First Time Buyer - a few questions

liamcal93

I'll start by just giving a bit of info. So, me and my girlfriend are looking at buying our first home in the second half of this year. We're looking at 3 bedroom houses in West Yorkshire, probably in Huddersfield, in the price range of £150,000 to £200,000.

I am 24, she is 21, I have been in full time work since I left Uni in 2014, she is graduating in July and is in the process of getting her contract signed for her new job as a Social Worker starting anytime between July and September (date yet to be confirmed).

In terms of a deposit, by the end of July, I will have a Lifetime ISA with £15.7k in it, and she will have a Help to Buy ISA with £5.8k in it. So, £21.5k total, and £22k+ if we don't buy until October time. We will also have around £13k savings for the associated fees of buying a house and also furnishing it but we hopefully won't spend it all!

Questions:
1. Is it possible to get a mortgage or at least a DIP without my girlfriend having started her job yet and therefore not having received a months salary?
2. How easy is it to use a combination of a Lifetime ISA and HTB ISA as 2 people buying a house together?

Any advice would be greatly appreciated!

kingstreet

Yes. There are lenders who will work with a job offer and confirmed start date.

Can't see any issues with the ISAs, but bonuses etc are for your solicitor to resolve.

liamcal93

Good stuff, would we have access to better mortgages if we wait for her to receive her first month's salary for example?

Do you mean the 25% bonus in relation to the HTB? She will have around £4.7k in the HTB, but then the government bonus is around £1.1k. Am I right in saying that the bonus can't be used towards the deposit? What is it used towards then?

kingstreet

It varies from lender to lender.

Best rates will be obtained by having a six to twelve month employment history.

The bonus isn't going to be there for exchange of contracts, but will go into the pool of funds for completion for any further contribution towards the purchase, or solicitor fees/costs (regardless of what the rules say!!)

ceb1995

You can get your solicitor to negotiate a lower deposit at exchange so the bonus is then used at completion, we had a 5% deposit ready and our solicitor managed to negotiate for us to be able to use our help to buy isa bonuses at completion and that 2k was a massive help.
If you ve got a decent solicitor I wouldn't worry about the bonuses , just be sure to get the correct closing statement from your bank's.
It would be easier if your girlfriend had started the job and had some history , my husband had been in his job about six months and they just asked for 3 months payslips.

GoingOn30

You don't need a DIP until you find a house you want to make an offer on, so no need to worry about this for now.
Looks like you could get up to a 15% deposit which will likely get you a better mortgage rate than a 10% deposit.
Sounds like you're both doing a great job of saving!

liamcal93

Okay understood, so the focus for now should be getting her contract for the new job signed so that we can start looking?

Might be a struggle to get 15%, depending on the value of the house. Even at 170k that would mean finding 3k extra deposit. Would you say its worth it in the long run to sacrifice some of our other savings for furnishing the house and put it towards the deposit and get a better rate?

liamcal93

We'll have the 10% deposit anyway so the HTB bonus shouldnt be much of a factor really.

In terms of the job, she's only finishing Uni in the next few weeks and then although she's accepted the job there is a lot of red tape in terms of getting a start date and becoming a newly qualified social worker. I'm hoping the fact we both had a good credit history and a good deposit, savings and good habits with money will mean a lender will look favourably on us in terms of her job being very new. But it will depend upon how long it takes us to find a house I guess!

GoingOn30

Remember the process of purchasing a property can take 4 or 5 months so you might have longer to save and reach that 15% mark. Getting a better mortgage rate could save you thousands in the long run so yes it's worth putting as much as you can towards the deposit.

Minimise your outgoings over the next few months, make sure you are on the electoral roll etc,

Sounds like you could be in a position to start looking at properties in 2 or 3 months.

Thrugelmir

The less you borrow the less interest you'll repay the lender over the term of the mortgage. Likewise as and when interest rates rise. The lower the impact on your monthly outgoings. A mortgage is akin to having a ball and chain attached to your leg. While it's great to get onto the first step of the property ladder. Means for the next 25 years or so you'll need to remain in employment bringing home a monthly pay cheque to repay the debt. .