First time buyer - when is the right time to go to a mortgage advisor?

[Deleted User]

Hello all

I am a first time buyer and am saving for a house deposit. I currently have £4k in savings and going forward will be able to save between £1.5-£2k/month. I am trying to get to £20k (~10% of what I would like to be spending on a first house). I will be receiving ~£8k in inheritance by the end of 2020 therefore I expect that I will have reached my savings target early in 2021. When would be the right time to approach a mortgage broker for advice - would now be a good time or should I hold off until I'm much closer to my target? Similarly, is it advisable to wait until I have the full deposit before starting to view properties? 

I am in a fortunate position in that my salary is in the mid 50-60k range and I have access to a lot of overtime hours at present, seem to do well on lender's affordability checks, have a good credit score and no debt. I'm hoping that organisations still offering 90% LTV mortgages in the months to come might view me favourably...but realistically who knows whether there'll be any of these mortgages left early next year or whether I'll have to keep saving for a few more months to get to a 15%+ deposit. I'm desperate to move as our current living circumstances are less than ideal - two of us plus a cat in a pokey one bed flat, both working from home and struggling to physically separate work from personal time, as we're both working on our small kitchen table til late in the evening. Plus we are finding inner city living very claustrophobic - which is obviously heightened at present given the circumstances.

Any advice that can be offered around when best to reach out to an advisor and when best to start my search would be gratefully appreciated.

bradders1983

Absolutely pointless approaching one now. Rates available now wont be available in January.. In addition, I would try and save at least 15% of a deposit together, it is very difficult to get a 10% mortgage at the moment and who knows if this will change come the New Year, it may get better or it could conceivably get worse.

[Deleted User]

Thanks bradders1983. Obviously I'm a complete novice at this so your insight is really helpful. Many of the blogs / mortgage advice services say the best thing to do is speak to a mortgage advisor early...I assume this advice is pre-COVID and doesn't really apply at the moment given lenders are a bit nervous?

MaryNB

If you can save at a rate of £1.5-£2k a month you should definitely hold out until you have a 15% deposit. You'll be very limited otherwise. Banks are very strict with 10% mortgages at the moment. Lenders can very rapidly withdraw low deposit mortgages so best hold out until you have 15%. 

bradders1983

debtfreefrom2020 said:

Thanks bradders1983. Obviously I'm a complete novice at this so your insight is really helpful. Many of the blogs / mortgage advice services say the best thing to do is speak to a mortgage advisor early...I assume this advice is pre-COVID and doesn't really apply at the moment given lenders are a bit nervous?

Well you dont have a deposit together, rates change constantly, and your credit file will be different in 4 months than now, personally I dont see any benefit at all in wasting the time of a MA now.  It's akin to going to an Aston Martin showroom for a test drive when you can't actually afford to buy one

[Deleted User]

Thanks MaryNB for your sound advice. I think I'm coming round to that as what I'll end up having to do, but just so desperate to get out of where I live at the moment that I'm hoping there might be some 10% ones still lurking. Adding that 5% boost onto the deposit would only really add ~3 months on to my timelines but really resenting my current living situation. Will have to be patient!!

bradders1983

The 10% deposit ones that are available are usually a) an eye watering interest rate, b) a convoluted mortgage where a family member gives £xx,000 to the bank as collateral, and you then pay repayments on a 100% mortgage, and the family member then gets their collateral back after 5 years with interest at a ridiculously low interest rate, c) not available for flats, or d) a combination of the three..

15% gives you far more options.

[Deleted User]

Bradders1983, thanks again. Hearing you loud and clear. I will park it for a good few months until I'm much closer to the finish line and will keep everything crossed that lenders might improve their offering in the mean time.

Ohfeelya

FWIW, I contacted a mortgage broker when I started viewing properties but before I made any offers. This was pre-Covid though so who knows!
> have a good credit score
Just checking, but you do mean you have good "credit history", as the banks don't use CRAs scores. I would check all three agencies if you haven't. I personally use the free apps -- credit karma (Equifax), clear score (transunion) and experian.
I just saw a post from someone who got denied a mortgage because there was a surprise CCJ from an old water company from her Uni days!
Good luck!