Am I in a good position FTB?

Sazzy1253

COYI123 said:

Sazzy1253 said:

I’m a FTB, buying with a partner. We’re 24 and both full time employment with the nhs (combined income of 80,000). We had a 60% deposit for the property we wanted to buy (£150,000 property). 

It took us so much longer than we thought to get a mortgage. We don’t have any debt etc but we’ve been paying our credit cards off before the statement is released. Because we don’t have anything on finance we just didn’t have a long history of credit. 

Never thought that could have an impact but it did! Started leaving the credit card and using it slightly more. 6 months later all sorted! 

Yeah that’s what we found out obvs being only 20 we weren’t going to have unreal credit history , but we paid everything off all the time in full , you sound like you must be from up north to get a property for 150 which is cheap , honestly up north for what you get for 300 , down here in Essex it’s about 750 no joke 

We’re from wales, house prices are much cheaper. We managed to get a detached 4 bedroom house with 2 acres for that. We’ve just moved from London abs the prices are so mad in comparison

good luck with buying  

COYI123

ele_91 said:

The other threads you’ve started sort of suggest you’re not in a good position and they highlight a real problem with FTBs… You are struggling to get a mortgage AIP and because your deposit is low, lenders will view you as more of a risk. You won’t be able to weather any downvaluation and one of you is self employed and has been on furlough. That would set alarm bells ringing for me! It won’t be the same for everyone but unfortunately lots don’t view FTB as a good prospect anymore and there are plenty of other chain free buyers.

I accepted an offer from a FTB who had a 60% deposit but they could not get a mortgage offer despite having an AIP as one of them was self employed and had claimed grants last year, they had refused to pay for any searches or survey until they had their offer and after three months waiting for a mortgage offer were no further down the line so I had to put the house back on. 

I’m sorry but that’s rubbish, I can’t see how me and my girlfriend are in a “bad” place. She can’t help that COVID did what it did to her industry , but she has proven that since returning in April with bank statements , she is back to earning an average of 2.5-3k a month , continuously. We’ve spoke to banks and they have said to us they appreciate that and understand that it’s not my partners fault she wasn’t earning what she used to because she literally couldn’t work . She’s 20 and earning that . I’m 20 and earning 50+ and soon to be 60+ with a skill . We have 30k which is no where near a small deposit for two 20 years olds that’s have saved that all themselves . Bear in mind we are leaving ourselves with around 15k after we lay our deposit down for home improvements, fees , etc .  Banks were not declining AIP’s due to deposit , they were declining them due to our previous broker not actually putting any effort in to them , once our new broker did a hard check AIP with Barclays , they read through all of our situation and happily said they would lend , I know it’s not 100% but our broker is experienced and stated your in a strong position , at the end of the day if you consider us to be in a “poor” situation , then god knows what banks think about people 10 years older than us coming in to them asking for a mortgage with a 5% deposit ! 

MaryNB

COYI123 said:

ele_91 said:

The other threads you’ve started sort of suggest you’re not in a good position and they highlight a real problem with FTBs… You are struggling to get a mortgage AIP and because your deposit is low, lenders will view you as more of a risk. You won’t be able to weather any downvaluation and one of you is self employed and has been on furlough. That would set alarm bells ringing for me! It won’t be the same for everyone but unfortunately lots don’t view FTB as a good prospect anymore and there are plenty of other chain free buyers.

I accepted an offer from a FTB who had a 60% deposit but they could not get a mortgage offer despite having an AIP as one of them was self employed and had claimed grants last year, they had refused to pay for any searches or survey until they had their offer and after three months waiting for a mortgage offer were no further down the line so I had to put the house back on. 

I’m sorry but that’s rubbish, I can’t see how me and my girlfriend are in a “bad” place. She can’t help that COVID did what it did to her industry , but she has proven that since returning in April with bank statements , she is back to earning an average of 2.5-3k a month , continuously. We’ve spoke to banks and they have said to us they appreciate that and understand that it’s not my partners fault she wasn’t earning what she used to because she literally couldn’t work . She’s 20 and earning that . I’m 20 and earning 50+ and soon to be 60+ with a skill . We have 30k which is no where near a small deposit for two 20 years olds that’s have saved that all themselves . Bear in mind we are leaving ourselves with around 15k after we lay our deposit down for home improvements, fees , etc .  Banks were not declining AIP’s due to deposit , they were declining them due to our previous broker not actually putting any effort in to them , once our new broker did a hard check AIP with Barclays , they read through all of our situation and happily said they would lend , I know it’s not 100% but our broker is experienced and stated your in a strong position , at the end of the day if you consider us to be in a “poor” situation , then god knows what banks think about people 10 years older than us coming in to them asking for a mortgage with a 5% deposit ! 

