First time buyer - how much will I need?

ReadingTim

CornwallFTB wrote: »

Why shouldn't the expectation be to move into a "decent home" first time round? Just because someone is a FTB it doesn't automatically mean they have to start at the bottom of the housing ladder.

For exactly the same reason that not everyone should "expect" to drive a Porsche or Ferrari as their first car.

You can have anything in the world you like, just as long as you can afford it.

Exodi

MaxiRobriguez wrote: »

A £300k house isn't a FTB house anyway unless you live in central London.

Why isn't it? Really dislike these sweeping assumptions that are often seen on this forum. Based in the SW here, FTB and just bought a house for exactly £300k.

Based on the figures above (and using Lloyds calculator), I'd say you're certainly not the 'average' first time buyer.

Assuming a 10% deposit, you'd need to be earning about £57,000 a year to get a mortgage of this size - double the UK average. Or, assuming an average UK salary (£28,000ish), you'd get a mortgage of £133,000 and need to put down a deposit of £167,000. Neither of which sounds particularly normal to me.

The only real exception is if buying with a partner, but then it's not particularly fair to say a normal FTB will need to be take out a joint mortgage (even if it is becoming the reality).

I don't know if your post was meant as a subtle brag, but I'd say nothing about it is average. I think it's fair that people make the sweeping assumptions they do.

Amoux

Average deposit for a first time buyer is about 20%, but even this figure is highly dependant on your location. https://www.which.co.uk/news/2018/02/how-much-deposit-are-first-time-buyers-in-your-area-paying/ shows that first average deposits range anywhere from 28% or £174,974 in Camden to 12% or £13,701 in Barrow-in-Furness.

How much you will need will be based entirely on your individual circumstances such as area, income, how much the lender will let you borrow, whether you are buying jointly or on your own, and of course what house you intend to buy.

indierocker85

Although you live "frugally" which is great by the way. A bank/lender will view things very differently. They will view things in what *they* deem to be the "real world" i.e they may not fully believe you spend as little as you do. And they will do an income and outgoings breakdown and make assumptions for some of the figures. For example, lenders often don't factor all of a womans salary into the lending calculation, as they assume she may have children in her lifetime and thus be on maternity etc.......

You are doing the right thing by saving in a Help to Buy ISA.

Are you buying on your own, or with a partner? If the latter, do they have a HTB Isa too?

I agree with all what others have said, factor in removal costs and solicitors fees, as you end up paying the solicitor fees at the same time as your deposit. So you may think on paper you have a £30k 10% deposit, but with fees you end up maybe transferring £32k........However, our solicitor claimed our help to buy isa bonus and deducted that from the amount we had to pay, which is a great thing, So that may help you with the difference.

My best advice, keep living frugally as you are, but comfortably, and keep paying into your help to buy ISA and any above inflation savings accounts that you can....Work out where you want to live, and the rough average price. When you know that, you know how much you need to borrow. Work out the council tax costs for the area you would live within, average insurance costs, do a dummy comparison even......and a I/O breakdown......As others have said you don't have stamp duty to worry about...

Once you have worked all of this out, go and speak to a whole of market mortgage broker......We paid a £99 fee for ours but she was very good, and got us the best deal for what we wanted and needed to borrow.

Good luck and stay positive

pinknsparkly

I agree with previous posters that you salary is simply not big enough to persuade a mortgage provider to lend you £270,000 (90% of £300,000).

I think you realistically have the following options:
- extend your search area and look for cheaper properties
- look into shared ownership properties
- take in a lodger, and get a mortgage such as this one (where they will take your lodger income into account): https://www.bathbuildingsociety.co.uk/mortgages/mortgage-products-for-individuals/standard-residential-mortgages/rent-a-room-mortgage
- boost your income (there comes a point where you can't squeeze any more money out of your budget, and the next step is to increase your income!).

Out of interest, why are you putting the money into your HTB rather than your Lifetime ISA? The annual limit for HTB is £2400 compared to £4000 for the LISA and you can only transfer your HTB into a LISA in the first year it's open (I believe). If you want to keep your HTB ISA open as it pays better interest rate than a LISA then keep in mind that you can pay into BOTH each year (LISAs are a different type of ISA to cash ISA and you can have one of each every year - though your HTB ISA counts as your cash ISA for the year so you can't open another cash ISA unless you are with a provider who offers a "split" ISA).

Edited to add: obviously, you can only use one bonus to buy your house: either the HTB or the LISA, not both!

bp5678

Is there any way to convince a lender that I'm earning more than I actually am while remaining legal? For example if I have multiple bank accounts, could I move money into my 'main' bank account with the majority of my money in and say that this money getting paid in is coming from a secondary income? Obviously I don't want to break the law here however I don't mind being a bit unethical

marliepanda

bp5678 wrote: »

Is there any way to convince a lender that I'm earning more than I actually am while remaining legal? For example if I have multiple bank accounts, could I move money into my 'main' bank account with the majority of my money in and say that this money getting paid in is coming from a secondary income? Obviously I don't want to break the law here however I don't mind being a bit unethical

Are you REALLY that daft?

Do you think banks are REALLY that daft that they can't see you moving your money around...

Like really? Is this a serious question? Am I on candid camera? Do candid cameras still exist?

ReadingTim

bp5678 wrote: »

Is there any way to convince a lender that I'm earning more than I actually am while remaining legal? For example if I have multiple bank accounts, could I move money into my 'main' bank account with the majority of my money in and say that this money getting paid in is coming from a secondary income? Obviously I don't want to break the law here however I don't mind being a bit unethical

Think it through Sherlock - even if you convinced them to lend you more, that just means you have more to repay every month. If you can't afford the repayments, there's no point in borrowing the amount!

Thrugelmir

bp5678 wrote: »

Obviously I don't want to break the law here however I don't mind being a bit unethical

With financial relationships trust is paramount. No trust no relationship. Likewise you'll be black marked and find yourself on here.

https://www.nhunter.co.uk/

hazyjo

bp5678 wrote: »

Is there any way to convince a lender that I'm earning more than I actually am while remaining legal? For example if I have multiple bank accounts, could I move money into my 'main' bank account with the majority of my money in and say that this money getting paid in is coming from a secondary income? Obviously I don't want to break the law here however I don't mind being a bit unethical

The only way to look like you have a second income coming in from an additional job is to, erm, get an additional job!


Starting to feel like a bit of a wind up thread now :rotfl: