I want to start saving for mortgage / buy first house... where do I start

catlady1990

Hello,

So I have read through the initial post house buying post. I have a vague idea of the areas I would like to live / ideas of current house prices. I just want to make a plan so my partner and I can look at buying in the next five years (or as soon as we can save the money)

I have a lifetime isa with £1700 so far. 
I have £1022 in emergency fund. 
I am paying off debt but that is on track to go within next two years as it is one loan.

I just want advice on:
a) how much deposit should be saved as each person varies so much

b) is 6 months emergency fund required or would 3 months be enough ( we have a joint account and two individual accounts so figured needed emergency funds for each)

c) I put a ball park of saving £15000 on top for extras in case the boiler breaks or else dire. Is this a good amount?

d) I also thought £15000 for all the fees and furnishing it as I currently live in a furnished flat.

Is there anything else I need to save for?
I have read through various guides and travelled the Internet but struggling to know where to start. Also I am conscious that the house market keeps going up so worried we will never get the funds to buy but I don't want to rent forever. 

Thanks in advance for any advice given

pinkshoes

Sounds like a sensible plan so far.

Furnishings can cost next to nothing - lots of people think they HAVE to buy everything new once they purchase a property, but there are so many free or cheap sofas/beds/wardrobes etc... on Facebook. Much better to put the money towards the deposit.

Will you need a removal van?

3 months vs 6 months emergency funding depends on your jobs. Would 3 months be long enough to get another job?

You should be looking at least a 10% deposit.

What sort of property are you living in now? Could you downsize and rent somewhere cheaper to save more money?

catlady1990

Thank you for replying so quickly 😀

We are more than happy with second hand furnishings, we are just conscious that we will need to buy white goods (second hand is perfect to start with).

We will probably need a van, unless I can ask my brothers, as they own two vans. It may work out simpler just to borrow a van for a day or two. So I need to add that cost on.

I'm hoping that I will be able to locum for a few months or work for an agency, as they always need people in my career. My partner is happy to find any old job, so should have some money coming in fairly quickly. But I guess that answers the question, as 6 months will give more breathing space. 

I currently live in a flat which I rent through work. So we have very cheap rent / bills. 

ironlady2022

I rem when i saved up, I reduced all my expenses wherever I could, and saved the rest. Min saving was £500pm and any extra before my pay day, I would transfer across so I would start from £0 on my next pay day. 

HampshireH

mayling03 said:

I rem when i saved up, I reduced all my expenses wherever I could, and saved the rest. Min saving was £500pm and any extra before my pay day, I would transfer across so I would start from £0 on my next pay day. 

Same, I used to save £500 on payday in help to buy and a save (split) and then whatever was left at the end of the month I swept out and into savings. Day 1 payday was always only what I got paid.

These days post purchase I did exactly the same but less as outgoings are higher to pay for doing the place up bit by bit

catlady1990

OK that sounds like a good tip. So my plan is start with emergency funds savings. We have three for myself, my partner and the joint account ( I have estimated what our costs will be when we finally buy,so the joint account can cover 6 months including mortgage, insurance, bills and our normal amounts)

I will empty our joint account at the end of every month into emergency fund, then house savings. 
The way I do my personal budget every penny is accounted for. Once my debt is paid, I will save £500 a month split between LISA and emergency fund. 

asajj

Good luck on your journey and well done on starting planning. I was in a similar position about 4 years ago and now in the process of buying my own house so happy to share my experience a bit.

I separated from my husband a few years ago and since then paying rent all by myself and it is really expensive to do that. I also had some credit card debts need paying and had no chance to move out to a cheaper place due to various reasons.
I'm not going to lecture you about how I swapped my ice caramel latte for a homemade brew and saved it because this isn't what happened.

Firstly, during the lockdown, my job wasn't impacted and I was working full time and able to save more than before. I was made redundant last October and received a decent package and found another job in 2 months so kept most of it. I also got a pay rise with the new job so all of these combined, I was able to put an offer with a 10% deposit. Fingers crossed it will work out and I will finally own my first home after working so hard for years..

I started to use an app called Chip and it helped me save big numbers without really realizing it, so I suggest at least taking a look.

I have started selling unwanted items at home whether on eBay, Vinted, or FB marketplace, and put the money from it into a separate bank account.

I'd suggest finding a mortgage broker that doesn't charge you - some do and some don't. Lawyers are quoting around £1500 including requesting LISA funds but this is in the Northwest / Cheshire area so it may change.

I'd also suggest one-month extra rent for your current place in case you just want to keep it during the move - it will make life easier.

As I understand, you also both can have a LISA and use the bonus from it if you are both first-time buyers but I'm not sure.

catlady1990

Oh wow that is an amazing!
Fingers crossed it all works out for you!

Yeah I want a plan as I had no idea where to start. 
My bf is going to set up a LISA soon as we checked and you both can have one because neither of us have bought before.

I'm really hoping 5 years will give us the time to save for everything. It's just such a scary amount of money needed and I don't want to be in the position some other people I know are... stuck with a mortgage they can barely pay and no funds to deal with important extras such as: sorting out electrics or damp proofing.

I would rather wait a bit longer and be comfortable. I am aware that I need a stable home before considering children so need to get saving as I'm much closer to 40 than I would like to be. 

I used chip previously and that is how I cleared some debt. I currently find it easier just to set up a direct debit at beginning of month to put in as high as possible interest account that I could find. 
So I put £150 per month into natwest Internet saver at 3% interest
£50 per month into moneybox reward saver at 1.2% interest
Any extra money is currently clearing debt apart from £4.5 per month into emergency fund
Oh and a token £24 per month goes into my LISA just to keep getting a little bit of bonus each month. 
I also save through the work share scheme and I am undecided what to do at the end of the year, as I can keep it in shares or draw out what I have saved, but it won't have gained any interest. 

MovingForwards

I spent under £750 furnishing and buying curtains for a 2 bed property I rented. I picked from whatever BHF had (including a brand new bed / mattress) and curtains on sale in argos; later on I got a brand new upright freezer from Argos for about £200.

Everything moved with me when I purchased my flat, after a few weeks I purchased a fridge for under £120. The flat had a fitted oven / hob and left me the washing machine. Nearly 2 years later I'm still using both of them.

My emergency fund (leftover money after buying) was under £700, I used about £300 on tree surgeons and have built my savings up quite quickly.

In a perfect world you would have 6m EF and thousands spare. In the real world you make do, save and buy / replace things over several years.

catlady1990

I'm just very very conscious that friends and relatives of mine have bought a house and then Murphy has moved in next door. So they have had to spend literally £1000's which they hadn't budgeted for and gone into debt because of it. 
I am also very aware that we have lived in furnished properties for years and so I need to buy / obtain everything. So even getting things free or second hand isn't going to be cheap. Maybe I am over conscious and just need to get on save the deposit and see where we are at. My boyfriend thinks it's unobtainable with the amount I think we need and maybe he is right but I don't want to struggle at any point during the moving / buying process. 

I have started reading your house buying diary MovingForwards and I think it's amazing what you have achieved on your own.

K_S

@catlady1990 a) As per current market conditions, with regard to the mortgage, the minimum deposit you will need is 5% of the purchase price.