First time buyer, is now the right time?🤷🏼‍♂️

RichB83

Hi all, we have nearly reached the goal for our deposit. Realistically we will probably be ready by April. But as first time buyers, is now a good time? I can see house prices have dropped slightly so in that respect it is good for us. But the amount of mortgages available have reduced as well. So I have a few questions if anyone can help? Do we go to a broker or search ourselves? A family member has recommended one and swears by him. Do we wait a little bit longer for more competitive deals to appear? We will have around 12k deposit, this will equate to around 5-7%. And before you say it, due to our age we cant really wait much longer to get a bigger deposit. Otherwise it will be coming out of my pension lol. And finally, what fees are we expected to be looking at on top of the deposit? Just a ball park if possible. The deposit is currently sat in 2 Lisa's. Hope someone can offer a bit of help, many thanks.
Rich

K_S

For standard mainstream mortgages, you will need a minimum 10% deposit. Personally I don't see 95% LTV mortgages starting to come back this year (I hope I'm wrong!).

If you have a broker recommended by family/friends, you should definitely try them out when it comes to the point where you are ready to buy. 

RichB83

K_S said:

For standard mainstream mortgages, you will need a minimum 10% deposit. Personally I don't see 95% LTV mortgages starting to come back this year (I hope I'm wrong!).

If you have a broker recommended by family/friends, you should definitely try them out when it comes to the point where you are ready to buy. 

 Thanks, I was afraid you might say that regarding the 95% mortgages. To get to the 10% deposit it would probably take another year to save a total of 20k. Its already been a hard slog and being pretty prudent.

K_S

Sorry to be the bearer of bad news.

If you have family willing to effectively stand as guarantor or provide a lump-sum, there are a few products designed to work with a 5% deposit. But other than that, 10% deposit is the floor at the moment.

grumiofoundation

RichB83 said:

Hi all, we have nearly reached the goal for our deposit. Realistically we will probably be ready by April. But as first time buyers, is now a good time? I can see house prices have dropped slightly so in that respect it is good for us. But the amount of mortgages available have reduced as well. So I have a few questions if anyone can help? Do we go to a broker or search ourselves? A family member has recommended one and swears by him. Do we wait a little bit longer for more competitive deals to appear? We will have around 12k deposit, this will equate to around 5-7%. And before you say it, due to our age we cant really wait much longer to get a bigger deposit. Otherwise it will be coming out of my pension lol. And finally, what fees are we expected to be looking at on top of the deposit? Just a ball park if possible. The deposit is currently sat in 2 Lisa's. Hope someone can offer a bit of help, many thanks.
Rich

Whether prices will drop is unknown - could well be a drop when (if) stamp duty holiday ends but will also be very dependant on your local area. If it is a home you will live in for many years most people would suggest the best time to buy is whenever you can afford to buy. 

If you wait until post April as FTB (if you are in England) you aren’t really missing out on the stamp duty holiday. 

They also gives you the opportunity to contribute another 8k to LISAs if you are able and get another 2k bonus (bonus takes 5-9 weeks to appear depending on exactly when contribute). 

Some fees/cost can vary quite a lot. 

Mortgage fees - depending on deal could be 0 to ~£2000. If use broker pay end up paying fee as well (but this could get you a better deal so not inherently a bad thing).
You may also pay for valuation (again depend on lender). 
Survey - £500+

Stamp duty (assuming England/NÍ, different in Scotland and wales) - £0 if FTB and property less than £300k.
Solicitors fee - vary with area/purchase price but maybe £500+ for ‘basic’ (leasehold for example would cost more). 

https://www.moneysavingexpert.com/mortgages/mortgage-fees-stamp-duty/

Definitely sounds like a good idea to at least speak to a broker to get a better idea of your options. 

gabby71

I’m in the same boat - FTB single parent wrong side of 40 😂 took 3 years of hard saving and just as I got to 10% deposit, Covid hit us - no way will I save another 7k to take me to 15% any time soon and as I have a couple of old ‘blips’ in credit history, the few lenders offering 10% deals at the moment do not fit.
I’m continuing to save with fingers crossed more accessible 10% deposit products become available

pearsforlife

Whatabout help to buy? It was the easiest way for us in 2018, 5% deposit too, I believe H2B mortgages are still in full swing. Only limitation is that you can only purchase a new build.. some horrendous ones out there, but you can get lucky, ours is exactly what we wanted with very minimal defects.