What first?

lhead123

Hi

So as of today, we are debt free, and now want to start saving up for a mortgage.

It will take us about 3 years to save up a 10% deposit, but my husband keeps going on about 100% mortgages - do these even exist any more?

Other than saving a deposit, what's the first things we need to do to buy our own home - is it worth talking to a mortgage adviser at the bank etc? I literally have no clue what it involves, and have no idea what needs to be done other than saving lots of money!

Thanks

ACG

There are 100% mortgages but only if you have well off parents/siblings who are prepared to offer some sort of guarantee.

If you are 3 years off from having a deposit in place, I would just crack on with saving. A lot has changed in the last 3 years and with Brexit is very likely to change in the next 3. Any advice now other than save and keep your credit report clean will likely be out of date when the time comes.

When you are maybe 6 months away from having your deposit, it is probably worth thinking about seeing a broker or the bank at that point. Although if you do have well off family who are prepared to step in as a guarantor then it may be worth speaking to a broker sooner.

csgohan4

100% mortgages also don't expect good interest rates, save up is probably better so you know the state of the market

lhead123

Hi, Thanks for the replies.

A 3 bed house (we have 2 kids - a boy and a girl) is around £250K+ where we are at the moment, so it will be interesting to see what happens in the future.

No, we don't have any wealthy family, so that might throw that plan out of the window.

Is the maximum you can borrow still 4.5-5 x your joint wages? If so we might have to save more than 10% as we're on a combined £39000 which would only get us £175500 - £195000 plus deposit which is no where near what we'd need at today's prices.

It sucks as a monthly mortgage payment would likely cost a lot less than we'll have to pay to rent a 3 bed house when the kids get too old to share

I'll be keeping an eye on house prices and how brexit might impact everything!

Thanks

L

Thrugelmir

lhead123 wrote: »

So as of today, we are debt free, and now want to start saving up for a mortgage.

Congratulations. :beer:

While saving for a deposit may seem like a insurmountable challenge. There's an old Chinese proverb which helps me focus in such times. A man who who wishes to move a mountain starts by moving the smallest stone first.

Have you owned a property previously?

Do you both qualify for a LISA?

DD265

We've been offered a 95% mortgage and the rates would've been better on a 90% mortgage but it was less than £100 a month difference in repayments. As we're relocating, we'll both save a lot of money on commuting costs so we're hoping to be able to overpay the mortgage and maybe things will balance out.

Reading these boards is really helpful, and I got a book 'How to buy your first home' by Phil Spencer. Unfortunately we progressed quicker than I could read the book so I've had to keep jumping ahead.

I'd speak to a broker, rather than a mortgage advisor at your bank.

ACG

Could you not spend 12 months renting somewhere cheaper to save up faster?
Find a property that needs working doing it? Not ideal with 2 small kids but think of the bigger picture.
Put your deposit in a HTB ISA (assuming you are first time buyers).