewhere in the middle. Some charge on application, some on offer, some on completion.

JJalalian

Some of the best brokers I know are estate agency based! Most of them are not attached to the agency and are open to the whole of market.


Most brokers have to pay a rent to be in that agencies office and there salaries come from a different company altogether, not from the estate agent.


If you want clear and transparent advice, then don't rule out agency brokers.


I'm based in an estate agents, yet I have other companies in my area sending me there clients who have had offers accepted on there properties.

csgohan4

JJalalian wrote: »

Some of the best brokers I know are estate agency based! Most of them are not attached to the agency and are open to the whole of market.


Most brokers have to pay a rent to be in that agencies office and there salaries come from a different company altogether, not from the estate agent.


If you want clear and transparent advice, then don't rule out agency brokers.


I'm based in an estate agents, yet I have other companies in my area sending me there clients who have had offers accepted on there properties.

You are more likely to get rubbish ones via the EA referral and you have no idea if they are open or limited to a few lenders.

Especially EA' who try and bully you to use their in house broker or your offer won't be accepted.

Whereas if you research your own broker or have a recommendation it is easier as they will have a track record.

Compared to an EA where alot of us are reluctant to use their already over priced services which have minimal feedback.

EmilySmith19921

Hi, I am also a first time buyer and currently at completion after being in a position similar to yourself-I wanted to wait to save more, but the perfect house came up and I had to go for it.


Best thing you could do is ask around for recommendations for a Mortgage Broker. My fee was £250 upon the mortgage being offered, if I hadn't been offered the mortgage then there was no fee. They have answered all my questions after me hounding them for advice, and have been worth every penny!

tabz89

Thanks for all your reply's and advice. I think my best bet would be to get an independent mortgage broker. A friend has recommended someone but did stress he works on commission which I thought was a little strange, is this normal?

ACG

Some brokers get paid via commission, some get paid commission and charge a fee.

Personally I do the latter and I think more and more brokers do charge fees now a days as the work levels have increased over the last few years due to regulatory changes. One thing to probably ask a fee free broker is how many customers they have on the go. I had to have about 10 mortgages on the go at any one time to earn a living before I was charging fees, which in turn meant I was not around as much as I needed to be. After changing to charging fees I was able to limit my work load and spend more time on each client...but everyone is different.