Help Needed from all you experts

DilbertJones

I am trying to get a foot on the housing ladder, but have no savings, my future mother-in-law who was saving for our wedding say's she will help us out by giving us £1000 towards our deposit, excellet...

Whats the best thing I can do to maximise that £1000 bearing in mind I may need to withdraw it to pay for my first house, that could be in a few months or even years!!!

Obviously i am going to start adding to that £1000 each month from now on.

Any help from your clever people out there is greatly appreciated.

grumbler

robodan wrote:

... have no savings... i am going to start adding to that £1000 each month from now on.

I assume that both you and your wife are taxpayers. In this case, I think, cash ISAs are your best choice. You can save up to £3000 p.a. each free of tax. No-hassle ISAs pay now 5%+.
'ISAs - save tax' and 'The Best Mini-Cash ISA' articles
'ISAs,...' subboard.

If your wife is not a taxpayer, you do not need ISAs and it is better to have all savings on her name. Rerular saving accounts pay now 7-8%.

'Regularly Beat the Best Savings Accounts ' article.

DilbertJones

She is a tax payer, but she earns around £4500 PA, & is pregnant so she will stop working at some point probably around Aug-Sep, so will this affect her Tax? She'll stop paying tax when she finishes so her earnings for the tax year may fall short of the required amount.

DilbertJones

Oh and of course I am also a tax payer, forgot to mention that

Joe_Bloggs

1) Spend less, budget wisely, stick with this site for tips.
2) Avoid debt and car ownership, the two go together.
3) Consider ING for your savings. The monthly interest is an additional 'bonus' rather than waiting for a year to see the benefit of saving.
4) An ISA is also worth considering as you can avoid the 20% tax i paid on interest gained on saving savings this way.
5) Establish an impeccable credit rating.

With savings you have more options. A good option without them is to avoid the housing market and be nice to your parents/prospective inlaws. You may need 5% deposit and can probably get 3.5 x salary. Does this bring any dwellings into your range ? If not then let the housing market come towards you.
J_B.

Just got the latest info...
Consider applying to local council and local and surounding housing associations. Get on their lists. You may still need a 5% deposit to qualify for shared ownership schemes.

DilbertJones

1. Already spending less & saving
2. I am not taking on Any more devt, next debt will be my mortgage, Also i am a company car driver so that helps a lot
3 & 4 ING or ISA which is best for me at the moment? ING, look good but thats because I know nothing about isa's
4. how do I establish an impeccable credit rating?

3.5 X my salary gets me 61250 thats wont by a box round here!! a Independent has said I can get 82250, & am hoping to get on the homebuy scheme where they pay 25% of the purchase Price

grumbler

robodan wrote:

She is a tax payer, but she earns around £4500 PA, & is pregnant so she will stop working at some point probably around Aug-Sep, so will this affect her Tax? She'll stop paying tax when she finishes so her earnings for the tax year may fall short of the required amount.

Personal allowance is £4,895 for 2005. If her income (including interest) is less than this allowance she does not pay any tax. If she paid some tax she can claim it back. Regular saving account (on her name) is your best choice for saving up to £250 p.m. Put the rest in A&L online saver (5.35%) on her name. It is better than ING.
Generally you do not need a credit history to get mortgage. However, you can apply for a credit card. If you get one, be very carefull with payments, never miss them.

DilbertJones

grumbler wrote:

Generally you do not need a credit history to get mortgage. However, you can apply for a credit card. If you get one, be very carefull with payments, never miss them.

Sorry Grumbler, i do not understand this statement, do you mean if i can get a credit card i can get a mortgage?

Joe_Bloggs

Your existing debts, if any may, well be the key to your savings. There seems no limit to what you can be charged in interest on debt but interest on savings tends to have a 5-6% limit before tax. It is no secret that shifting debt at high interest to low interest will save money. Research your options if this applies. Consider Martin's credit card shuffle.
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1102335753,51771,

I don't think you can afford to buy at present in a falling market and with a young one on the way. Good luck with the new family member. I can understand the haste to get on the property ladder.

If you have had credit/debt problems it would be worthwhile checking out your credit reports from Experian and Equifax to see what future lenders will find out. If you borrow money and pay it back you are perfect. I did not borrow because I had savings and got turned down for a mortgage.
J_B.

DilbertJones

I had 2 deafults in my history, 1 credit card for £2000-ish is marked as Satisfied, another mobile phone bill for £170 - It is currently in default & i defaulted on 10-2-02 the credit agreement is reprted as ended, do u think it is worth paying this off?

everything else is always paid off on time

I understand that now is not the best time to buy, but it may take me a year or even more to make that purchase, I am just scared the House Prices will go above & beyond what I can save to keep up with them!!

Joe_Bloggs

I would say pay your debts if you can and especially if they show up on your credit reports. I have only been chased for other peoples debt so my advice is to try the debt-free wanabee board for better advice than this:-
Claim amnesia due to mobile phone emissions, you moved house,sim card swapping chaos, theft, general confusion etc. It helps to be squeaky clean.
J_B.