How will I afford a property (20-30k deposit, full time job)

sim2335

I got a Mortagte in principle for 114k for a property

I got 10k deposit and my mum can gift  me 10k, I can also save extra 10k, in 10 months to have 30k deposit, ideally I don’t want any from mum.

However prices for houses are about 160k

I wouldn’t mind a flat however there all, Leasehold so very hard to sell in 5-10 years.

Credit scores, excellent experien an

999

Clear score 804 stable

Credit karma 608 Good

No debt other then student loan 9500

Pay day loans over 2 years all paid in time

Salary 23500, bonus 2000 a year

5 miss payments last six years 2 in row 2020

3, 2019, 1 alone and 2 separate

What should I say when they ask why, reason is I was manipulated  by friend so could not pay them and it was took out to help brother, in my name.

And that time I was unaware miss payments would effect that much.

How about buy you let for now, at least I will get on the ladder and when I sell could make more

What about a broker, for higher lending will that cost too much, I don’t have thousands to spend on them.

Including bills and mortgate I could afford to pay about 800 a month, if I don’t save any money

MaryNB

sim2335 said:

I got a Mortagte in principle for 114k for a property

I got 10k deposit and my mum can gift  me 10k, I can also save extra 10k, in 10 months to have 30k deposit, ideally I don’t want any from mum.

However prices for houses are about 160k

I wouldn’t mind a flat however there all, Leasehold so very hard to sell in 5-10 years.

Credit scores, excellent experien an

999

Clear score 804 stable

Credit karma 608 Good

No debt other then student loan 9500

Pay day loans over 2 years all paid in time

Salary 23500, bonus 2000 a year

5 miss payments last six years 2 in row 2020

3, 2019, 1 alone and 2 separate

What should I say when they ask why, reason is I was manipulated  by friend so could not pay them and it was took out to help brother, in my name.

And that time I was unaware miss payments would effect that much.

How about buy you let for now, at least I will get on the ladder and when I sell could make more

What about a broker, for higher lending will that cost too much, I don’t have thousands to spend on them.

Including bills and mortgate I could afford to pay about 800 a month, if I don’t save any money

Ignore the scores, lenders don't see them. They look at your credit history and do their own internal scoring.

How long since your last payday loan? Don't take out any more! They can look very bad to some lenders. 

I presume you mean Buy to Let? Most lenders require you to already own your own property and have a 25% deposit. Have you looked into all the responsibilities of being a landlord? Can you afford to keep paying the mortgage if they stop paying rent?

A broker won't cost you thousands, maybe a few hundred. A good broker will be worth the money, they could save you a lot more then the fee over the life of your mortgage.
Some don't charge a fee and get paid by the lender instead.

Leaseholds aren't that hard to sell as long as the lease is long enough, the ground rent is low enough and there are no issues with cladding. You just have to do your homework beforehand and understand all the potential pitfalls.

sim2335

Last paid off pay day loan October 2020.
wont take out any more loans, thought they were like normal loans just high intrest .

Yes buy to let yes I can afford it, I would just pay it like I pay normal mortgate.
If it’s a flat it’s only about 100k so I could afford 25%

where can I go to make sure I don’t make a mistake for leasehold.

sim2335

Also one more promblem, some banks I had debt with over 10 years ago so it’s wiped of my file but still on theirs, there’s it defulted  etc 2-3 banks.

socratez

Where are you looking to buy? Can you move to a cheaper area?

Slithery

sim2335 said:

Yes buy to let yes I can afford it, I would just pay it like I pay normal mortgate.
If it’s a flat it’s only about 100k so I could afford 25%

But can you afford to pay the mortgage for years with no rental income if the tenant decides that they're not going to pay?

What about losing your FTB privileges? The income tax on the rent? The CGT you'll have to pay when you sell? The extra SDLT when you purchase a property to live in?

Can you afford all of that as well?

Countrysider

socratez said:

Where are you looking to buy? Can you move to a cheaper area?

The OP says houses in their area are around £160K and flats are less than this.

That seems very cheap already and I doubt there are that many areas of the country where they'd be much cheaper.  

MaryNB

sim2335 said:

Last paid off pay day loan October 2020.
wont take out any more loans, thought they were like normal loans just high intrest .

Yes buy to let yes I can afford it, I would just pay it like I pay normal mortgate.
If it’s a flat it’s only about 100k so I could afford 25%

where can I go to make sure I don’t make a mistake for leasehold.

Taking out payday loans makes it look like you were struggling financially and desperate for credit. Not a good look as far as lenders are concerned.

Are you aware of the responsibilities that come with being a landlord in the country where you live? In England for example you need to be familiar with the Tenant Fees Act 2019, notice types (S21, S8), GSC (if there is a gas supply), EICR, EPC, right to rent booklet, deposit protection schemes, etc etc.
If you get something wrong you will find it very difficult to get your property back if the tenants are unwilling to leave.

I presume you are living at home if you can still afford the mortgage if the tenants stop paying. Can you still afford repairs if they stop paying? Do you have reliable tradespeople that you can call for emergency repairs? Will you be using an agency?

The money saving expert website has a lot of information on leaseholds.
You need to watch out for leases that are 80 years or less, ground rent that is more than £250, ground rent that doubles frequently, excessive service charges, rules in the lease that could prevent you letting the property, etc. 

housebuyer143

Slithery said:

sim2335 said:

Yes buy to let yes I can afford it, I would just pay it like I pay normal mortgate.
If it’s a flat it’s only about 100k so I could afford 25%

But can you afford to pay the mortgage for years with no rental income if the tenant decides that they're not going to pay?

What about losing your FTB privileges? The income tax on the rent? The CGT you'll have to pay when you sell? The extra SDLT when you purchase a property to live in?

Can you afford all of that as well?

As this poster makes clear, it's not really great to buy your first home at a BTL. You get badly stung with stamp duty to the point you likely won't be able to afford to move unless you sell it first and then you have lost your FTB stamp duty discount. 

Not for where you live now but can you afford rent and the mortgage if the tenants don't pay plus the repair costs, insurance etc. It's not easy money and comes with risk. 

Getting_greyer

Countrysider said:

socratez said:

Where are you looking to buy? Can you move to a cheaper area?

The OP says houses in their area are around £160K and flats are less than this.

That seems very cheap already and I doubt there are that many areas of the country where they'd be much cheaper.  

I just did a RM search: within 40 miles of x <140k, min 2 bed house, no auction, buying schemes or retirement homes = (Inc SSTC)

Nottingham: 6851
Manchester: 15702
Newcastle: 6663
Birmingham: 2828
London: 54 (tbf most of these are like chalets, single rooms or boats so wouldn't count)
Cambridge:163
Lancaster: 7426
Leeds: 9515

Some of these will have properties that have evaded the search parameters but seems plenty of options as long as they're not in or tied to the south east which is where they will struggle.

sim2335

Thanks

Looking in East Midlands, city, 

I only drive locally, so don’t want to move too far.

So I think buy to let is out of the question.

I live with Parents  at the moment and save about 940 a month.

Also I think flats are out of question as their leasehold and I don’t want to make any mistakes, as I don’t know what I’m doing.

I looked on Zoopla and right move before.

However through google i have now found some proprierts for 135k, what’s best website with most properties.

How do you do RM search