Advice for a first time buyer

James-may

Hi I'm looking for some general advice and maybe a recommendation for a broker , and what I should expect trying to buy.
I'm looking to buy a place between 80-90k
I hope to have 10k saved up by December, but might have 8k saved by August for a 10% deposit.
I have no debts, but have credit cards I rarely use.
But 3 years ago I had a good few payday loans maybe 7 or so, but all paid straight off.
I had a dro ,6 years ago in April, so that will drop off my report may/June time

I'd rather have as little costs upfront as I don't really want to pay for evaluations and fees if I'm gonna be refused.
Is there any companies I should maybe consider?
Is there anything I should be doing (or not doing) now to help my chances or to prepare.
My current landlord is offering to sell to me for 90k, which looking around looks to be around 10k less than market value for my street, but I've seen nicer houses in maybe not as nice a street, for 80k, but obviously by the time I get the deposit together that could be gone.
Is it better to get rid of credit cards all together, or keep them, spend on them and get rid.
My credit score now is around 390 right now,  but once the dro drops off that should go up a bit.
I realise the score isn't really that important,.
Anyway, any thoughts or advice would be great.

K_S

@James-may
- assuming you're only looking to apply once the credit history is clean
- your unused credit cards should not make a significant difference one way or the other.
- 3+ year old payday loans shouldn't stop you from getting a mortgage though might have an impact depending on the details

- you haven't mentioned your income but as long as you're earning basic income in the region of of 18-20k, you should be fine on affordability for the amount you're looking to borrow

- The 10% deposit mortgage market hasn't got back to its pre-covid state yet. There are only a few lenders with many of them applying enhanced criteria at 90% LTV. Hopefully the situation will improve further by summer when you're looking to buy.

James-may

K_S said:

@James-may
- assuming you're only looking to apply once the credit history is clean
- your unused credit cards should not make a significant difference one way or the other.
- 3+ year old payday loans shouldn't stop you from getting a mortgage though might have an impact depending on the details

- you haven't mentioned your income but as long as you're earning basic income in the region of of 18-20k, you should be fine on affordability for the amount you're looking to borrow

- The 10% deposit mortgage market hasn't got back to its pre-covid state yet. There are only a few lenders with many of them applying enhanced criteria at 90% LTV. Hopefully the situation will improve further by summer when you're looking to buy.

Thank you, my basic pay is just under 23k, but I get quarterly bonuses (last year I got 5k extra net), so I should be ok affordability wise.
Yeah I'm waiting til my history is free from the dro before applying.
Hopefully the 10% thing won't be as much of an issue by the time in 6 months.
Thanks.

James-may

Are brokers the way to go?
It seems easier that going from lender to lender .
What costs will I need upfront other than deposit?
I'd rather not pay unless I buy a house, I don't really want to pay for stuff only to get turned down .

K_S

James-may said:

Are brokers the way to go?
It seems easier that going from lender to lender .
What costs will I need upfront other than deposit?
I'd rather not pay unless I buy a house, I don't really want to pay for stuff only to get turned down .

@james-may I would recommend using a broker. If you don't want to spend any money on a broker, there are plenty that don't charge a fee for advice, see here https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

With regard to the mortgage - you may need to pay upfront for a valuation as part of the mortgage process which you will lose if the application is declined. If the product comes with a product-fee charged by the lender, that can be added to the loan and doesn't need to be paid upfront.

James-may

K_S said:

James-may said:

Are brokers the way to go?
It seems easier that going from lender to lender .
What costs will I need upfront other than deposit?
I'd rather not pay unless I buy a house, I don't really want to pay for stuff only to get turned down .

@james-may I would recommend using a broker. If you don't want to spend any money on a broker, there are plenty that don't charge a fee for advice, see here https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

With regard to the mortgage - you may need to pay upfront for a valuation as part of the mortgage process which you will lose if the application is declined. If the product comes with a product-fee charged by the lender, that can be added to the loan and doesn't need to be paid upfront.

Thanks for that, I will look at those once I'm in a position of having a depisit, I presume an evaluation is around £500 give it take a couple hundred £.
Not sure if I should keep ask in this thread as things proceed or create others.
Will be months before I need more info now I think, not til I have a deposit and my dro is off my record.
Aaaand, this covid stuff has died down, and maybe, perhaps, you never know, the government might launch and amazing help to buy scheme that includes non new built properties.....well I can only hope lol.

Thanks for the help.

sammyjammy

Ask any future questions on this thread then you don't have to start your story from the start and/or those replying have the full picture, good luck!

James-may

With the possibility of a 5% deposit mortgage coming up from this new government backed scheme, I could possibly get 5% together by April, do look to buy may/June.
But, I'd guess interest rates will be higher, but would give me a few grand spare for decorating and stuff.
But as my credit rating is borderline (fair/good) I might struggle to get approval.
Be nice if I could buy on 5% earlier, as I'd save a few grand in rent.

James-may

Should I start asking brokers now?, I have seen 2 houses I fancy the look of, obviously I need to view and dig into valuations and stuff, but I will have enough for a 5% deposit in 6 weeks time, but my debt relief order will expire 6 years in may.
Will it be best to just wait that extra month?, Or go for it as soon as I have the deposit.
I'm not sure what conditions will be attached to the new 5% offer coming April.
I'm just desperate to own my own place and stop paying £500 per month rent to someone else.
Also, on top of the deposit, how much will I realistically need to pay out for legal fees and valuations and stuff?
Moving house isn't an issue as I have friends with vans already offered, but I'm hoping an extra £1000 will cover stuff and that most costs will be added to the mortgage.