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First time buyer - how much will I need?

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bp5678
bp5678 Posts: 413 Forumite
Third Anniversary 100 Posts Name Dropper
edited 6 November 2018 at 1:18PM in House buying, renting & selling
I have 2 questions:

1) How much money will I need to have saved?
2) When do you think I will realistically have the money?

To give you some background, I have £2600 in my Help To Buy ISA and I'm adding £200 into it per month.

I have £8500 in my current account. I am averaging saving £850 a month.

I also have a Lifetime ISA. When I come to buying my first home, I will move the majority of my money from my current account as well as that in my Help To Buy ISA over into the Lifetime ISA.

My credit score is pretty good.

I would like to take out a 10% mortgage.

I expect the home I move into to be in the region of £300,000.

EDIT: I'm only earning £28k however I live very frugally. Would I be able to get a mortgage based on this salary do you think?

So regarding my 2 questions:
1) How much money will I need to have saved?
2) When do you think I will realistically have enough money to meet question 1?
«134

Comments

  • ReadingTim
    ReadingTim Posts: 4,084 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    To a certain extent it depends on how much you earn - basically you need to save the difference between the amount the bank will lend you and the purchase price of the property, plus stamp duty and other fees.
  • Surrey_EA
    Surrey_EA Posts: 2,047 Forumite
    Tenth Anniversary 1,000 Posts
    I think you probably mean a 90% mortgage, using a 10% deposit.

    A mortgage of 10% of the property value, that is gonna to take you a while!

    Assuming that is correct, you'll need:

    Deposit: £30,000
    Legal Fees: £1000-1500 (approx)

    Your purchase won't attract stamp duty as you're a FTB.

    Presumably you don't have a large amount of furniture to move, so removal expenses aren't something to worry about.

    You may want to put some money aside to buy furniture/household essentials, unless that is already covered.

    A buffer of some sort to cover bills that come with owning a house might be wise: council tax; insurance; utilities, in the main.

    It would seem sensible to have around £35,000. You've currently got £11,100. At the rate you're going it's going to take roughly another 2 years for you to be ready to buy somewhere.
  • jonnygee2
    jonnygee2 Posts: 2,086 Forumite
    1,000 Posts Second Anniversary Name Dropper Combo Breaker
    I would aim to save the cost of your expected deposit + another £10k. So 40k.

    You should create a simple spreadsheet to track your savings and predict when you will have enough. Your finances are likely to change over the next few years (they always do) so the answer to your question will change.
  • ThePants999
    ThePants999 Posts: 1,748 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper
    Surrey_EA wrote: »
    Presumably you don't have a large amount of furniture to move, so removal expenses aren't something to worry about.
    That's an odd assumption. Renting your home instead of owning it doesn't mean you don't have furniture...!

    That said, I still agree with £35,000 even once you factor removals into it...
  • hazyjo
    hazyjo Posts: 15,475 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Personally, I presumed the OP is still with parents. To be saving over a grand a month pretty much means a high salary or not many outgoings.

    OP, I presume you have looked into what you might be able to borrow. Without knowing your salary, it's hard for us to know if you can borrow what you want.
    2024 wins: *must start comping again!*
  • bp5678
    bp5678 Posts: 413 Forumite
    Third Anniversary 100 Posts Name Dropper
    Surrey_EA wrote: »
    I think you probably mean a 90% mortgage, using a 10% deposit.

    A mortgage of 10% of the property value, that is gonna to take you a while!

    Assuming that is correct, you'll need:

    Deposit: £30,000
    Legal Fees: £1000-1500 (approx)

    Your purchase won't attract stamp duty as you're a FTB.

    Presumably you don't have a large amount of furniture to move, so removal expenses aren't something to worry about.

    You may want to put some money aside to buy furniture/household essentials, unless that is already covered.

    A buffer of some sort to cover bills that come with owning a house might be wise: council tax; insurance; utilities, in the main.

    It would seem sensible to have around £35,000. You've currently got £11,100. At the rate you're going it's going to take roughly another 2 years for you to be ready to buy somewhere.
    ReadingTim wrote: »
    To a certain extent it depends on how much you earn - basically you need to save the difference between the amount the bank will lend you and the purchase price of the property, plus stamp duty and other fees.
    hazyjo wrote: »
    Personally, I presumed the OP is still with parents. To be saving over a grand a month pretty much means a high salary or not many outgoings.

    OP, I presume you have looked into what you might be able to borrow. Without knowing your salary, it's hard for us to know if you can borrow what you want.

    I'm only earning £28k however I live very frugally. I.e I cycle to work, pay only £8 for my phone bill, rarely eat out or spend on luxury items. Would I be able to get a mortgage based on this salary do you think?

    Also, I'd love to move to Cardiff and know houses are quite a bit cheaper for what you get. So I maybe able to get the same standard of house in Cardiff for say about £250,000.
  • ReadingTim
    ReadingTim Posts: 4,084 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    bp5678 wrote: »
    I'm only earning £28k however I live very frugally. I.e I cycle to work, pay only £8 for my phone bill, rarely eat out or spend on luxury items. Would I be able to get a mortgage based on this salary do you think?

    Have a look here as to what you might be able to borrow with that sort of salary. You're going to be saving for a very long time I'm afraid, even living very frugally.
  • Earnings of 28k are likely to only achieve a maximum borrowing amount of £140k plus any deposit you have saved
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Sanne
    Sanne Posts: 523 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    bp5678 wrote: »
    I'm only earning £28k however I live very frugally. I.e I cycle to work, pay only £8 for my phone bill, rarely eat out or spend on luxury items. Would I be able to get a mortgage based on this salary do you think?

    Also, I'd love to move to Cardiff and know houses are quite a bit cheaper for what you get. So I maybe able to get the same standard of house in Cardiff for say about £250,000.

    Normally lenders will go to a max of 4.5 times salary so there’d be quite a bit of saving to do to afford a property of that price.
  • Surrey_EA
    Surrey_EA Posts: 2,047 Forumite
    Tenth Anniversary 1,000 Posts
    bp5678 wrote: »
    Would I be able to get a mortgage based on this salary do you think?

    Yes, but almost certainly not for the amount you ideally want to afford the house you'd like to buy, unless you're happy to put off buying for several years.
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