I don't think ele_91 meant it as an insult. Many people who has any kind of financial difficultly during covid won't be in a great position from a bank's perspective. A lot of people who got grants or were furloughed (even for a short time) were impacted when trying to buy property or remortgage. I know you see yourselves as in a good financial position but it's different from the perspective of someone who has to decide if they will give you a 6 figure loan, or someone who agrees to go through a 3 month process of selling you their property.

While £30k for 20 year olds is impressive, a 10% deposit is still not brilliant in the eyes of a lender. When I applied for my mortgage in August most lenders wouldn't grant mortgages for deposits less than 15%. Someone with a 10% deposit may subject to more scrutiny than someone with a 15% deposit. My lender currently has a warning on their mortgages page for people with less than 15% saying there are additional criteria. It's not personal, it's industry wide. A seller may be worried that lenders pull 90LTV mortgages again. Due to the chaos in the market as a result of the stamp duty boom, downvaluations are quite common and having a 10% deposit makes you at more risk of having to pull out or requesting a drop in price than someone with a 20% deposit. You may have £15k extra but banks don't look at your savings account, they only consider what you are putting forward as a deposit. You may be able to use this in the case of downvaluation but a seller won't know that unless you explicitly tell them - the 10% deposit is the headline. 

You may be better off than someone with a 5% mortgage but your partner won't be in as good a position as someone in full time employment (with a company rather than self employed) who worked continuously during covid and has a 15% deposit. Also, someone who is 10 years older will presumably have a much longer credit history which may give them an advantage in that sense. 

When someone is selling their property they take all the above into account. Sellers can be very risk averse due to the costs involved and any issues with a buyer could put their onward purchase at risk. My seller wouldn't even mark the house SSTC until I had a mortgage offer in place - I was an FTB with a 35% deposit, 7 years of excellent credit history, who had no financial or employment issues during Covid. 

[Deleted User]

you have already decided you are in a good position and are arguing with anyone who has a different viewpoint so not sure what answers you want here.    If an estate agent is getting excited about having a ftb on their books then fantastic, hopefully that means they are going to screw over their client and sell you one of the properties for under value.  

In my experience estate agents have far less influence over what offer the vendor takes than they like to think they do.   

You've got as far as you can on the mortgage, as far as anyone else with a similar deposit, and each property has a different vendor so some might take an offer and some wont. Generally people wont take an offer just for being a ftb, they will take an offer as they know the property isnt worth what they are asking for

RoisinDubh_2

cdp2879 said:

We're FTB.  Agreed £15k less the asking price (of £465k - which had just been reduced from £495k).  Seller went with us because we were FTB, with all the bits lined up and could move as quickly as they could.  A number of estate agents got noticeably excited when we said we were FTBs.

I think a lot depends on where you are.  Not everywhere is a seller's market.  Properties around us are reducing all the time or switching to rentals when they can't sell.

Are you in London or the South East? I feel like most of the responses in this thread are completely alien to me. Here in London I know nobody who paid asking price. My colleague has had her beautiful flat on the market for weeks now and very little interest. I've seen flats reduced from 300K to 275K in a day. 

[Deleted User]

I was looking at flats for 2 years and put in multiple offers bidding against others and it never benefited me being a FTB. I had a reasonable sized deposit and was offering close to asking. 
I had to stop chasing a 'good deal' and ended up perhaps overpaying by a grand or two, so that I didn't have anyone else trying to outbid me. 
Everything they said about FTB is true because it's a very strange experience to go through when you've not done it before. Lots of months of silence then scary documents and surveys that freak people out. Noone really tells you what is happening & for some reason it all is very stressful, so I can see why people avoid FTB. 
It probably helped that I overpaid a little and met the seller, so she knew what kind of FTB I was.